Two Wheeler Loan Eligibility

• Age of the Applicant

Unless you are above 21 years you would not be able to apply for a loan in your name. Also, you should be below 65 years of age at the completion of your loan term. Therefore, your age is one of the major factors that can affect your two wheeler loan eligibility.

• Income of the Applicant

In order to qualify for a two wheeler loan, the financial institution will see your income as a criterion to gauge whether you would be able to pay off the loan amount or not. In most cases, the minimum income required is as low as Rs. 10,000.

• Credit Score of the Applicant

Your Credit Score is one of the most important two wheeler loan eligibility criteria. When you have a credit score of 750 or more, you are in a stronger position to get a loan, as the score puts you in good standing. It shows that you have been paying your debts on time without defaulting on the payment. On the other hand, with a poor score, your application may be outrightly rejected.

• Applicant’s Work Experience

Most lender firms expect you to have at least 6 months of work experience with your existing employer before considering you as an ideal prospect for a loan.

• Current Debt Situation of the Applicant

Your existing debt can also influence your eligibility for a two wheeler. Having too many loans in your name can pose a problem for a lender. Giving you a loan may be a risky proposition for the lender.

• Downpayment

You automatically decrease the loan amount when you make a high down payment. This makes you a suitable candidate for a loan.

Getting a two wheeler loan was never so easy. There are numerous options that you have today. Online applications, easy EMI options, flexible tenures etc., are features that make owning a bike an attainable dream. Research well in order to make a well-informed decision.

• Improve your credit score: One of the most important criteria that lenders pay close attention to is your credit score. By paying your EMIs and dues on time and not missing any payments, you can significantly improve your credit score. Having a good credit profile gives lenders greater confidence regarding your ability to repay the loan amount.

• Have a stable job: By reassuring the lender that you have a stable job with a stable source of income, you can bolster your chances of getting a two-wheeler loan. This shows the lending entity that you are a responsible borrower.

• Maintain a low debt-to-income ratio: The debt-to-income (DTI) ratio allows the lending institution to gauge your debt repayment capacity in relation to your monthly income. That is, the DTI ratio computes the portion of your monthly income that can be paid towards repaying an existing debt. The lower your DTI ratio, the better your chances are to avail of a two-wheeler loan. It is wise to keep the DTI ratio below 40%.

• Make a down payment: Lenders offer up to 100% funding of the on-road price of the vehicle. However, by making a down payment, you can show the lender that you are capable of making EMI payments on time. Thus, you can opt for a loan amount that covers 60-70% of the vehicle’s on-road price.

Apply with a co-applicant: Another excellent way to improve your chances is by applying for a loan with a co-applicant. As both the applicants’ income sources are taken into consideration, it can significantly improve your chances of getting the two-wheeler loan.