When it comes to buying a bike, the reasons may vary from one person to another, but the two wheeler loan eligibility criteria would remain the same. You might require a bike to reduce the travel time to college/work every day, while your friend might want one to observe social distance. Regardless of the reason, both of you would need to meet the two-wheeler loan eligibility in order to avail of this financial option.
A two wheeler loan is a feasible, convenient and financially suitable alternative to using up your savings to buy a bike of your choice. Adding to ease is the fact that currently many lenders offer this financial product at affordable rates, thus rendering it easily accessible. So, all you need to do is prepare a list of lenders and check the eligibility criteria specified by each to be able to apply. Being aware of the factors that impact the two wheeler loan eligibility also promotes understanding, and these are –
Age of the applicant – Anyone who applies for the two-wheeler loan should be at 21 years old. The only time lenders make an exception and grant a loan to an 18-year old is when there is co-applicant involved. In addition that person should be willing to take financial responsibility on behalf of the youngster. Lenders seek the age of the applicant to ensure that he/she is eligible to earn an income and repay the entire value in keeping with the schedule. Likewise, there is an upper limit too, wherein an applicant who is older than 65 years is not eligible to apply.
Applicant’s creditworthiness – It is the three-digit number, namely the credit score, which reflects the creditworthiness of the applicant. The higher the number, the more creditworthy is the applicant, and vice versa. On their part, lenders lay a lot of store by this two-wheeler loan eligibility criteria because it is indicative of the ability of the applicant to repay the loan.
To this effect, a high credit score implies that you have been regular about paying off your past loans and also do not have any pending payments that are past their due date. Therefore, in the eyes of the lender you emerge as a low-risk applicant who can be trusted with a two-wheeler loan.
Employment and income – Higher income increases your two-wheeler loan eligibility, and so does a stable employment status, for example a high-paying government job. From the lender’s perspective, your income should be sufficient to pay monthly instalments. Similarly, a stable employment means that you would remain working for several years going ahead, and hence continue to earn.
The purpose of this criterion is to minimize chances of defaulting on the EMI, which is all too possible if you lack monthly wages or lose employment.
Ability to repay – Before approving your two-wheeler loan application, lenders take stock of your ability to repay the amount. As the first step they check if your income level is commensurate with the loan value and the amount to be paid as monthly instalment. Next, they dig into your records to find out if there are any outstanding loan payments that are due from your end.
Ideally two wheeler loan eligibility requires that your current income should be sufficient to cover the EMI by a wide margin. Also, there should not be any previous loans which are still unpaid, as they would represent debt and hamper your chances of seeking a fresh loan.
Place of residence – Where you reside might impact your two-wheeler loan eligibility, as lenders show a marked preference for some locations as compared to others. For example, a residential address in a bustling city carries higher approval rate than one in a smaller town or village. Among cities, applicants living in metro cities are regarded as being more eligible than those who live in two-tier and three-tier cities.
Final thoughts
While these serve as the basic parameters for two wheeler loan eligibility, absence of standardized norms result in some variation. Therefore, some lenders may accept 18 years of age as being eligible, while others may insist on 21 years as the lower limit. Likewise, the upper limit also varies, wherein most lenders regard 65 years as the threshold, but some also consider 70 years as being eligible.
Factors like minimum income, work experience, and loan amount depend on the individual policy of the lenders, and hence are subject to variation. Whether you are self-employed or salaried also does not make any difference to your two wheeler loan eligibility. What truly matters is your credit score, which should be at par or above the number specified by the lender. Another factor that lenders take serious note of is the status of your debt vis-à-vis your income, and the former should be much lesser in comparison with the latter.
Many of the two wheeler loan eligibility criteria vary as per the discretion of the lender, which means you must inquire from each of them rather than assuming that the benchmarks would be same for all.
