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Are you eligible for a loan for two-wheeler?

You may have selected your favourite bike model and decided to apply for a loan. It would be easy for you to pay in instalments if you do not have sufficient funds for full payment. Besides, you have to carry on your regular expenses and may not want an additional financial stress. One thing that you should check on is your eligibility for the loan for two wheeler. Lenders go through several things like your repayment capacity, background, source of income, etc. as they want to avoid risk of non-repayment. Read on to know about the documents required and what factors make you eligible for the loan.

The eligibility criteria and list of documents for a bike loan will vary between different lenders. However, there are certain standard requirements that you should fulfil as mentioned in the following:

· Age

You should be at least 18 years or maximum 65 years old during the time of application of the loan. The upper age limit may vary among different lenders.

· Address of residence

You have to reside at a specific address for at least a year from where you are applying for the loan for two-wheeler. Lenders require this as proof of residential stability.

· Income

Whether you are a salaried or a self-employed individual, you need to have a stable income. For salaried applicants, you need to have a stable job for at least one year prior to the date when you are applying. If you are self-employed, you have to show the IT returns for a minimum number of years.  A higher income may ensure a lower interest rate.

· Your CIBIL Score

The lenders may check your CIBIL Score. CIBIL score is issued by the Credit Information Bureau of India Limited. The score can vary within a certain range. The bureau calculates it after reviewing your credit history, that includes your credit card payments, repayment of an earlier loan, any outstanding amount, etc. Higher the score, greater will be your eligibility for a bike loan at a low-interest rate. A low CIBIL score will increase the rate of interest on the loan.

  • Contact number and KYC documents

You should have a permanent contact number and documents related to KYC, ID proof and address proof. Generally, you need to show the PAN number, Aadhar card number, etc

· Any outstanding loan

If you already have an outstanding loan to your name, it would affect your eligibility to get a new loan. Some lenders may not issue you a loan if they find out that you have ongoing loans.

You can improve your eligibility for a two-wheeler loan through the following methods:

  • Maintain a high credit score

When you are applying for a bike loan, try to maintain a high credit score. This would also decrease the loan interest.

  • Longer loan tenure

A longer loan duration means that you will have more time to repay back the loan through EMI (Equated Monthly Instalments). Some lenders may consider you more eligible if you choose a longer loan tenure.

  • Joint loan

You can apply for a joint loan with a co-applicant with a good credit score. This will increase your eligibility for your bike loan.

  • Additional source of income

If you can show additional sources of income beside your primary income, it means that you can repay the loan amount without any defaults. This would further improve your eligibility.

A bike finance EMI calculator is an online tool that will calculate the monthly repayment amount after you take a loan. You have to put in details like the amount of loan that you would like to apply for, the repayment period, etc. There would be certain charges like processing fees, etc. The calculator is a useful tool as you can access it anytime and from any location and avoid manual calculations. It would be available on the lender’s website and is free to use.

Once you decide on the loan amount, keep both original and photocopies of the documents ready for submission to the lender. There are certain standard requirements for documents. If you are a salaried individual, submit the following documents for bike loan:

  • KYC documents like Passport, Pan Card, Aadhaar Card, etc
  • Address proof consisting of Passport/Driving License/Voter ID card /Utility Bill / Aadhaar card/ Bank account or Post Office savings bank account statement.
  • You can submit computerized documents issued by PSU, Pvt Sector, Property or Municipal Tax receipt
  • Address proof in the name of your spouse or parents is accepted by lenders
  • Passport size photographs

· PAN card

· Salary slips of last three months

· Salary statement for last six months

· Proof of verified signature

· Bike registration certificate

· Latest form 16

If you are self-employed, submit the following:

  • KYC documents like Passport, Pan Card, Aadhaar Card, etc
  • Address proof consisting of Passport/Driving License/Voter ID card /Utility Bill / Aadhaar card/ Bank account or Post Office savings bank account statement.
  • You can submit computerized documents issued by PSU, Pvt Sector, Property or Municipal Tax receipt
  • Address proof in the name of your spouse or parents is accepted by lenders
  • Passport size photographs

· PAN card

· Last two year’s income tax return as income proof

· Income statement for last six months

· Proof of verified signature

· Bike registration certificate

· TDS certificate and company details

Check your eligibility for a loan for two-wheeler before you apply in terms of both criteria and documents required. Also, get an idea of the EMI amount that you have to pay every month prior to loan application with the help of an online EMI calculator. Based on the lender’s requirements, arrange for the documents that you have to submit, for a faster loan approval process.

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