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Things To Know That Can Affect Bike Loan Eligibility

The demand for two-wheelers has been on a rise every year. In the financial year 2018/19 alone, nearly 21.18 million units of two-wheelers were sold. This explains why India ranks 6th in the world when it comes to the highest motorbike usage. The reason why the two-wheelers are popular in India is that it is easy to beat the traffic, are budget-friendly, and are perfectly suitable for Indian conditions.

Buying a Two-Wheeler in India
Owning a two-wheeler loan in India is a fairly common thing. It is estimated that nearly 47% of Indian households own at least a bike or a scooter. The process of buying a two-wheeler has also become a fairly simple process along with its registration process. Also, due to the rise in ease of access to bike loans, many individuals have begun to buy bikes under loan as the eligibility factors for bike loans have become simpler and hassle-free over the years.

Factors Affecting Bike Loan

Banks and Financial Firms offering loans look up to some factors that form the basis on which the two-wheelers loan and EMI calculations are approved. Some of the main factors are :

Age
The age of the applicant is necessary to deduce the repayment ability of an individual. Age plays a crucial part in loan approvals as this shows an individual’s working capacity and repayment ability.

Income
An individual’s income and the income source is critical since this is the basis on which one has to repay the loan. The banks and firms look for applicants who can prove a stable source of income so that they can repay their loans easily.

Job Stability
Lenders make sure that you have had ample work experience and a stable source of income. This is an important factor from the lender’s perspective as it lowers the risk and increases loan approval chances for you.

Previous Loan History
Having a good and clear loan history and credit history will make it easier to get loans approved. Taking a loan from a previous lender can even get you a marginal decrement in the interest rate while calculating the two-wheeler loan’s EMI.

Eligibility for Bike Loan
For an individual to apply for a bike loan, some bike loan eligibility criteria are to be met. These are fairly simple criteria but we shall talk about them regardless.

Age Limits
The minimum age limit to apply for a loan is 21 years whereas the maximum age limit stands at 65 years.

Status of Employment
Applicants must be salaried or self-employed having a stable source of income.

Minimum Income
To be eligible for a bike loan, lenders make sure that you have a minimum income of at least around INR 50,000 per year. This requirement may change from lender to lender.

Work Experience
A brief history of your work experience along with a minimum work experience of 6 months under the current employer is required to be eligible for a bike loan.

Loan Amount
Although the average loan amount for two wheelers varies around the INR 1,50,000 mark, an applicant can request for a maximum loan of INR 10 Lakh. Some of the lenders agree upon a lesser or higher amount depending on their policies.

Finding Good Loan Options
The usual bike loan lenders give out an interest rate of between the 10.00% to 13.00% mark. It is a good idea to choose lenders who can offer flexible repayment schemes apart from attractive interest rates.

Important Documents Required for Loan Approval
The requirement of certain documents and the number of copies may vary from lender to lender. Though, some of the mandatory documents required are listed below.

  • Loan Application with credible information
  • Proof of Identity documents such as Aadhar card, PAN card, Passport, etc.
  • Proof of Address documents such as Passport, Aadhar, Utility bills, etc.
  • Proof of Income documents which may include salary slips, Income tax return filings, bank statements, etc.
  • Photographs and Attested copies of the above documents.

These have been some of the factors and eligibility criteria upon which loans are decided. Make sure to check your eligibility so that you can own your bike soon.

jesso
I'm professional content writer and blogger
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