Factors affecting your two-wheeler loan eligibility

If you wish to buy your first personal vehicle, a two-wheeler is a good place to start. Economic, small in size and fuel efficient, this vehicle can be parked in the smallest of spaces and allows you to navigate through traffic even during rush hours. You can easily become a two-wheeler owner by taking out a loan. But before you apply for the loan, you need to check whether you are eligible for it and the factors that affect your loan eligibility. Here are the general factors affecting your two-wheeler loan eligibility.

Your age: Most lender generally offer two-wheeler loans to borrowers above the age of 21 years, whereas a few also provide loans to borrowers above 18 years of age, if they can fit into the remaining loan eligibility criteria as determined by the lender. The maximum age for you to be eligible for the loan is 58-65 years, depending on whether you are a salaried individual or a self-employed professional. Typically, lenders prefer you to repay the loan before retirement.

Your employment status: Lenders determine the bike loan eligibility criteria based on the borrower’s employment status. You could be a self-employed professional, a salaried individual or a business owner to be eligible for this loan. While most lenders offer loans for two-wheelers with minimal documentation, it is better to have your proof of employment documents handy, before you apply for the loan.

Your employment stability: Lenders prefer their borrowers to be stably employed. You need to be employed for a period of a minimum period of 1 – 2 consecutive years to be eligible for the bike loan. Stability in employment shows the lender that you will be able to repay the loan without defaulting. Note that the lenders typically reject loan applications of borrowers who change jobs habitually or if they are between jobs for longer durations.

Your annual income: Each lender runs a different two-wheeler loan eligibility check when it comes to the income of the borrower. For instance, a few lenders sanction this loan even if your annual income is as low as ₹40,000 whereas several prominent banks ask you to show minimum annual income of ₹72,000 to ₹84,000 or more. You should be able to present your income proof documents in the form of salary slips, audit statements from a chartered accountant and filed IT returns documents, if required.

The company you are employed with: To check eligibility for two wheeler loan, lenders also consider the company or organisation you are employed with. If you are employed with a reputed and stable company, your chances of getting your loan for two-wheeler passed are much higher, than if you are employed with a relatively new or unknown company. Being employed with a stable company assures the lender of the fact that you would be drawing a regular income.

Your current debt situation: Before lenders grant your 2 wheeler loan application, they also examine your current debt situation. They check if you are repaying any other loan(s) and the EMIs paid against those loans. This helps them understand if you have the ability to take on and repay a new loan. If you have any existing loans, and more than 60% of your income is being spent on repaying those loans, there is a good chance that your loan for two-wheeler may be rejected.

Borrowers can now utilise the two-wheeler loan apply online facility. But to ensure there are no hurdles or hassles, you must first check if you are eligible for the loan. You can use a two-wheeler loan eligibility calculator to check your eligibility.