Two Wheeler Loan Eligibility Criteria

The most common method of buying a two-wheeler in India is by taking a loan from the bank or a non-banking financial company. Approximately over 80% of the two-wheeler is financed.

There are two types of two-wheeler loan:

• Secured loan: in this type of loan, security, or collateral is required to get a loan. The security can be in the form of your land, home, or any valuable asset. Most lenders keep the bike itself as a security. This means that the lender will legally own your bike if you fail to repay your loan. Also, in this case, the interest rate is less as the lender has less money on risk.

• Unsecured loan: this is the opposite of a secured loan. This loan doesn't require any kind of security or collateral. These are personal loan which is used to buy a bike. The two wheeler loan interest rate is very high on this type of loan as risk increases on these kinds of loans. So, to cover these risks, the bank charges a high amount of interest rate.

To apply for a two-wheeler loan, you must cover a few eligibility criteria:

• AGE:  the age of a loaner must be 21-65.

• EMPLOYMENT: For obvious reasons as in to give the EMI, the loaner must be employed in registered organization or shall be self-employed in a registered organization.

• EMPLOYMENT TENURE: The loaner must have completed 6-12 months of tenure in their current organization to indicate their permanency in the organization and job security.

• INCOME: the loaner must have an income of average 15,000 Rs

• If you think to get a loan for an expensive bike, then you are required to have a self-owned house.

• Lone tenure must be a minimum of 6 months and can be a maximum of 60 months.

• Maximum loan amount to sanctioned can be up to 95% of the total amount of the vehicle.

Factors affecting your loan eligibility:

• Credit score: credit score is directly proportional to eligibility. The higher your credit score, the higher will be your loan eligibility. Axis Bank Two Wheeler Loan is most preferred as it gives leniency to customers in case of credit score

• Previous loans: large unpaid dues will have a huge effect on your loan eligibility. This is because of the non-payment of the loan, your credit score decreases, you are considered as a defaulter.

• Income: income is also directly proportional to eligibility. The higher the income, the higher are your chances of eligibility. Higher-income can also lower your two-wheeler loan interest rate as the lender gets a little bit of assurance that the borrower will repay the money.

AlAlso read:- Should I go for a short or long tenure for a car loan?