A two-wheeler is now the best vehicle for quickly and easily traveling on city roads in India. While massive traffic jams continue to be the bane of most roads in big cities, having a two-wheeler allows you to move quickly through the traffic. Buying a two-wheeler, however, can prove expensive, which is why 2-wheeler loans are now a popular instrument offered by lenders.
Two-wheeler Loan Eligibility Criteria
If you are looking to avail of a two-wheeler loan from any of the top lenders, it is important to know the two wheeler loan eligibility criteria. Knowing whether you are eligible for a two-wheeler loan is the first step to availing a loan from your preferred lender. Read below to learn about two-wheeler loan eligibility. While the eligibility criteria may differ across lenders, most lenders in India stick to the eligibility criteria described below.
Criteria for Salaried Applicants:
Age: Min. age of 21 years at the time of application and max. age of 65-70 years at the time of loan maturity.
Loan Amount: Up to 100% of the vehicle’s on-road price can be availed as a loan.
Work Experience: Applicants must have at least one year of work experience.
Criteria for Self-employed Applicants:
Age: Min. age of 21 years while applying for the loan and max. age of 65-70 years at the time of loan maturity.
Loan Amount: The two-wheeler loan can cover up to 100% of the vehicle’s on-road cost.
Work Experience: Applicants must have at least one year of financial record of business.
Factors that Affect Two-wheeler Loan Eligibility
Now that you know the basic eligibility criteria set by most lenders, it is important to understand the different factors that impact two-wheeler loan eligibility. We take a look at these factors below.
Age
Age is often one of the most important determinants of whether you will be able to avail of a loan. Lenders usually prefer younger borrowers as they have more time to repay their loan comfortably. However, most lenders offer loans to older applicants as long as they are under the age of 65 to 70 years at the time of the loan’s maturity.
Income
Income is another important determinant of whether you will be able to avail of a two wheeler loan of your choice. Along with determining whether you get the loan, your income will also determine the terms of your loan, such as the EMI you must pay and the repayment tenure. You will be offered a higher principal amount at a lower interest rate if you earn a high income.
Credit Score
Your credit score is important for determining your loan amount – whether it is a two-wheeler loan or a home loan, and the interest rate. Your credit score is derived by assessing your income, repayment history and other credit information, such as your income-to-debt ratio. It is often one of the first things checked by a lender when you approach them for a loan. Keeping your credit score high is essential before you venture into the market looking for capital.
Area of Residence
The city you live in will also play a part in determining your eligibility for a loan. For instance, residents of a metro city might be able to get approval for their two-wheeler loan significantly faster without facing many hassles.
Employer
The company you work for will also determine your creditworthiness for a two-wheeler loan. If you work for an established company, you will likely get better offers and more leeway while your loan conditions are being determined.
Work Experience and Stability
Your work experience and stability in holding a job are also scrutinized when you approach a lender for a 2-wheeler loan. Job stability is determined by assessing how long you have worked at a particular job and whether you are likely to give up your job or be unemployed during the course of the loan. A lack of job stability will likely dent your two-wheeler loan eligibility as the lender might be skeptical of you repaying your loan. While you can still avail of a two-wheeler loan, the lender will likely offer it at a higher interest rate.
Existing Debt
While this is covered briefly through your credit score, expect potential lenders to enquire specifically about any existing debt you may have. If your existing debt is high, your eligibility for a two-wheeler loan is likely to drop, as lenders might be concerned about your ability to repay all your loans. It is best to reduce your total debt before you approach a lender for a 2-wheeler loan.
Conclusion
Availing of a 2-wheeler loan can significantly help you as it makes your purchase much more affordable. Paying by EMI ensures you don’t have to make a significant dent in your savings to buy your preferred vehicle. However, choosing a two-wheeler loan that best meets your requirements is important.
Two-wheeler loans offered by Bajaj Markets offer several benefits, including an easy and convenient application process, attractive interest rates starting from around 8.75% per annum, and flexible repayment tenure of up to 3 years.
