Looking for a bike loan? Here’s everything you need to know about eligibility

The introduction of loaner bikes in India makes it easier for middle and lower middle classes to ride their dream bike. However, before applying for this loan, you must choose the right lender. But what does it mean to be the perfect lender? He is the one who has no rigor bike loan eligibility. Read the entire article to fully understand the eligibility criteria for the bike loan.

Applicant’s age:

Most individuals offer bicycle loans to people over the age of 18. Age is an important factor in any type of loan. People under the age of 18 or who have reached retirement age are believed to have little or no earning potential. And, due to credit risk, each lending institution has a minimum and maximum age requirement for bike loan eligibility. However, if you meet the minimum age required by the lending institution but do not have sufficient earning potential, consider including a co-applicant on your bike loan application form. Always remember that the co-applicant’s reimbursement responsibility is similar to yours.


To get a bike loan in india, you must pay a certain amount as a deposit. Usually, financial institutions will give you a bike loan with a maximum LTV of 95% of the price of the road bike. A higher loan value implies a higher credit risk. Therefore, by decreasing the loan amount and increasing the down payment, you can get instant loan approval. On top of that, you should always remember that the higher down payment also secures the lower interest rate on your bike loan. However, don’t look for another loan or ask a friend or relative for financial help to increase the amount of the down payment.

Source of income

To ensure whether or not you meet the lender’s minimum bike loan eligibility criteria, the income factor plays a crucial role. Employees are always preferred to the self-employed. This is because salaried employees receive a consistent and predictable monthly paycheck. Self-employed people, on the other hand, can experience significant fluctuations in their monthly income. However, when it comes to minimum income requirements, employees and self-employed benefit here. Even if your monthly income is low, the lending institution will not refuse you a loan. Indeed, as part of a bike loan, the bike you buy is mortgaged to the lending institution, which reduces the risk of default.

credit history

When you visit the lender’s website to check their minimum bike loan eligibility, you won’t find any details related to credit score and history. However, this does not exclude the possibility that this aspect is taken into account throughout the credit assessment process. The lender assesses your existing debt status, reviews your bank account statement to review your EMI payment pattern, etc. Your credit history or score becomes less important if you are a first-time borrower and have never incurred debt before. In such situations, your income becomes the most important criteria for determining your eligibility for a bike loan.

Place of residence

The location of your residence has little or no bearing on your eligibility for a bicycle loan. However, it affects your income and a few other aspects. If you reside in a metropolitan city, the minimum income requirement may be slightly higher than for people who live in rural areas due to your lifestyle. So, when applying for a bike loan in India, keep this factor in mind as it will give you an estimate of the minimum income you will need to acquire this loan.

Number of debts

The number of existing debts is also taken into consideration when it comes to eligibility for the bike loan. The higher the number of debts, the less likely you are to be approved for the loan. To assess the impact of existing debts on paying off your two-wheeled loan, they calculate your debt-to-income ratio.

The debt/income percentage formula:

Percentage of debt to income: (Monthly debts ÷ Gross monthly income) × 100

Bike model and variant

The bike model and variant also impact your eligibility for the bike loan. Eligibility criteria and interest rate for high-end scooters, motorcycles and sports bikes vary from each other. In addition, the financing organization takes into account the resale value of the bike. Bikes with a higher resale value reduce credit risk and allow lenders to recover their losses by selling the bike at auction if the borrower defaults.

The concept of resale value applies to new and old bicycles.

Relationship with the lender

The chances of you easily meeting the lender’s bike loan eligibility criteria also depend on your relationship with the lender. If you are an existing customer of a lender or have taken out a loan from them in the past and repaid it on time, your chances of loan approval are high.


Now that you know all the key factors that influence bike loan eligibility, review the same before applying for a bike loan in India.

(To receive our daily E-paper on WhatsApp, please Click here. We allow the PDF of the document to be shared on WhatsApp and other social media platforms.)

Posted: Wednesday, February 23, 2022, 2:35 PM IST

Comments are closed.