Sales of two wheelers (scooters, motorcycles and mopeds) in India has been rising since last 5 years. Here’s the data from Society of Indian Automobile Manufacturers (SIAM) showing the domestic sales trend of two wheeler:
Despite this meteoric rise in demand for 2 wheelers, many people still cannot afford to buy their own vehicle. Because, for such individuals the cost is a concern. And for such individuals who cannot buy because of money, two wheeler loan is the solution.
There are multiple eligibility criteria before a two wheeler loan application is approved. And the most important being the income. It is the only factor through which lenders evaluate whether the applicant has repayment capacity. Although lenders also consider CIBIL score to judge credit worthiness of the applicant. Income is the very first thing checked.
Read about 2 wheeler loan for students.
Listed below is the minimum monthly income required by two wheeler loan providers in India:
Since two wheelers are not very expensive (assuming you are not buying a very high end bike). The income eligibility criteria is not very high compared to car, home and personal loan.
|Name of the bank||Minimum Monthly Income Required|
|HDFC Bank||Rs. 7, 000 - Rs. 8, 000|
|Tata Capital||Income not mandatory|
|Mahindra Finance||No income proof required|
|IndusInd Bank||Rs. 10, 000|
|State Bank of India||Rs. 5, 000 - Rs. 6, 500|
|Tamilnad Mercantile Bank||Rs. 6, 250|
|Hero Fincorp||No income proof required|
|United Bank of India||Rs. 15, 000|
|Muthoot Capital||Rs. 8, 000 (salaried) - Rs. 10, 000 (self employed)|
|Central Bank of India||Rs. 10, 000|
|Karnataka Bank||Rs. 4, 000 - Rs. 5, 500|
|Punjab National Bank||Rs. 10, 000|
|Bank of Maharashtra||Rs. 25, 000|
|Dena Bank||Rs. 8, 250|
|Oriental Bank of Commerce||Rs. 10, 000|
|Allahabad Bank||Rs. 15, 000|
|Indian Overseas Bank||Rs. 5, 000|
|Syndicate Bank||Rs. 4, 500|
There are many other prominent lenders (listed below) offering loan for bikes, but their income requirement is not available.:
- ICICI Bank
- Canara Bank
- Bank of Baroda
- Bajaj Finserv
- IndusInd Bank
- Fullerton India
- Bajaj Finance
- L&T Finance & others
There are some lenders who do not ask for any income or income proof. However these lenders ask for guarantors, employment/business and residential stability, bank statement.
Other features in 2 wheeler loan:
Loan amount: Not all banks offer 100% finance for the two wheeler. Typically 85% – 95% of the invoice price of the vehicle is provided.
Pre-closure: Since the loan amount is small, it is recommended to close the loan as early as possible before the standard tenure. Although financiers will charge a small fee for pre-closure, it is worth doing it. This has two important benefits – credit score will be positive and money is saved as burden of EMI reduces.
Start building credit score: If you are taking loan for the first time for 2 wheeler, then it is an excellent opportunity to start building your credit score. Since loan amount is small, regularly paying-off EMI will put you in good book of lender and credit bureau. Apart from regular EMI payment before last date, you need to follow very simple rules to improve credit score –
- Never pay minimum balance and always pay in full
- Never show hunger for too much of credit. And do not apply for too many credit applications in a short span of time.
- Never do card settlement
- Stay away from balance transfer
- Do not spend over the credit limit