In India, two-wheelers are a popular choice for commuters. Bikes are cheaper when compared to cars and are easier to move through traffic. Almost all banks and Non-Banking Financial Companies (NBFCs) offer two-wheeler loans at attractive interest rates.
The process to apply for a two-wheeler loan is simple and most lenders provide the option to apply for a loan online. However, it is important to have a good credit score to avail a two-wheeler loan at an attractive interest rate. In case your CIBIL score is low, the two-wheeler loan application may be rejected or the loan will be provided at high interest rates.
Reasons why your Credit Score may be Low
Some of the main reasons why your credit score may be low are mentioned below:
- Several Credit Applications: In case you apply for several loans or credit cards to several lenders and they get rejected, it could lead to a drop in your CIBIL score.
- Missing Payments: Your credit score will fall if you do not pay any bills by the due date.
- Credit Card Payments: It is important that the entire credit card bill is paid within the due date. Any outstanding amount will be noted as overdue. Your CIBIL score will fall if the overdue amount increases.
- Payment Delays: Failure to pay your credit card or loan Equated Monthly Instalments (EMIs) regularly will impact your CIBIL score negatively.
You will also need to meet the eligibility criteria to apply for a two-wheeler loan.
Ways to get a Two-Wheeler Loan with a Low CIBIL Score
The different ways by which you can get a two-wheeler loan in case your CIBIL score is low are mentioned below:
- Co-Signer: A co-signer or guarantor is an individual who can help you get a bike loan in case your credit score is bad. However, the CIBIL score of the co-signer must be good and he/she will be equally responsible for the loan.
- Compare: It is important that you compare various two-wheeler loan lenders before opting for a loan. Certain lenders may provide a loan even if your CIBIL score is low. However, the interest rates on these loans may be high. Comparing lenders will also ensure that you get a two-wheeler loan with better terms and conditions.
- Negotiate the Terms: It is vital that you negotiate the terms of the loan in case you have missed payments earlier. Negotiating the lending terms may help you in the long run.
- Higher Down Payment: In case your CIBIL score is bad, you may have to make a higher down payment. Banks may offer up to 90% of the price of the bike as a loan and the remaining must be paid as a down payment. In case your credit score is bad, lenders may provide a loan in case you make a higher down payment.
There are several ways by which you can get a two-wheeler loan even if the CIBIL score is low. However, it is important that you maintain a good credit score as it can help in getting a bike loan with low interest rates and better terms and conditions.
- How to Check CIBIL Score?
The procedure to check the CIBIL score is mentioned below:
- Visit https://www.cibil.com/freecibilscore.
- Click on ‘Get Your Free CIBIL Score’.
- On the next page, you will need to create an account. You will need to enter the email address, create a password, first name, last name, choose the type of ID, ID number, date of birth, pin code, and mobile number.
- Click on ‘Accept & Continue’.
- An OTP will be sent to the mobile number that has been entered. Enter the OTP and click on ‘Continue’.
- On the next page, click on ‘Go To Dashboard’.
- On the next page, click on ‘Member Login’ to check the CIBIL score.