Obtaining a Two-Wheeler Loan even with a low CIBIL score

Are you eager to buy your dream bike but are falling short of funds? Worry not, a Two-Wheeler Loan is one of the most common modes of financing this purchase.

However, often, CIBIL becomes a hurdle in financing the required amount. If you are facing difficulties in getting a Two-Wheeler Loan because of a low CIBIL score, then you are at the right place. Let’s check the importance of a CIBIL score for a Bike Loan and how you can get a Two-Wheeler Loan even with a low CIBIL score in India.

CIBIL score for a Two-Wheeler Loan

The CIBIL score is a 3-digit numeric score between 300 and 900 that represents your creditworthiness and repayment history. It takes into account your past repayment and credit performance. Repaying your loans on time and displaying responsible credit behaviour enhances your credit score, and vice-versa. The higher the CIBIL score, the higher the chances of loan approval.

Reasons for a low credit score

Skipping your EMIs frequently
Too much reliance on unsecured loans
Maxing out your Credit Card limits
Skipping your Credit Card payments or converting them to EMIs
Frequent hard inquiries for financing facilities

Impact of low CIBIL score on Two-Wheeler Loan

Higher interest rate: You might have to avail of Two-Wheeler Loans at a higher interest rate than usual.
Lower loan amount: You might not get your desired amount financed and have to shelve more from your pocket to buy your two-wheeler.
Rejection of application: Your Two-Wheeler Loan application might get rejected.
Requirement of a co-applicant or guarantor: You might have to include a co-applicant or a guarantor in your Two-Wheeler Loan application.

Improving your CIBIL score for a Two-Wheeler Loan

Timely payment of bills: You should always try to pay your Credit Card bills on time and in full (not only the minimum amount due).
Maintain your old credit accounts in good standing: Your old credit accounts should have a good standing and should not display a status like wilful defaulter or settlement.
Repay EMIs timely: You should repay all your EMIs by the due date.
Limit credit utilisation: You should limit your credit utilisation, especially for unsecured loans. A higher credit utilisation ratio depicts high reliance on credit.
Don't make hard inquiries: You should not keep enquiring about loan applications continuously; this has a negative impact on your credit score.
Take on a credit builder loan: You can avail of a credit builder loan that allows you to repair your credit score.
Check credit report for errors: Regularly check your credit reports for errors and promptly report to the credit bureau if you find one.

Ways to get a Two-Wheeler Loan with a bad CIBIL score

Still wondering – “Can I get bike finance with bad credit?” Here’s how you can avail of a Two-Wheeler Loan with a low CIBIL score:

Bring in a co-signer or co-applicant to fulfil the eligibility criteria
Negotiate the terms with the lender to bring out a probable solution
Compare different lenders to find the one with simple eligibility and favourable terms
Make a higher downpayment to reduce your credit burden

Choosing the right lender

If you wish to avail of a Two-Wheeler Loan with a low CIBIL score, then you can select Axis Bank's offerings. You can apply for a Bike Loan with a low CIBIL score if it is between 600 and 750. In case you are eligible, you can avail of 100% on-road funding with minimal documentation. With flexible tenures and affordable interest rates, Axis Bank has been the borrower’s choice to fund their two-wheelers. Apply now!

Also Read: What should be my credit score to avail loans?

Frequently Asked Questions

Q: Who is eligible for bike finance?

A: Borrowers with a steady income source, aged between 21 and 60 years, and having good credit scores are eligible for bike finance.

Q: What is the minimum credit score to buy a bike?

A: A credit score between 600 and 750 is considered good for buying a bike.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.