The CIBIL score is a three-digit numeric summary of your credit history. This score ranges between 300-900. The higher the number, the better are your chances of getting a two-wheeler loan. The different banks have different criteria and eligibility conditions for dispersing a bike loan. There is no set fixed score decided by the lenders to approve bike loans, but it is generally assumed that all financial institutions accept a score of 600 plus or 750 upwards.
Impact of low CIBIL score on Two-Wheeler loan
As mentioned above also that the CIBIL may be considered as of the reasons that your two-wheeler loan gets rejected from the end of the lender. Mentioned below are a few reasons that the score goes down.
Frequent loan rejections- If in past also your two-wheeler loan is rejected, and immediately you applied for a new two-wheeler loan from a different lender. When you apply for credit to multiple banks at the same time, it increases the chances of a hard inquiry. Each negative inquiry can downgrade your CIBIL score drastically.
Delayed or missing payment – If you are not making payment of credit card dues on time, it will leave a negative impact on your credit score. Ensure that you pay your credit card bills in full every month before the due date. A consistent buildup of overdue can lower your CIBIL score.
Ways to get a bike loan with a bad CIBIL score
If you have a bad credit score and still need a loan, here are the tips and tricks:
More down payment - With a bad credit score, you can pay the more down payment. It is the fixed amount you need to make at the time of a two-wheeler purchase. The lenders usually finance 80 to 90 percent of the on-road price of a vehicle, the remainder is paid upfront as a down payment. Making a down payment reduces a lot of outgoes on your interest rate and reduces the loan tenure. This is a suitable option as the loan amount to be repaid is less. It will also help in building up good credit for future loans.
Compare multiple lenders - It is always wise to keep multiple options open for selecting and comparing different lenders when you are having a low CIBIL score. By doing enough research, you will be successful in getting a two-wheeler loan from the right lender with a better interest rate, terms, and conditions. Banks and credit institutions look for additional criteria such as employment and a steady state of income.
Co-signer - A co-signer is a person who is equally held responsible for your two-wheeler loan. They are your guarantors. If you have a bad credit score, getting a co-signer with a good credit score could be another viable option to get a two-wheeler loan. The creditworthiness of your co-signer will be taken into consideration for loan approval.