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Two Wheeler Loan with a Low CIBIL Credit Score

Two Wheeler Loan with a Low CIBIL Credit Score

finance
August 2, 2022
5 min read
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Two Wheeler Loan with a Low CIBIL Credit Score
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Planning to buy a two-wheeler? But not sure, as you have a low CIBIL credit score. Well, buying your dream bike may require you to have a good CIBIL credit score if you are planning to buy it using a two wheeler loan. What if you have a low CIBIL credit score? Can you buy a two wheeler if you have a low CIBIL credit score? Let’s find out. 

In India, a sizable portion of the population commutes daily on two-wheelers. Due to the difficulty of commuting because of traffic, two-wheelers have recently become one of the most preferred ways of transportation. The demand for two-wheelers has surged, as has the need for two-wheeler loans, as more individuals are seeking speedy and secure transportation. 

Two-wheeler loans are available from almost all leading banks and non-banking financial institutions (NBFCs) at competitive interest rates. The procedure for applying for a two-wheeler loan is easy and simple, and the majority of lenders provide applicants with the choice of applying for a loan online. To get a two-wheeler loan at a competitive interest rate, it is necessary to have a decent CIBIL credit score. If your CIBIL score is low, your request for a two-wheeler loan may be denied or the loan may be offered at a high interest rate.

Depending on the lender and other variables like the loan amount, loan term, etc, the CIBIL credit score required for your bike loan may vary. 

Why should you Consider Taking out a Loan for Buying a Bike?

There are various reasons for which a person may try to get a bike loan for two-wheeler. Listed below are some of the reasons:

  1. Low Down Payment Amount
    When you apply for a loan, the lender may offer you finances up to 90% of the cost of the bike. The remaining amount is what you need to pay. Lower down payment amount will help you in managing your expenses efficiently as you do not have to put down a huge lump sum amount for buying a bike. 
  2. Low Processing Charges
    The processing charges for a two-wheeler loan will also be lower as lenders offer competitive rates. However, the processing charge may become lower if you have a good CIBIL credit score. 

How to Get a Two Wheeler Loan with a Low CIBIL Credit Score?

If you have a low CIBIL credit score and you want to get a two wheeler loan, there are various ways to get one: 

  1. Increase the Amount of Down Payment
    The amount of down payment will increase for a two wheeler loan if you have a low CIBIL credit score. You may increase the amount of down payment to get a bike loan if you are struggling with your CIBIL score. Also, as you will be paying more as down payment, the interest charges you will have to bear will decrease too as the total amount of loan will reduce. 
  2. Arrange a Co-signer
    Look for a reliable guarantor or co-signor to sign up the two wheeler loan if you have a low CIBIL credit score. However, the co-signor you choose must have a really good CIBIL score. The creditworthiness of your guarantor will be taken into consideration by the lender for granting you the bike loan. 
  3. Compare Interest Rates
    When you have a low CIBIL credit score and you are looking to finance a bike loan, you should compare interest rates offered by various lenders. Do not settle for the first offer that you get for your two wheeler. Some of the lenders may offer you lower interest rate two wheeler loan even if you have a low CIBIL credit score. 
  4. Negotiate with the Lender
    May be you have a low CIBIL credit score due to genuine reasons. For example, your low CIBIL score is the result of non payment of your previous loan. And you had failed to repay on time because of genuine financial reasons. Ensure that you discuss such issues with your lender. May be they will agree to offer you a two wheeler loan with low interest rate besides having a low CIBIL credit score. 

It is therefore important to maintain a good CIBIL score. With a good score, you can easily get multiple two wheeler loan offers at competitive interest rates, which will be beneficial for you financially. If you do not have a good CIBIL credit score, work towards improving it before applying for a bike loan. 

FAQs Related to Two Wheeler Loan with a Low CIBIL Credit Score

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Is CIBIL credit score required for getting a bike loan?

Yes. Your CIBIL credit score is assessed by the lenders and financial institutions when you apply for a bike loan. Better CIBIL score means you will get lower interest rates on your bike loan. Whereas with low CIBIL credit score, you will be offered high interest rate loans as a low score denotes less credibility as a borrower. 

What is a good CIBIL score for bike?

A CIBIL credit score of 750 or more can fetch you low interest rates on your two wheeler loan. The processing charge for the two wheeler loan may also lower down if you have a good CIBIL credit score. 

What interest rate will I get for a two wheeler loan if I have a low CIBIL credit score?

Different lenders and financial institutions offer different interest rates on two wheelers. However, you should always compare all the available offers that you are getting for the two wheeler loan if you are someone with a low CIBIL credit score. Also, note that there is a processing fee that you will have to pay for the bike loan. The processing fee of a bike loan also varies from lender to lender. 

Can I get a bike loan if my CIBIL score is 300?

The CIBIL credit score ranges from 300 to 900. A CIBIL score of 300 is deemed to be poor. It will be really challenging for you to get a bike loan with a CIBIL score of 300. Improve your CIBIL credit score by adopting healthy financial habits and apply for a bike loan when your credit score improves to get better offers.