दो पहिया वाहन ऋण के लिए सिबिल (CIBIL) स्कोर कितना होना चाहिए

CIBIL Score for Bike Loan

CIBIL score is one of the critical factors for determining eligibility for a loan. Even if it’s a bike loan, borrowers need to have a minimum CIBIL score to avail of the bike loan. A CIBIL score depicts the borrower's credibility, credit performance and repayment history. It is the basis upon which the lender assesses whether the borrower will be able to repay the loan. But what’s the minimum CIBIL score for a bike loan? Let’s find out!

Minimum CIBIL Score for Bike Loan

A CIBIL score above 701 is considered an admissible CIBIL score for bike loans. Most lenders would be ready to finance a bike loan to a borrower with a CIBIL score above 701. However, even if the CIBIL score is slightly lower, the lenders would still extend the bike loan to the borrowers.

Impact of a Low CIBIL Score on Two-Wheeler Loan

As stated earlier, the CIBIL score is essential to assessing the borrower's profile. If a borrower applies for a two-wheeler loan for a low CIBIL score, then the following can be the consequences for the same:

• Higher Interest Rate: If the CIBIL score is low, the lender may charge a higher interest rate against the two-wheeler loan. This is because the lower CIBIL score indicates more insufficient repayment capabilities of the borrower. This directly increases the risk of the lender. Therefore, they charge a higher interest from such borrowers to cover this risk.
• Lower Loan Amount: The lender may sanction a lower loan amount if the borrower has a lower CIBIL score. This is because lenders won’t want to increase their risk by sanctioning a higher loan amount.
• Rejection of Application: If the CIBIL score is too low, the lenders may reject the borrower's loan application. The lower the CIBIL score, the higher the risk.
• Requirement of a Co-applicant or Guarantor: If the lender feels the loan can be granted but is still risky, it may require a co-applicant or a third-party guarantor. A co-applicant or a third-party guarantor allows the bank to proceed against them in case the primary applicant defaults on payment of the EMI. This acts as a security for the lender and will enable them to extend two-wheeler loans for lousy CIBIL scores.

How to Improve Your CIBIL Score for a Bike Loan?

A higher CIBIL score for two wheeler loan not only increases the chances of getting the loan sanctioned but is also instrumental in getting lower interest rates and better terms. The higher the CIBIL score, the more options one can choose the best lenders that provide the lowest interest rate and better repayment terms. Borrowers should take the following steps to improve CIBIL score :

• Check the Credit Report for any Discrepancies: Check out the reasons why they have such a low CIBIL score. Is it because of missing out on EMI or because of any error in the credit report? If they find any discrepancy in the credit report, they can complain to the CIBIL to correct their credit report.
• Pay Credit Card Bills: If the borrowers have outstanding credit card bills that they have still not paid, they should ensure to pay them in full. Even if they have paid the minimum balance due, it impacts their credit report negatively. Therefore, one must pay the credit card bills on time before the due date and in full.
• Repay the EMIs Timely: If the borrowers have any ongoing loans, they should ensure to pay the EMI on the due date. The timely repayment of EMIs increases their credit score, which is reflected in the credit report.
• Limit the Credit Utilisation: A credit card has a significant impact on credit score. Therefore, it is essential to utilise credit cards wisely. One should not use a credit card above 30% of the credit limit. Even if required, one should ensure that the credit utilisation does not exceed 50% of the above limitation. Too much utilisation of credit cards indicates that the borrower depends on the credit to meet his needs.
• Don’t Make Hard Inquiries: Making multiple hard inquiries for loans reduces the CIBIL score. Hard inquiries happen when a lender requests the credit bureau to check an applicant’s credit report as part of the loan application process. The more one makes loan applications with lenders, the more challenging inquiries will be. Each hard inquiry can lower the CIBIL score by 3-5 points. It shows that the borrower is eager to avail of loans and is highly dependent upon the same. Therefore, borrowers should limit the hard inquiries and only do the same if they genuinely require a loan.

How to Get a Two-Wheeler Loan for a Low CIBIL Score?

The credit score improves over time. Therefore, if a borrower has a bad credit score, he can take the above steps to improve. However, it is not an overnight process and will take months to fructify. However, what about the borrowers who want a two-wheeler loan for a low CIBIL score? They can get the two-wheeler loan by following the below tips:

• Higher Down Payment: They should go for a higher down payment. This will directly reduce the amount of loan that they need, and the lender won’t be much reluctant to finance a lower amount. With two-wheeler loans, banks usually finance up to 80%-90% of the vehicle value. If the borrower pays a higher amount for the down payment, he can get the loan sanctioned with a lower CIBIL score and save a lot of interest costs.
• Negotiate the Lending Terms: Borrowers often make mistakes in credit performance that lead to a drop in the CIBIL score. However, they can still convince the lender to sanction the loan and provide better lending terms. Their income proof can be a game changer here. If they have sufficient income from a good earning source, the lender won’t be that reluctant to finance the two-wheeler. Further, the banking (i.e., bank statement) can also be instrumental in getting the two-wheeler loan sanctioned.
• Compare Different Lenders: Borrowers need to compare different lenders to find the one that offers the best lending terms. They don’t need to visit each bank to inquire about the loan physically. They can start by searching online. Compare and select the one that offers the best terms. They can then talk with their SM or RM about their situation and the reasons for the lower CIBIL score. This will help them get the loan at affordable rates and reasonable terms.
• Get a Co-applicant: Borrowers can get a co-applicant if the lender still feels reluctant to sanction their two-wheeler loan. A co-applicant secures the lender as the lender can require the co-applicant to pay if the primary applicant fails to pay the EMI. Some lenders may even go with a third-party guarantor. In either case, getting a co-applicant or a third-party guarantor can help them get the loan sanctioned and offer them better lending terms.
• Ensure Other Documents are Proper: Even if borrowers have a lower CIBIL score, they should ensure they meet all the other eligibility criteria. This is because the lenders usually approve the loan application if the borrower meets all the eligibility criteria barring one or two. Therefore, if a borrower has a lower CIBIL score but is earning a good income, has a good repayment history for the past few months or during the last year and provides complete bike loan documents , he may get his loan for a low CIBIL score as well.

Get a Quick Two Wheeler Loan at BOB

Bank of Baroda offers affordable and instant two-wheeler loans with affordable monthly instalments. It is one of the leading banks in the two-wheeler segment offering two-wheeler loans at attractive interest rates and minimal processing charges. There are no pre-closure charges, and borrowers can get a loan up to Rs. 10 lakhs. Whether you are a salaried employee, pensioner, professional, businessman, staff or a farmer – BOB will fulfil your dream of having your two-wheeler.

The applicants should be a minimum of 21 years of age and a maximum of 70 years at the time repayment is over. The loan can be availed for 60 months. The two-wheeler loan process is straightforward and quick. Book your two-wheeler now with BOB as your finance partner!

Parting Words

CIBIL score plays a significant role in getting a bike loan. It is advisable to know about the connection between your CIBIL score and eligibility for a bike loan.