Taking a bike loan involves a complicated process. From the moment you apply till you receive the approval, fear of rejection will persist. If there is anything wrong with your credit score or the income proof, your lender can reject your loan application. But even if you get these things checked, the documents submitted might create problems. Most lenders scrutinize the documents submitted with the loan application thoroughly. If any document is missing or not up to the mark, the application can be rejected.

So, it’s important you know the document required for bike loan before you apply. It will help you gather all the papers properly so that the chances of loan rejection can be minimized. That being said, below we have crafted a detailed guide on the essential bike loan documents required. These are the standard papers and proofs that most lenders ask for to evaluate the applicant’s eligibility for the bike loan.

Documents you need to submit for a bike loan

Identity proof

Your lender will want to know if you are an Indian citizen or not. For this, it’s essential to submit an ID proof. You can choose any of the below documents for your identity proof.

1. Aadhar card
2. Pan card
3. Voter’s card
4. Driving license
5. Passport (not expired)
6. Photo credit card

If you don’t have any of the above-mentioned documents, you can use any document issued by the government.

Address proof

You will also need to submit an address proof as a document required for bike loan. It should have the full address of your residence.

1. Aadhar card
2. Voter’s card
3. Driving license
4. Valid passport
5. Utility bills with no more than two months old
6. Property paper
7. Municipal document
8. Bank account statement

Income proof

Loans cannot be given to an unemployed person or one with no stable income source. Also, your income needs to be high enough to help you repay the loan. For this, most lenders ask for an income proof. If you are a salaried employee, below are the documents you have to submit.

1. Payslips for the last three months
2. Bank account statement with salary credit information of the past three months
3. Form 16 given to you by your employer
4. Latest ITR file

For self-employed applicants, the income proofs required are:

1. Bank statement containing transactions from the past three months
2. Latest ITR file

Failure to provide valid income proof can result in high bike finance interest rate.

Age proof

According to government regulations, you need to be at least 18 years of age to ride a bike with a 50cc engine. Hence, you need to provide an age proof.

1. Aadhar card
2. Birth certificate
3. Voter’s card
4. Valid passport
5. Driving license

Recent photograph

Another document required for bike loan is your recent photograph. Usually, it’s a passport-sized photograph you have to submit with all other documents.

When can a bike loan application get rejected?

Despite you submitting all the necessary documents, your loan application may get rejected. Knowing the potential causes leading to such events is crucial. At least, then you can prepare yourself well enough to ensure the application gets approved.

1. Low credit score: Most lenders approve bike loan applications for individuals having a credit score of more than 660. This number declares your ability to repay the loan without becoming a defaulter. So, the higher the credit score, the more your lender will feel assured. Any credit score lower than this can also result in an extremely high bike finance interest rate.
2. Unstable employment history: If your employment history shows frequent job changes or unemployment for months, your application may get rejected. That’s because such a job history involves high repayment risks.
3. Insufficient income: Every lender has a specific income limit for the bike loan applicants. If your monthly salary is below this limit, you won’t be able to pay the EMIs on time. As a result, the credit risk will automatically increase. That’s why your loan application might get rejected.
4. High income-to-debt ratio: Sometimes, bike loans can get rejected due to the applicant’s existing debts. It means that you have higher debts than your income limit, which is why lenders become a bit skeptical about loan repayment.
5. Poor credit history: Another reason for bike loan rejection is a poor credit history. If your lenders find that you have a history of missed EMIs or delayed payments from the document required for bike loan, your application is likely to be rejected.
6. Unstable residential address: If your address changes frequently, lenders will find the application to be at high risk of non-repayment. That’s why they can reject your bike loan application.

Conclusion

Bike loans are indeed of huge help for people who don’t have enough capital to purchase the two-wheeler. However, you need to ensure the document required for bike loan is accurate. If not, your loan application will be rejected.