India is one of the largest two-wheeler markets in the world. The immense popularity of bikes and scooters is quite understandable. They are an affordable means of commuting, are fuel-efficient, have low maintenance requirements, and are well suited for rough Indian roads that are always teeming with traffic. The majority of people use a two-wheeler loan to buy the bike or scooter of their choice. These loans can be conveniently availed online, and come with attractive rates, flexible repayment tenors, and a quick processing and disbursal mechanism.
However, you need to meet all the two-wheeler loan eligibility criteria to get the loan amount you desire. These include a healthy credit score, a stable and regular income, and low outstanding or ongoing debts. To carry out the Know Your Customer (KYC) process and to verify your ability to repay the amount, lenders will ask you to furnish the requisite documents required for a bike loan. While the list of specific documents can vary from one lender to another, this article will explain the key documents needed and their importance while securing a bike loan.
Documents required for a bike loan
PAN Card
As is the norm with any significant financial transaction, a valid PAN Card of the loan applicant is a mandatory requirement for all lending organisations. Most insist that the PAN Card should also be linked to the bank account through which you will be making the EMI payments. If you are self-employed, the PAN Card should also be linked to your Income Tax account.
Recent photograph
As part of the loan application process, banks and NBFCs require a copy of your recent photograph (usually two in number). Most lenders prefer this to be a colour photograph without you wearing any mask, headgear, or glasses in it. Since a lot of loan applications are now submitted online, many lenders have the provision of uploading a soft copy of the photograph in JPG or PNG formats.
Identity proof
An identity proof issued by the government or a recognised issuing department valid at the time of applying for the loan needs to be submitted, and it should contain your full name and photograph. Check the list of bike loan documents before you reach out to the lender to apply for a bike loan.
- PAN Card – Since PAN Card is a mandatory requirement, it is the most commonly used ID proof
- Aadhaar Card/Aadhaar acknowledgement letter
- Passport
- Voter’s ID Card
- Driving Licence
- Central or State Government issued pension card
- Central or State Government issued ration card
Address proof
Address proof is needed to provide documented confirmation regarding your status and place of residence. Most lenders require applicants to have been living at the same address for a minimum of 12 months. The options for address proof documents required for a bike loan are plenty.
- Aadhaar Card/Aadhaar acknowledgement letter
- Passport
- Voter’s ID Card
- Central or state government issued pension card
- Central or state government issued ration card
- Utility Bill (such as post-paid mobile phone or landline telephone, electricity, water, gas connections).
Note: If a utility bill is being furnished as an address proof, then it needs to be less than 2 months old at the time of application submission. Passport, Aadhaar Card and Voter ID are the most convenient options as they can double up as both ID and address proofs.
Income proof
An income proof gives confidence to lenders that you have the financial resources to pay back the loan amount. Since loans are offered to both salaried and self-employed applicants, there is a slight difference in the income proof documents required for a bike loan.
- Salaried people
- Certificate of employment – On the letterhead of the current employer, and stamped and signed by the authorised representative
- Appointment letter – If you have spent over two years in the current job
- Salary slips for the last three months
- Corresponding bank statements showing the credit of the said salary
- Recent Form 16/16A showing salary earned and TDS deducted
- Self-employed people
- If the office is self-owned, then proof of address and ownership of the office, such as recent electricity bills, property documents, or a lease agreement should be provided
- If you have a registered business, then you need to present a copy of GST registration and registration licence
- If you own a company or firm, then the certificate of incorporation should be furnished
- Income Tax Returns (ITR) of the recent two financial years, attested by an authorised Chartered Accountant should be provided
- Audited financial statements
- Bank account statement or copy of passbook showing entries for the last 12 months should be submitted
As per the lender’s internal policies, in case the submitted documents are deemed unsatisfactory, you may be asked to provide additional documents such as proof of investment holdings (stocks, mutual fund units, fixed deposits, etc.). Self-employed professionals may even be asked to furnish their professional degree certificates.
Conclusion
Once you have all the requisite documents ready, you should take the time to research your loan options and compare the rates and terms being offered by different lenders. The interest rate will have a direct bearing on your monthly EMI and the overall amount to be paid. Using a bike EMI calculator, you can easily determine the interest you will need to pay over the principal amount borrowed and make the most financially prudent borrowing decision.
