Low-cost manufacturing in the electronics industry is becoming more demanding, particularly in the production of consumer electronics. Such manufacturing processes require reliable and low-cost lead-free solders. Among the low-temperature lead-free solders, eutectic Sn-Bi solder attracts a great deal of interest as it offers good reliability compared with that of Sn-Pb solders. In this paper, the reliability of eutectic 42%Sn-58%Bi (wt.%) lead-free solder is studied using combinations of environmental tests such as thermal aging (TA) at 100 °C, salt spray test (SST), and a sequential combination of TA and SST. Microstructural studies on the samples are performed at different time intervals. To study the effect of salt spray and TA on the mechanical reliability, drop testing is performed on the samples. Failure analysis is conducted after different tests. Marked corrosion is seen after the SST. This also has a considerable effect on the impact strength of the solder interconnections. TA increases the thickness of the intermetallic layers, which is found to affect the drop performance.