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Two Wheeler Loan

Two Wheeler Loan Interest Rate in India Mar 2021

Last Updated 07th Mar 2021

  • Lowest auto loan interest rates starting @11.60%*
  • Compare and get the best two wheeler loan offers from banks
  • Apply for auto loan online
  • Get maximum loan amount based upon on road price and ex - showroom price
  • Maximum loan tenure upto 5 years
  • Lowest EMI of ₹ 220 per ₹ 10,000 for 5 years
Apply for Two Wheeler Loan @ 11.60%*

Compare Bike Loan Interest Rate

Bank Two Wheeler Loan Interest Rates* Lowest EMI per ₹ Ten Thousand for Max Tenure
Axis Bank 10.80% ₹ 216 for 5 years
SBI 16.05% ₹ 352 for 3 years
HDFC Bank 9.10% ₹ 249 for 4 years
PNB 9.55% ₹ 210 for 5 years
Bajaj Auto Finance 7.85% ₹ 313 for 3 years
IndusInd Bank 21.00% ₹ 377 for 3 years
Allahabad Bank 10.40% ₹ 214 for 5 years
Andhra Bank 9.90% ₹ 212 for 5 years
Bank of India 7.45% ₹ 200 for 5 years
Union Bank of India 9.90% ₹ 322 for 3 years
United Bank of India 9.55% ₹ 210 for 5 years
Corporation Bank 9.90% ₹ 322 for 3 years
Indian Bank 10.40% ₹ 214 for 5 years
Karnataka Bank 8.48% ₹ 205 for 5 years
Jammu And Kashmir Bank 8.70% ₹ 206 for 5 years
Canara Bank 9.00% ₹ 318 for 3 years

Bike Finance Eligibility

You may be eligible for 2 wheeler loan in India from one or more banks if you meet the following eligibility conditions:

Eligibility Criteria for Bike Loan
Minimum and Maximum Age
  • 21 Yrs. – 65 Yrs.

Note: However, many banks require minimum age of 18 years
Loan Amount
  • Upto ₹ 10 Lakh. Some banks give maximum loan upto ₹ 50 Lakh

Note: Loan amount depends upon the value of the two wheeler and the EMI you can pay
Net Monthly Income
  • Min. ₹ 18,000 per month
Employment Type
  • Salaried and Self Employed
  • Interest rates are typically in the range of 7.45% to 28.30% per annum
Minimum Work Experience
  • 1 year of total work experience
  • Business tenure should of 5 years & ITR required for at least 2 years (For Self Employed only)
CIBIL Score for Two wheeler Loan
  • 600 & more credit history

Note: Most banks avoid giving loans if you have low credit score

EMI for Two wheeler Loan

2 wheeler Loan EMI is the amount that you pay every month to the bank or financial institution in order to repay your loan. EMI is composed of both principal amount and interest component. Interest component on your EMI is higher in early months and reduced with each EMI. Two wheeler Loan EMI Calculator helps you to calculate your monthly EMI at desired interest rate for a particular tenure.

Auto Loan EMI depends upon loan amount, interest rate and loan tenure

  • Loan amount – If you apply for a high loan amount, then your EMI for auto loan will be high
  • Interest rate - Higher interest rate on your loan leads to high amount of EMI
  • Loan tenure – EMI on bike loan reduces in case of high loan tenure

Comparison of Two wheeler Loan Interest Rates in India

  • Processing fees – Most banks charges minimum processing fees of Nil to upto Rs.1,000. To get lowest fee, comparison of 2 wheeler loan rates, offers and cashback applying online through MyLoanCare.
  • Insurance premium – Bike loans are secured loans, but it is advisable to take an insurance policy when availing a loan. However, the premium varies from bank to bank depending upon the risk coverage under various policies. So, check the loan sanction letter carefully to know the coverage and premium.
  • Prepayment and foreclosure – When you want to repay your loan partially before time, it is called part prepayment. In case you decide to pay the entire loan amount before time, it is called foreclosure. Banks typically levy prepayment or foreclosure charges in such situations and these can range from nil to even upto 3%. So, check carefully if the low interest rate auto loan you are getting comes with high prepayment or foreclosure charges. Note that some auto loans cannot be repaid before time.
  • Down payment – Banks offer auto loans either at 80% of on-road price or 100% of ex-showroom price. However, 80% of on-road is almost equivalent to 95% of ex-showroom price. You are advised to fund maximum as down payment as it reduces your burden of high monthly payments.

Do’s and Don’ts while taking 2 Wheeler Loan

Do’s Don’ts
  • Check best discount and offers – Always check current offers and 2 wheeler loan interest rates offered to employees of large reputed companies
  • Do not apply for loan amount more than what you are eligible for – Applying for an amount higher than your eligibility may lead to rejection of your loan application
  • Compare two wheeler rates based on loan amount – Some banks offer lowest interest rate for 2 wheeler loan at higher loan amount
  • Do not apply with multiple banks – Simultaneous loan applications gets recorded in your CIBIL report and can hurt your chances of getting a bike loan
  • Discount for tenures – Banks may offer lower rates on bike loan for certain tenure
  • Your salary bank may not offer the cheapest loan – Various banks keep offering attractive schemes to acquire premium customers. Hence, salary bank may not be the best option

Checklist for Bike Loan

  • Identity proof
  • Residence address and ownership proof
  • Income proof
  • Bike quotation
  • Photo identity proof
  • Bank continuity proof
  • Bank statement
  • 1 passport size photograph
  • Latest ITR
  • CIBIL Score and report

Documents Required for Bike Finance

Documents ID Individuals Firms, Partnerships
Signed Application Form Required
Identity Proof PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-card
Certificate and Proof of Business Existence PAN, sales tax/ excise/ VAT/ service tax registration, Copy of partnership deed, Trade license, certificate of practice, registration certificate issued by RBI, SEBI
Address Proof Passport, Driving License, Election ID card, Electricity/ Telephone/ Mobile bill/ bank statement (not more than 3 months old) Bank statement, utility bill, Registry copy, lease or rent agreement, TAN allotment letter
Age Proof PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate
Income Proof Form 16, last 3 months salary slip, last 3 months bank account statement showing salary credit Last 2 years ITR, last 3 months bank account statement
Two wheeler Quotation Quotation of cost of two wheeler selected from the dealer

FAQs

Why do I need two wheeler loan?

Two wheeler loans are usually taken to buy a new bike or used bike. Auto loan rates are given at fixed or floating rate. If you have a low CIBIL score, then you should not apply in multiple banks for 2 wheeler loan as each rejection will drop your CIBIL score.

How can I apply for two wheeler loan?

You can get a two-wheeler loan either by visiting the Bank’s branch or by applying online to the Bank or NBFCs. Other than that, a two-wheeler loan can be applied from any online marketplace like MyLoanCare.in. This can make your loan process easy and also could help you grab the best deal.

What is the minimum and maximum tenure of two wheeler loan?

Auto loan is generally taken for a short period of time. Generally, bike loan tenure is between 2 years to 5 years.

What are the charges for two wheeler finance?

Apart from rate of interest, there are two types of charges being charged by the banks.

  • Two wheeler loan processing fee: This is charged when you apply for the loan. The processing fee charged on 2 wheeler loan is upto ₹ 1,000 of the loan amount and could be reduced if you can bargain.
  • Two wheeler loan preclosure fee: This is charged when you close your loan before the completion of loan tenure. Prepayment penalty charged may be upto 3% of the outstanding amount.

Is CIBIL Score important?

Auto loan CIBIL score is very important. Good CIBIL score indicates good repayment record and hence banks can offer you higher loan amount at low rate of interest for two wheeler finance. Bad CIBIL Score will result in either loan at higher interest rate or rejection of the loan application.So, make all your payments on time and maintain your CIBIL in order to get best auto loan rates.

What is ex-showroom price and on road price?

Ex-showroom price is the price of the bike including excise duty but excluding local duties and statutory charges.
On road price is the price you pay for the two wheeler including the ex-showroom price and cost of registration, insurance, octroi, municipal entry tax, road tax and any accessories. The on road price tends to be 15-25% more than the ex-showroom price and may vary from city to city.

Do I need to open a bank account to service my 2 wheeler loan?

Yes, you need to have at least one functional bank account in your name to get an auto loan. It is even better if you have an account with the same bank from which you would like to get an auto Loan.

What are the main factors that affect interest rate of two wheeler loan?

Two wheeler loan lowest interest rate depends upon factors like down payment, loan tenure, credit report and your net income. High income with good CIBIL and maximum down payment can lend you loan at low interest rate

How can I prevent rejection of my loan application?

Banks or NBFCs give two wheeler finance to those borrowers about whom they are sure that he/her can repay the loan. You need to know few things if you don’t want your application to get rejected:

  • Job stability for 2 wheeler loan is important. You need to be stable in your current job as too many job changes can impact negatively at the time of loan approval
  • You should not be having too many loans running at one time. Banks can reject your application if you are already paying too many EMI’s at same time.
  • Don’t give you landline number for tele-verification if you know that nobody else is there at home when you are at work. A typing mistake in apartment number can also put negative impact on lenders.

Banks or lenders keep on adding these small things and reject your loan application.

What should I do if my auto loan application gets rejected by bank?

Some possible reasons why your application gets rejected are already running multiple loans and hence a bank may be in doubt about your repayment ability of a new loan.

  • In this case, if you have a spouse who is also working, you can add him/her as a co-applicant to boost the combined salary levels.
  • Clear your old debts first so that your leverage levels come down.
  • Balance transfer of your existing loans so that the rate of interest on loans can come down and additional loan can be availed.

What is the interest rate on the bike loan?

The interest rate for a bike loan starts at 18.00%. The interest rates may vary across different Banks. Further, the interest factor is also dependent on the type of two-wheelers you wish to buy, the income of the applicant, age, and occupation.

How to finance a bike?

Opting for a bike loan is the easiest way to finance a bike. A variety of Banks and other lenders could provide you with funds to buy your dream bike. However, one needs to meet the essential eligibility criteria and documentation requirements.

Can a student get a bike loan?

A student can apply for a bike loan if he or she fulfills the basic eligibility criteria. An applicant must be a minimum of 21 years of age. However, the loan can be applied only with a co-applicant, who has a good CIBIL score and a fixed, reliable source of income.

How much can I pay as a down payment on a bike?

A down payment usually ranges from 15-30% of the two-wheeler value. However, it may vary across the lender. The amount of down payment made on the two-wheeler will decide the EMI of the bike loan. The bigger the down payment, the lower the EMI.


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Two Wheeler Loan News - Mar 2021
  • 2021-03-05 : Axis Bank launches WhatsApp banking
    Axis Bank launched banking services on WhatsApp. The new facility will enable its retail customers to seek information regarding their account balance, recent transactions, credit card payments, fixed and recurring deposit details, besides getting their queries answered in real-time.
  • 2021-03-04 : 10 lakh customers of other bank are using ICICI’s banking app, iMobile Pay
    ICICI Bank reported that 10 lakh customers of other banks have started using its app, ‘iMobile Pay’. The Bank has achieved the feat in three months after it made the app open for all to use, including those not its customers. The bank anticipates that the number is likely to double in two months.
  • 2021-03-02 : Banks credit rose by 6.58% and deposits by 11.75%
    Reserve Bank of India reported that the Bank credit which involves home, personal, LAP, two-wheeler, gold and education loans along with business and mudra loans grew by 6.58% to Rs 107.04 lakh crore in the fortnight ended February 12. Further, deposits which include FDs and RDs increased by 11.75% to Rs 147.81 lakh crore.
  • 2021-02-26 : IRDAI gives approval for Axis Entities-Max Life Insurance deal
    The Insurance Regulatory and Development Authority of India has given its approval to acquire up to 12% stake in Max Life Insurance by Axis Bank and its subsidiaries, Axis Capital and Axis Securities. The IRDAI approval was an important venture transaction that was first announced in April 2020
  • 2021-02-26 : IndusInd Bank to grow loan book by 15-18%
    IndusInd Bank is expecting to grow its loan portfolio by 15-18% year-on-year for the next two financial years under its fifth planning cycle.The Bank’s year-on-year growth in advances which include home, personal, LAP, two-wheeler car and gold loan along with business and mudra loan was flat at Rs 2.07 trillion until December 2020. Its deposits which include fixed and recurring deposits, grew by 10% to Rs 2.39 trillion.
*Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. Read More
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