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Two Wheeler Loan

Bike Loan Interest Rate in India Jul 2021

Last Updated 29th Jul 2021

  • Get two wheeler at lowest bike loan interest rates starting 11.60%*.
  • At MyLoanCare, you can compare and get the best two-wheeler loan offers from banks .
  • You can apply for a two-wheeler loan both offline or online.
  • Two-wheeler loan apply online is easy and fast as it requires minimum documentation.
  • Most of the banks offers 100% of finance of the cost of vehicles.
  • You can avail maximum loan amount based upon on-road price and ex-showroom price.
  • A borrower can get a bike loan for a maximum tenure of 3 years.
  • Lowest EMI for a two wheeler loan amounts to ₹ 220 per ₹ 10,000 for 5 years.
Apply for Two Wheeler Loan @ 11.60%*

Two Wheeler Loan Interest Rate in India

Bank Two Wheeler Loan Interest Rates* Lowest EMI per ₹ 10 Thousand for Max Tenure
Axis Bank 10.80% ₹ 216 for 5 years
SBI 16.25% ₹ 353 for 3 years
HDFC Bank 14.50% ₹ 276 for 4 years
PNB 9.55% ₹ 210 for 5 years
Bajaj Auto Finance 11.60% ₹ 330 for 3 years
IndusInd Bank 21.00% ₹ 377 for 3 years
Allahabad Bank 10.35% ₹ 214 for 5 years
Andhra Bank 9.90% ₹ 212 for 5 years
Bank of India 7.35% ₹ 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 10.35% ₹ 214 for 5 years
Karnataka Bank 12.45% ₹ 225 for 5 years
Jammu And Kashmir Bank 8.70% ₹ 206 for 5 years
Canara Bank 9.00% ₹ 318 for 3 years

Two Wheeler Loan

A two-wheeler loan lets you purchase your dream bike or any other two-wheeler without worrying about finances. Two-wheeler loans are available at a lower rate of interest starting from 11.60% for a maximum tenure of 3 years. This loan can be availed easily by submitting minimal documents. Most of the lenders offer 100% funding on the motorcycle or scooter.

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 11.60% 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

Comparison of Two wheeler Loan in India

A two wheeler loan from different lenders can be compared on following parameters:

  • Processing fees – Most banks charges minimum processing fees of Nil to upto ₹ 1,000. To get the lowest fee, you can do a comparison of 2 wheeler loan rates, offers and cashback while applying online through MyLoanCare.
  • Insurance premium – Bike loans are secured loans, but it is advisable to take an insurance policy when availing of 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 up to 3%. So, check carefully if the low-interest rate two wheeler loan you are getting comes with high prepayment or foreclosure charges. Note that some bike loans cannot be repaid before time.
  • Down payment – Banks offer two wheeler loans either at 80% of the on-road price or 100% of ex-showroom price. However, 80% of on-road is almost equivalent to 95% of the ex-showroom price. You are advised to fund maximum as a down payment as it reduces your burden of high monthly payments.

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 the principal amount and an interest component. Interest component on your EMI is higher in the early months and decreases with each EMI. The two wheeler Loan EMI Calculator helps you to calculate your monthly EMI at the desired interest rate for a particular tenure.

Two wheeler 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 an bike loan will be high
  • Interest rate - The higher interest rate on your loan leads to a high amount of EMI
  • Loan tenure – EMI on bike loan reduces in case of high loan tenure

Why Should you Take a Two Wheeler Loan?

Following are the benefits of availing two-wheeler loan:-

  • Drive your own vehicle and avoid long metro and bus queues
  • Enjoy 100% financing of the off-road price of a vehicle
  • Get a loan easily even when you do not have a good credit history

When Should You Take a Two Wheeler Loan?

Try availing two wheeler loans during festive season because lenders offer zero processing fees and free insurance during this time. Two wheeler loan can be taken for the following purposes:-

  • Personal use: If a person needs a two wheeler for a personal use then they can avail a bike loan.
  • Business use: If a person's business requires a two-wheeler then a two wheeler loan is a good idea as it can provide more reach to business in terms of delivery and transportation. If a two wheeler loan is taken for business then you can also get tax benefits.

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

Do’s Don’ts
  • Check the 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 a 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 the lowest interest rate for 2 wheeler loan at a higher loan amount
  • Do not apply with multiple banks – Simultaneous loan applications get 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, a salary bank may not be the best option

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 for personal use or business use . Some of the top two-wheeler loan lenders are Axis Bank, HDFC Bank, SBI and Bajaj Auto Finance, among others.

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 on the Bank or NBFCs website. Other than that, a two-wheeler loan can be applied from 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?

Two wheeler loan is generally taken for a short period of time and the tenure for every lender differs. 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: Processing fees is a fee charged for the processing the loan application. The processing fee charged on 2 wheeler loan is upto ₹ 1,000 of the loan amount and few lenders also waive off the fees especially during the festive offers.
  • 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?

CIBIL score for bike loan is very important. Good CIBIL score indicates good repayment record and hence banks can offer you a higher loan amount at a 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 the 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 a bike 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 get 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/she 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 loans 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 the same time.
  • Carefully give your address and phone number because if nobody is available during the verification it can have a negative impact on the credit score and lenders too.

What should I do if my bike 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, you can do the following:

  • 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 loans can be availed.

What is the interest rate on the bike loan?

The interest rate for a bike loan starts at 11.60%. 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, and also on the applicant’s income, age, and occupation.

How to finance a bike?

Opting for a bike loan is the easiest way to finance a bike.Various 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 at least 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 - Jul 2021
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*Terms and conditions apply. Credit at sole discretion of lender, which is subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and collected from public sources. Read More
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