Check out the various two-wheeler loans available to you if you're looking to take out a loan to buy a motorcycle. Take a look at some of the banks that can provide you with these loans. Interest rates, processing fees, and EMIs are all factors to consider. Continue reading to discover the best solution for you.
Two-Wheeler Loan Interest Rates for All Banks
|TWL Banks||Interest Rate||Loan Amount||Processing Fees|
|State Bank of India||16.25% to 18.00%||Rs.30,000 to Rs.2.50 lakh||1.5% of the loan amount + GST|
|HDFC Bank||12.50% to 18.16%||Rs.20,000 to Rs.2 lakh||2.5% of the loan amount|
|Punjab National Bank||10.00%||Up to Rs.1.50 lakh||0.5% of the loan amount subject to Rs.500 to Rs.1,000|
|Union Bank of India||9.90% p.a. to 10.00% p.a.||Up to Rs.10 lakh||NIL|
|Axis Bank||10.80% - 28.30%||Rs.25,001 onwards||2.5% of the loan amount|
State Bank of India
- Get loans for both regular two-wheelers as well as superbikes.
- Minimum income criteria is Rs.12,500
- Minimum loan amount
- Repayment tenure of up to 3 years.
- Get financing of up to 100% of the value of your vehicle.
- Minimum monthly income required is Rs.10,000
- Enjoy flexible repayment options.
- Get fast and easy loan approvals and disbursements.
- Online loan application process.
Punjab National Bank
- Special two-wheeler loan scheme for women borrowers.
- Extended repayment period of up to 5 years (60 months) for scooters and motorcycles.
- Low minimum monthly income criterion.
Union Bank of India
- The bank offers up to Rs.10 lakh for purchasing two-wheelers.
- There is no prepayment fee if you prepay using your own funds.
- No prepayment penalty
- Hypothecation of vehicle purchased out of bank's finance
- No guarantee required for individual borrowers with CIBIL score of 700 and above
- Zero processing fee
- Repayment tenure of up to 3 years.
- Get financing of up to 100% of the value of your vehicle.
- Repayment tenure of up to 4 years.
- You can apply online for a two-wheeler loan.
- Minimal documentation required
- Flexible tenure options from 12 to 48 months
Two-wheeler Loan Eligibility
Lenders have certain eligibility criteria they expect you to fulfil before they process your application. These may vary from one lender to another. Some of the general eligibility criteria are as follows:
|Requirements||Salaried Individuals||Self-employed individuals|
|Age||Minimum – 21 years at the time of application Maximum – 65 to 70 years at the end of the loan tenure||Minimum – 21 years at the time of application Maximum – 65 to 70 years at the end of the loan tenure|
|Credit score||Above 750||Above 750|
|Loan amount||Up to 100% of the value of the vehicle||Up to 100% of the value of the vehicle|
|Residential stability||Must be staying at the current address for at least 1 year||Must be staying at the current address for at least 1 year|
|Work experience||At least 1 year||At least 1 year|
Note: These criteria may be different for different lenders. Check with the lender of your choice before applying.
Documents Required for Two-Wheeler Loans
Every lender requires you to submit certain documents while applying for a loan. Some of the general documents required are given below:
|Particulars||Salaried Individuals||Self-employed individuals|
|Identity Proof||PAN card, voter’s ID, passport, driving license||PAN card, voter’s ID, passport, driving license|
|Address Proof||Utility bills, passport, etc.||Utility bills, passport, etc.|
|Income Proof||Salary slips, IT returns, bank statements||Bank statements, IT returns, audited financial statements|
Note: The documents required may differ from one lender to another. Check with your lender for what they require you to submit.
What Are the Advantages of Taking a Two-Wheeler Loan?
Applying for a loan to buy the bike you have always wanted can benefit you in a number of ways. Some of them include:
- Get the funds you need to buy the bike you want.
- Use a guarantor or co-applicant to get the money you need.
- Get funds to buy superbikes as well.
- Get affordable interest rates.
- Enjoy a wide spectrum of loan repayment periods.
- Repay your loan in affordable EMIs.
- Pay every EMI on time and build your credit history.
Use BankBazaar’s Two-Wheeler EMI Calculator to Know Your EMI
BankBazaar brings you a unique EMI calculator to help you find out exactly what your EMI will be. The tool helps you find out how much you have to repay every month in just a few minutes. The steps of how to use this tool are given below:
- All you need to do is to input the amount you want to borrow, select the interest rate charged by the lender, and the tenure of the loan.
- You can also select whether or not you intend to prepay parts of your loan. Also, you can type in any processing fees that you have to pay.
- After this, simply hit ‘Calculate’. Your EMI will be shown in a few seconds. You will also get the amortisation table for your loan. This table will show you how you have to repay the loan over the tenure you have chosen.
- The table will show you the interest and principal components of each EMI along with how much interest you will pay over the loan period. This helps you find out how much the loan will cost you.
Tips for a Successful Two-Wheeler Loan Application
A few loan applicants have had their applications rejected by lenders. This is not a pleasant feeling and it is not good for your credit score. We have put together a list of tips that can help you apply successfully for a two-wheeler loan. These are as follows:
- Determine the exact loan amount required: You should assess your needs and calculate exactly how much money you need to buy the bike you want. You should never apply for an amount larger than what you need.
- Check your eligibility and compare your options: Once you decide how much money you need to borrow, take a look at all the loan options that you are eligible for. This is important. Never apply for a loan you don’t qualify for. This will automatically get your application rejected. Check your eligibility for a two-wheeler loan and make sure you fulfil all the criteria.
- Check your credit score: Your credit score is one of the most important factors that determine loan approval. Lenders usually reject applications with low credit ratings. So, if your credit history is poor, look at improving it before applying for the loan.
- Get a guarantor or co-applicant: If your credit score is not up to the requirement of the lender, see if you can get a guarantor or co-applicant. Having a guarantor or co-applicant who has good credit can help you get the loan you want.
- Fill your loan application properly: Make sure your application is fully filled with all the details your lender requires. An incomplete application or an application that has wrong information may be rejected.
- Submit all the necessary documents: While submitting your loan application, make sure you submit all the documents the lender requires as well. If you don’t submit the required papers, your application may be rejected.
- Try applying with your existing lender: If you already have a good existing relationship with a bank, try taking the loan from them. This good standing may help you get a loan even if you don’t fulfil all their criteria.
Points to Remember While Applying for a Two-Wheeler Loan
Now that you know how you can successfully apply for a motorbike loan, let’s check out what you need to keep in mind while applying for one. These points can help you find the right loan and avoid paying more than you should.
- Do your research well: This is the first step before you apply for a motorbike loan. Make sure you do your research well. Compare all the options that various lenders offer you. Compare interest rates, processing fees, repayment options, and other loan terms. This will help you find the best and cheapest option.
- Choose your tenure wisely: The tenure of your loan will determine how much you have to repay each month. Make sure you can afford your EMI. This means you have to be wise about choosing your tenure. A shorter tenure will help repay the loan faster. But your EMIs will be high. So, choose according to how much you can afford to pay off every month without facing a financial crunch.
- Choose an affordable interest rate: Your interest rate determines the overall cost of your loan. It also has an impact on your EMI. Choosing a loan with a low rate of interest can help keep your EMIs low. It will also make your loan cheaper.
- Compare floating rates versus fixed interest rates: Some lenders may offer you both floating interest rates as well as fixed interest rates. Floating rates change as per the changes in the market rates. Fixed rates remain constant irrespective of market rate changes. That said, floating rates are usually lower than fixed rates.
- Compute your EMIs before applying: When you compare your loan options, make sure you compare the respective EMIs as well. Choose a loan that gives you an affordable EMI with a convenient repayment period.
- Ask about prepayment fees: If you plan on prepaying or foreclosing your two-wheeler loan at any point, find out the charges for the same. Some lenders may charge you a fee for this while others may not. Prepaying your loan can help you save interest costs.
- Read the terms and conditions properly: This is also called the fine print. Read your loan offer document thoroughly and go through every single term and condition before you sign it. The fine print may reveal hidden charges and fees that may otherwise never be mentioned. Knowing these terms can help you avoid paying heavy penalties.
Do’s and Don’ts of Applying for a Two-Wheeler Loan
Let’s now look at the do’s and don’ts of applying for this loan.
|Do your research well before you apply||Don’t apply for multiple loans at the same time|
|Make sure you are eligible for the loan you are applying for||Don’t apply for a loan simply because you get an attractive welcome gift|
|Compare interest rates and find the best option||Don’t forget to fill in the application form properly|
|Compare processing fees and other charges||Don’t sign the loan documents without reading them thoroughly|
|Evaluate your credit score before you apply||Don’t choose an EMI you cannot afford|
|Submit all the required documents without fail||Don’t forget to pay your EMIs on time|
|Read the offer document carefully before signing it||Don’t forget to prepay your loan if you can|
How to Improve Your Chances of Getting a Two-Wheeler Loan?
In this section, we are going to take a look at how you can improve your chances of getting your loan approved. The loan requirements differ from one lender to another. Sometimes, you may find it hard to get the loan you are looking for. The following suggestions may help:
- Clean up your credit: Lenders pay a lot of attention to your credit score when evaluating your loan application. If you have a high score, you stand a better chance of getting the loan you want. You should check your credit report every now and then to see if you are making any errors. Taking corrective steps will help you clean up your credit.
- Balance your debt-to-income ratio: Your debt-to-income ratio compares your current debt situation to your current income. It shows how much of your monthly income is currently being used to pay off loans and bills. The lower this ratio is, the better are your chances of getting your loan. So, look at paying off a few loans before applying.
- Get co-signers if needed:Sometimes, getting a co-applicant for your loan can help you get what you are looking for. This helps especially if you have a poor credit score. You can also get another individual to guarantee the loan on your behalf. Keep in mind that the co-applicant and the guarantor will be held accountable if you don’t repay the loan on time.
- Don’t apply for multiple loans: When you apply for multiple loans simultaneously, lenders will realise that you may not take the loan they offer. This will make them reject your application. Keep in mind that multiple rejections can hurt your credit rating.
Take a look at some of the most commonly asked questions regarding two-wheeler loans.
Two-Wheeler Loan FAQs
- Can I get a loan to fund the total value of the vehicle?
- Should I choose a floating interest rate or a fixed interest rate?
- What is a two-wheeler loan prepayment? How does prepayment help?
- Should I offer collateral when I take a loan to buy a 2-wheeler?
- What will happen if I am not able to repay my loan on time?
- Can I get a loan if I am a student and have no income?
The answer to this depends on the lender you have taken the loan from. Most lenders will offer you a loan for only up to 80% to 90% of the vehicle’s value. You will have to bring in the rest of the money on your own. That being said, there are a few lenders who offer 100% financing. However, this may come at the cost of additional terms and conditions.
Sometimes, banks may offer you the choice of a fixed or floating interest rate. A fixed rate remains constant irrespective of market rate changes. A floating rate changes according to the market rate. People usually prefer taking floating rates because they are lower than fixed rates.
Prepayment is paying an EMI or multiple EMIs together before the amounts are due. Every time you prepay a part of your loan, it helps reduce the outstanding principal. This reduces your interest cost as well. So, prepaying your loan can help you save money.
No, you don’t have to offer collateral when you take this loan. The vehicle acts as collateral till you repay the loan in full. This is called hypothecation.
If you don’t pay the EMIs on time, the bank may repossess your vehicle. Since your bike or scooter is hypothecated, the bank has every right to confiscate your vehicle to make good the losses they suffer.
Yes, you may be able to get a loan if you are a student. In such cases, you can get a co-applicant such as a parent or a close relative to guarantee payment on your behalf. Do keep in mind that not all lenders offer loans to students.