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Two-Wheeler Loan

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% p.a. to 18.00% p.a. Rs.30,000 to Rs.2.50 lakh 2% of the loan amount + GST
Bank of India 7.35% to 8.55% Up to Rs.50 lakh Rs.500 to Rs.10,000
HDFC Bank 20.90 % Rs.20,000 to Rs.2 lakh 2.5% of the loan amount
Punjab National Bank 9.3% (RLLR + 2.75%) Up to Rs.1.50 lakh Rs.500 to Rs.1,000
Union Bank of India 8.40% to 9.90% 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

Key Highlights:

  • Get loans for both regular two-wheelers as well as superbikes.
  • Get easy loans with low minimum income requirements.
  • Repayment tenure of up to 3 years.
Interest rate EMI Processing fee Payment
16.05% p.a. Rs.3,518 2% of the loan amount Rs.1,28,654

Note: The figures in the table above have been calculated based on a principal amount of Rs.1,00,000, an interest rate of 16.05% p.a., and a tenure of 3 years. The processing fee percentage has also been factored into the EMI calculation. The interest rate may change at the bank’s discretion.

Bank of India

Key Highlights:

  • Loans available for both normal two-wheelers and superbikes as well.
  • Financing is available for new two-wheelers and used two-wheelers.
  • Repayment period of up to 5 years.
Interest rate EMI Processing fee Payment
7.35% p.a. Rs.1,997 1% of the loan amount (minimum Rs.500 & maximum Rs.10,000) Rs.1,20,300

Note:The figures in the table above have been calculated based on a principal amount of Rs.1,00,000, an interest rate of 7.35% p.a., and a tenure of 5 years. The processing fee percentage has also been factored into the EMI calculation. The interest rate mentioned in the table is the current rate of interest charged by the bank.

HDFC Bank

Key Highlights:

  • Get financing of up to 100% of the value of your vehicle.
  • Enjoy flexible repayment options.
  • Get fast and easy loan approvals and disbursements.
  • Online loan application process.
Interest rate EMI Processing fee Payment
20.90% p.a. Rs.3,091 2.5% of the loan amount Rs.1,51,377

Note: The figures in the table above have been calculated based on a principal amount of Rs.1,00,000, an interest rate of 20.9% p.a., and a tenure of 4 years. The processing fee percentage (3%) has also been factored into the EMI calculation. The interest rate may change at the bank’s discretion.

Punjab National Bank

Key Highlights:

  • 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.
Interest rate EMI Processing fee Payment
9.55% Rs.2,103 0.5% of loan amount
Rs.1,27,158

Note: The figures in the table above have been calculated based on a principal amount of Rs.1,00,000, an interest rate of 9.55% p.a., and a tenure of 5 years. The processing fee percentage has not been factored into the EMI calculation. The interest rate may change at the bank’s discretion.

Union Bank of India

Key Highlights:

  • The bank offers up to Rs.10 lakh for purchasing two-wheelers.
  • There is no prepayment fee if you prepay using your own funds.
  • Repayment tenure of up to 3 years.
Interest rate EMI Processing fee Payment
9.90% p.a. to 10.00% p.a. Rs.3,222 NIL Rs.1,15,993

Note:The figures in the table above have been calculated based on a principal amount of Rs.1,00,000, an interest rate of 9.90% p.a., and a tenure of 3 years. The interest rate may change at the bank’s discretion.

Axis Bank

Key Highlights:

  • 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.
Interest rate EMI Processing fee Payment
10.80% - 28.30% Rs.2,575 2.5% of the loan amount Rs.1,31,593

Note: The figures in the table above have been calculated based on a principal amount of Rs.1,00,000, an interest rate of 10.80% p.a., and a tenure of 4 years. The processing fee percentage (8%) has been factored into the EMI calculation. The interest rate may change at the bank’s discretion.

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
Monthly income Rs.7,000 Rs.6,000
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’s Don’ts
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

  1. Can I get a loan to fund the total value of the vehicle?
  2. 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.

  3. Should I choose a floating interest rate or a fixed interest rate?
  4. 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.

  5. What is a two-wheeler loan prepayment? How does prepayment help?
  6. 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.

  7. Should I offer collateral when I take a loan to buy a 2-wheeler?
  8. 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.

  9. What will happen if I am not able to repay my loan on time?
  10. 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.

  11. Can I get a loan if I am a student and have no income?
  12. 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.

Two Wheeler News

  • Karnataka Bank Collaborates with Toyota Kirloskar Motor for Financing Solutions

    Toyota Kirloskar Motor announced on Monday, 6 December 2021 that they have collaborated Karnataka Bank. With this collaboration, the two organisations are planning to provide financing solutions to their customers all over the country. According to the memorandum of understanding (MoU) signed by both organisations, Karnataka Bank will provide competitive interest rates to customers purchasing Toyota cars.

    7 December 2021

  • TRK 251 Adventure to be launched by Benelli in India

    Italian motorbike manufacturing company Benelli released a teaser of their upcoming model TRK 251 Adventure announcing that the bike will launch on 6 December 2021.

    The bike manufacturing company last launched Benelli 502C in July 2021 and did not bring any other model. The latest model will interest bike enthusiasts in India as it comes with a host of features. The bike will be priced between Rs.2 lakh and Rs.2.5 lakh.

    6 December 2021

  • Harley-Davidson Sportster S has been launched at India Bike Week 2021

    Harley Davidson launched the Sportster S at a starting price of Rs.15.50 lakh at the India Bike Week 2021. After the Pan America 1250, the Sportster S is the second model based on the new Revolution Max 1250 platform. This is also the second motorcycle launched after Harley Davidson partnered with Hero MotoCorp for India operations.

    Sportster S is powered by a 1252-cc V-twin engine that is tuned for more torque lower in the rev range. The engine output is 121 bhp with a peak torque of 127 Nm that is achieved at 6,000 rpm. The engine is equipped with variable valve timing on intake ports as well as exhaust ports.

    The motorcycle has a 4-inch TFT instrument console, full LED lighting and Bluetooth connectivity. Sportster S comes with Cornering Rider Safety Enhancements to ensure safe riding during adverse road conditions.

    6 December 2021

  • Honda to relaunch the CB300R in India

    After discounting the bike earlier, Honda will relaunch the CB300R in India. Apart from the CB300R, the company will also launch the anniversary edition of the CB350 H’ness. The CB300R was earlier imported as a CKD unit and is a neo-retro styled naked motorcycle. The earlier variant of the bike was powered by a 286cc engine. Earlier, the bike was available at an ex-showroom price of Rs.2.41 lakh and competed against the likes of the BMW G310R and the KTM 390 Duke. The company may launch a locally manufactured CB300R.

    6 December 2021

  • Two-wheeler sales of Bajaj decline by 12 percent in November 2021

    Bajaj Auto has reported overall sales volumes for November 2021. Compared to 3,84,993 units sold in November 2020, overall two-wheeler sales of Bajaj declined by 12 percent in November 2021 with a total of 3,38,473 units being sold. Overall volumes of two-wheelers and commercial vehicles were down by 10 percent and stood at 3,79,276 compared to 4,22,240 units dispatched in November 2020. Domestic two-wheeler sales declined 23 percent, down from 1,88,196 units in November 2020 to 1,44,953 units in November 2021.

    3 December 2021

  • TVS Launches Apache RTR 200 4V in India

    In India, TVS has unveiled the new Apache RTR 200 4V. The new 2022 TVS Apache RTR 200 4V is priced at Rs.1.33 lakh ex-showroom Delhi for the single-channel ABS option. The new Apache RTR 200 4V, like the new RTR 160 4V, features a revised headlamp assembly. This 200cc naked streetfighter has a blacked-out headlamp assembly, as well as a new distinctive LED DRL in the centre for a sportier look. Apart from the headlight configuration, the Apache RTR 200 4V retains its position as the most feature-rich motorcycle in its class.

    1 December 2021

  • Royal Enfield sells 7,851 units of the Meteor 350 in October 2021

    The sale of Royal Enfield (RE) witnessed a drop in October 2021 on a Year-on-Year (YoY) basis owing to the sales slowdown in the automobile market in India. A total of 7,851 RE Meteor 350 bikes were sold in October 2021.

    The sale figures for RE Meteor 350 in October 2020 was 6,184 units. A 26.96% jump in sales was observed for the bikes on a Month-on-Month (MoM) basis.

    29 November 2021

  • Benelli TRK 800 Adventure Bike has been unveiled at EICMA 2021

    Benelli has introduced the new Benelli TRK 800 at the EICMA 2021 in Milan. The adventure bike is powered by a 54 cc, parallel-twin, liquid-cooled, four-stroke engine. The engine consists of a double overhead camshaft with four valves per cylinder and a throttle body of 43 mm diameter.

    Benelli TRK 800 is a brand-new addition to the company’s range of adventure touring bikes. The design of this bike includes fuel tank extensions, adjustable windscreen, hand guards and integrated LED turn indicators. It also features a high-resolution 7-inch full-colour TFT instrument console.

    TRK 800 has 19-inch front wheels and 17-inch rear wheels with dual-purpose tyres. The bike will be available for sale by the second half of 2022 globally.

    26 November 2021

  • At EICMA 2021, the concept of Royal Enfield SG650 was revealed

    The Royal Enfield SG 650 is the mix of the company’s classic and futuristic design. The concept model has brushed aluminium and black colourway, along with an interesting digital graphics scheme. For tanks and rims, a CNC billet machined from a solid block of aluminium is used. The engine used in this model is similar to the one used in Interceptor 650 and Continental GT 650, which is a parallel-twin unit. The chopped fender on the tail section is another attractive feature apart from the fat Metzeler tyres.

    24 November 2021

  • Bounce Infinity set to launch on 2 December 2021

    Bounce will be launching Infinity, its maiden consumer electric scooter in December 2021. The electric scooter rental start-up has taken over 22Motors and its manufacturing unit located in Bhiwadi, Rajasthan for $7 million. Bounce is also planning to establish a plant in South India.

    Bounce Infinity will be available for bookings at an initial payment of Rs.499 from 2 December 2021. The deliveries of these electric scooters are scheduled for early 2022.

    22 November 2021

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