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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% 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

Key Highlights:

  • 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.

HDFC Bank

Key Highlights:

  • 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

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.

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.
  • 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.

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.
  • 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
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

  • Tork Motors likely to launch Tork Kratos in India on 26 January

    Tork Motors, which was the first company to showcase an electric bike in the country in 2016 is planning to launch Tork Kratos on 26 January. The company had presented the T6X electric bike in 2016 and originally planned to launch it by 2018. However, that was not to be the case. The Kratos is essentially an evolved version of T6X and is significantly different from the prototype showcased in 2016. The e-bike sits on a new frame and comes sporting a reworked design as compared to T6X. It will have a digital instrument cluster and Tork Intuitive Response Operating System (TIROS) for a raft of features. The company claims that Kratos has a bigger battery pack as compared to T6X for a longer riding range.

    20 January 2022

  • 2022 Honda CB300R launched in India

    Honda India has launched the 2022 iteration of the CB300R motorcycle in India. The bike was showcased in the India Bike Week (IBW). The bike has been priced at Rs.2.77 lakh (ex-showroom).

    The bike comes with a 286 cc, 4-valve DOHC engine that churns out 31.1 hp of max power at 9,000 rpm and about 27.5 Nm of peak torque at 7,500 rpm. The new BS6 engine is also mated with a 6-speed gearbox and a slip and assist clutch. The motorcycle will be available through the Honda Big Wing showrooms across the country.

    17 January 2022

  • KTM launches new version of 250 Adventure series

    KTM has launched the 2022 version of its 250 Adventure model. The price of the bike will start at Rs.2.35 lakh and the bookings for the same have already begun.

    The bike comes with a 248cc four valve single cylindrical liquid cool engine with a torque of 24 Nm and generating power worth 302 Ps.

    17 January 2022

  • L&T Finance and Royal Enfield partner to offer two-wheeler loans

    An announcement was made by Royal Enfield stating that the company has partnered with L&T Finance to offer two-wheeler loans for individuals who wish to purchase a Royal Enfield bike. The new loan will be called Welcome 2022 and will come with fast loan approvals and no hypothecation. Loans are offered with interest rates starting from 7.99% p.a. Up to 90% of the on-road price of the bike may be provided as a loan and the repayment tenure is up to 4 years.

    12 January 2022

  • Dlx variant 2022 Yamaha FZS released at Rs.1.16 lakh

    Yamaha launched its 2022 FZS-Fi with a few updates and priced the vehicle at Rs.1,15,900. Now, the Dlx variant was added and this costs Rs.1,18,900. The 2022 FZS-Fi has Bluetooth connectivity and is Rs.1,000 more expensive than the Bluetooth-equipped model of 2021.

    5 January 2022

  • India’s Top Motorcycles under Rs.3.5 lakh

    The Royal Enfield Himalayan is available in India at a starting ex-showroom price of Rs.2.10 lakh. The motorcycle comes in nine colours and three variants. The top variant costs Rs.2.17 lakh. The Royal Enfield Himalayan weighs 199 kg and is powered by a 411-cc BS6 engine. This motorcycle produces a torque of 31 Nm and a power of 24.3 bhp.

    The Benelli TRK 251 was launched in India at a starting price of Rs.2.51 lakh (ex-showroom). With a 249cc BS6 engine, this motorcycle develops a torque of 21.2 Nm and a power of 25.47 bhp. It can be availed in three colours and a single variant. The Benelli TRK 251 weighs 164 kg and has an anti-locking braking system. The fuel tank capacity of this motorcycle is 18 litres.

    One-seater cruiser motorcycle Jawa Perak can be purchased at a starting ex-showroom price of Rs.2.08 lakh. The motorcycle comes in one variant and one variant. It is powered by a 334cc BS6 engine developing a power of 30 bhp and a torque of 32.74 Nm. It has an anti-locking braking system with front and rear disc brakes. Jawa Perak comes with a fuel tank capacity of 14 litres. The weight of this motorcycle is 175 kg.

    28 December 2021

  • Classic Legends likely to launch two new motorcycles on 13 January 2022

    Recently, Classic Legends teased the launch of a Yezdi motorcycle. A new teaser shared by the company stated the bikes will launch on 13 January 2022. It is likely that the company will launch two motorcycles, an Adventure motorcycle and the Roadking Scrambler. The Roadking Scrambler will compete against the likes of the RE Hunter 350 and Honda CB350 RS. The new adventure bike will compete against the RE Himalayan.

    27 December 2021

  • TVS launches Apache RTR 165 RP costing Rs.1.45 lakh

    The Apache RTR 165 RP has been launched by TVS at a cost of Rs.1.45 lakh, which is the ex-showroom price. It comes with a 5-speed gearbox with adjustable brakes, slipper clutch, and clutch levers. There will be only 200 units of this model with a weight of 148 kilos. The other specifications of the bike are as follows: The single-cylinder, four-valve, 164.9 cc, engine has a torque of 14.2Nm at 8,750rpm with 19.2hp at 10,000rpm.

    24 December 2021

  • Deliveries Ola S1 and S1 Pro electric scooter to commence from 15 December 2021

    Ola launched the S1 and S1 Pro electric scooters on 15 August 2021 in India. Over 1 lakh units of these electric scooters were pre-booked in a span of 24 hours before launch. The deliveries will begin on 15 December 2021. A special event will be held for the first 50 customers in Bengaluru.

    The Ola S1 and S1 Pro electric scooters are availed at ex-showroom prices of Rs.99,999 and Rs.1,29,999, respectively. In Gujarat, the two variants are being sold at the lowest prices. The Ola S1 is priced at Rs.79,999 and the Ola S1 Pro costs Rs.1,09,999.

    15 December 2021

  • Ducati Bikes to Become Expensive in India from January 2022

    Ducati India has announced a hike in its prices from January 2022. The company is yet to reveal the new prices; however, it has announced a hike in prices for all its models and their variants. This increase in prices will be applicable to all the bikes from Ducati that is retailed through all the official Ducati dealership throughout the country.

    15 December 2021

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