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Planning to buy a bike? Our two-wheeler loan services offer you the best deals. Apply now to ride your dream bike.
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.
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Two-Wheeler Loan Interest Rate Comparison for All Banks:
| TWL Banks | Interest Rate | Loan Amount | Processing Fees |
|---|---|---|---|
| Axis Bank | 11.00% p.a. onwards | Rs.25,001 onwards | From 0.5% of the loan amount |
| Punjab National Bank | 11.15% p.a. onwards | Contact the bank | Contact the bank |
| Union Bank of India | 12.15% p.a. onwards | Up to Rs.10 lakh | Contact the bank |
| HDFC Bank | 14.50% p.a. onwards | Contact the bank | 2.5% of the loan amount |
| State Bank of India | 13.00% p.a. onwards | Rs.20,000 to Rs.25 lakh | 2.00% of the loan amount + GST (minimum of Rs.1,000) |
| Jana Small Finance Bank | Contact the bank | Up to Rs.3.50 lakh | Up to 5% |
| Ujjivan Small Finance Bank | 20.00% p.a. onwards | Up to Rs.2.75 lakh | 2.5% of the loan amount plus GST |
| Suryoday Small Finance Bank | 18.00% p.a. onwards | Contact the bank | Up to 5% plus GST |
| ESAF Small Finance Bank | Contact the bank | Up to Rs.10 lakh | 3% plus GST |
| AU Small Finance Bank | Up to 28.00% p.a. | Contact the bank | Up to 4% of the loan amount |
Here’s a comparison of some of the top car loan schemes available in 2024, highlighting their key features and starting interest rates:
| Bank | Features and Benefits |
|---|---|
| State Bank of India |
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| HDFC Bank |
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| Punjab National Bank |
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| Union Bank of India |
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| Axis Bank |
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| Jana Small Finance Bank |
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| Ujjivan Small Finance Bank |
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| Suryoday Small Finance Bank |
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| ESAF Small Finance Bank |
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| AU Small Finance Bank |
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Lenders have specific eligibility criteria that they require you to meet before processing your application. These criteria can differ between lenders, but some common requirements include:
Note: These criteria may be different for different lenders. Check with the lender of your choice before applying.
| Requirements | Salaried Individuals | Self-employed individuals |
|---|---|---|
| Age |
|
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| 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 |
Every lender necessitates the submission of specific documents when you apply for a loan. Below are some of the commonly required documents:
Note: Document requirements can vary between lenders. Verify with your lender for the exact documents they need you to provide.
| 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 |
Applying for a loan to purchase the bike you’ve always wanted offers several benefits, including:
The Equated Monthly Installments (EMIs) that you will pay will depend on a few key factors.
The higher the loan amount, the higher your EMI will be. Similarly, the shorter the loan tenure the higher the EMI.
To calculate the EMI on your car loan, you can use the formula:
EMI=P×R×(1+R)N(1+R)N−1\text{EMI} = \frac{P \times R \times (1+R)^N}{(1+R)^N – 1}
where:
Manual calculations can be error-prone, complex, and time-consuming, so using an online personal loan EMI calculator is preferable. This calculator requires only a few basic details such as the interest rate, loan amount, and loan tenure.
Once these details are entered, the EMI amount is calculated instantly. Additionally, the calculator provides the total interest amount and an amortization schedule for easy reference.
Some loan applicants have faced rejection from lenders, which is both disheartening and detrimental to their credit scores.
To help you apply successfully for a two-wheeler loan, we’ve compiled a list of tips:
Determine the Exact Loan Amount: Assess your needs and calculate precisely how much money you require to purchase your desired bike. Avoid applying for more than necessary.
Check Your Eligibility and Compare Options: Once you know the amount you need, review all loan options you’re eligible for. Only apply for loans you qualify for to avoid automatic rejection. Ensure you meet all eligibility criteria for a two-wheeler loan.
Check Your Credit Score: Your credit score significantly impacts loan approval. Applications with low credit scores are often rejected. If your credit history is poor, work on improving it before applying.
Get a Guarantor or Co-Applicant: If your credit score doesn’t meet the lender’s requirements, consider having a guarantor or co-applicant with good credit. This can improve your chances of loan approval.
Fill Out Your Loan Application Properly: Ensure your application is complete and accurate with all required details. Incomplete or incorrect applications may be rejected.
Submit All Necessary Documents: When submitting your loan application, include all required documents. Missing paperwork can lead to application rejection.
Try Applying with Your Existing Lender: If you have a good relationship with a bank, consider applying with them. Your good standing may help you secure a loan even if you don’t meet all their criteria.
By following these tips, you can enhance your chances of successfully obtaining a two-wheeler loan.
Now that you know how to successfully apply for a motorbike loan, let’s explore some crucial points to keep in mind during the application process. These tips can help you find the right loan and avoid unnecessary costs.
The first step before applying for a motorbike loan is thorough research. Compare all the options offered by various lenders, including interest rates, processing fees, repayment options, and other loan terms. This will help you identify the best and most affordable loan option.
The tenure of your loan affects your monthly repayments. Ensure you can comfortably afford your EMI. A shorter tenure will enable you to repay the loan faster, but it will result in higher EMIs. Choose a tenure that balances your monthly budget without causing financial strain.
The interest rate determines the overall cost of your loan and impacts your EMI. Opting for a loan with a lower interest rate can help keep your EMIs manageable and reduce the total cost of the loan.
Some lenders offer both floating and fixed interest rates. Floating rates vary with market changes, while fixed rates remain constant. Although floating rates are usually lower, consider which option suits your financial situation best.
When comparing loan options, also compare the respective EMIs. Select a loan with an affordable EMI and a convenient repayment period.
If you plan to prepay or foreclose your two-wheeler loan, inquire about the associated fees. Some lenders may charge for this service, while others may not. Prepaying your loan can save you on interest costs, so understand any potential charges beforehand.
Carefully read the loan offer document, including all terms and conditions, before signing. The fine print may reveal hidden charges and fees not mentioned elsewhere. Knowing these terms can help you avoid heavy penalties.
By following these guidelines, you can secure a motorbike loan that best fits your needs and financial capabilities.
Let’s now look at the dos 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 |
In this section, we will explore how to improve your chances of getting your loan approved. Loan requirements can vary from one lender to another.
If you find it challenging to secure the loan you need, consider these suggestions:
Lenders closely examine your credit score when evaluating your loan application. A high score significantly increases your chances of approval. Regularly check your credit report for errors and take corrective actions to improve your credit.
Your debt-to-income ratio compares your current debt to your income, showing how much of your monthly income goes toward paying off loans and bills. A lower ratio improves your loan approval chances. Consider paying off some debts before applying for a new loan.
If you have a poor credit score, a co-applicant or guarantor can strengthen your loan application. A co-applicant shares the loan responsibility, and a guarantor promises to repay if you default. Both can help improve your chances of approval.
Applying for multiple loans simultaneously can signal to lenders that you might not commit to their loan offer, leading to rejection. Multiple rejections can negatively impact your credit score. Apply for one loan at a time to avoid this issue.
By following these tips, you can enhance your chances of securing the loan you need.
The answer depends on the lender. Most lenders offer loans covering 80% to 90% of the vehicle’s value, requiring you to cover the rest. However, some lenders provide 100% financing, which may come with additional terms and conditions.
Banks sometimes offer a choice between fixed and floating interest rates. A fixed rate remains constant, while a floating rate fluctuates with market changes. Floating rates are generally lower, making them a preferred choice for many borrowers.
Prepayment involves paying one or more EMIs before their due dates. This reduces the outstanding principal and, consequently, the interest cost. Prepaying your loan can save you money over the loan term.
No, you don’t need to offer additional collateral. The vehicle itself acts as collateral until the loan is fully repaid, a process known as hypothecation.
Failure to pay EMIs on time may lead to the bank repossessing your vehicle. Since your bike or scooter is hypothecated, the bank can confiscate it to recover their losses.
Yes, students can get loans by having a co-applicant, such as a parent or close relative, guarantee the loan. However, not all lenders offer loans to students, so it’s essential to check with individual lenders.
Yes, many lenders offer the convenience of applying for a two-wheeler loan online.
Yes, most lenders allow preclosure of two-wheeler loans, though a preclosure fee may apply.
EMIs can be paid via Electronic Clearing Service (ECS) and Post-Dated Cheques (PDCs).
Yes, salaried employees typically need to provide pay slips when applying for a two-wheeler loan.
Yes, bank statements are usually required when applying for a two-wheeler loan.
Yes, many banks charge a processing fee for two-wheeler loans.
Yes, some banks may charge a documentation fee when you take out a bike loan.
Yes, the State Bank of India (SBI) offers two-wheeler loans for superbikes.
It typically takes up to seven days for the loan amount to be disbursed.
Yes, most lenders offer the option to download your two-wheeler loan statement online.
