Two Wheeler Loan
Last Updated : Jan. 10, 2019, 4:05 p.m.
Having a two-wheeler is still a dream of many individuals in India. Family responsibilities and other expenses obstruct an individual to buy a two-wheeler in cash. Therefore, many financial institutions have taken an initiative to give loans on two-wheelers so that you can fulfill your dreams. If you are willing to buy a two-wheeler and don’t have ample funds then you can apply for the Two Wheeler Loan from any institution we are going to tell you below. You will just have to make the down payment that will be around 10%to 15% of the bike or two-wheeler’s cost and bring that vehicle to your home. On the other hand, some financial institutions give 100% loans of the on-road price of bikes. Let’s have a look at Two Wheeler bike or Bike loan schemes in this article.
Top Banks Two Wheeler Bike Loan Interest Rates in India April 2024
| Banks | Interest Rate (in p.a.) | Tenure | Features and Benefits |
|---|---|---|---|
| Bajaj Auto Finance | Up to 36% per annum (excluding the Advance EMI scheme and certain agriculture-based schemes) | 3 - 60 months |
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| ICICI Bank | 10.25% to 26.10% per annum | Up to 36 Months |
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| HDFC Bank | 14.5% onwards per annum | 12 Months to 48 Months |
|
| SBI | 8.50% per annum Onwards | Up to 60 Months |
|
| Axis Bank | 15.50% to 25.00% per annum | 12 Months to 48 Months |
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| Tata Capital | 8.99% onwards per annum | 6 Months to 60 Months |
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| IDFC First Bank | 9.99% to 18.99% per annum | 6 Months to 48 Months |
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| Bank of Baroda | 13.75% per annum Onwards | Up to 60 Months |
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| Muthoot Capital | 0.99% onwards per annum | Up to 48 Months |
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| Hero Fincorp | 14.00% onwards per annum | Up to 48 Months |
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| SMFG Indiacredit | 16% to 30% per annum | Flexible Tenure |
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| Home Credit | Starts from 19.99% per annum onwards | Up to 36 Months |
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| Bandhan Bank | 16.50% to 22.50% per annum | Up to 48 Months |
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| AU Bank | Up to 28% per annum | 12 Months to 60 Months |
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| Kotak Mahindra Bank | As Per Bank’s Norm | 12 Months to 48 Months |
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| YES BANK | As per Bank’s Norm | Up to 60 Months |
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| IndusInd Bank | As Per Bank’s Norm | 12 Months to 36 Months |
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| TVS Credit | Affordable Rate of Interest | 12 Months to 60 Months |
|
Two Wheeler Bike Loan Eligibility
Now, eligibility is something that plays a crucial role in your overall loan journey. Though different banks and institutions have different eligibility criteria that you need to be aware of while applying for a 2 wheeler loan. So, read the post further to know your bike loan eligibility.
- An applicant should be at least 18 years old (at the time of application) and less than or equal to 65 years (at the end of the loan maturity).
- Both Salaried, as well as self-employed individuals, are eligible.
- He/She should be residing in the city for at least 1 year.
- The borrower should be working for at least one year.
- You should have a minimum Cibil Score of 750 and above.
- The applicant should have a landline number either at the residence or at the office.
- The individual should have a regular source of income with a good credit score.
Documents Required for Instant Bike Loan
When it comes to availing a loan, you should always be ready with documents so as to avoid the last-minute hassle. In order to know the list of documents needed, kindly read the post below.
Salaried Individuals Documents
- Identity Proof Documents :- PAN Card, Aadhar Card, Voter I.D. Card, Passport, Driving License. (Any One Document)
- Address Proof Documents :- Ration Card, Electricity Bill, Telephone Bill, Driving License, Passport, Voter I.D. Card, Last 2 Months Bank Statement. (Any One Document)
- Income Proof Documents :- Form 16, Latest Salary Slips, Income Tax Return Documents. (Any One Document)
- Age Proof Documents :- Pass Certificate of 10th Standard, Passport, Birth Certificate, Voter I.D. Card. (Any One Document)
Self-Employed and Professionals Documents
- Identity Proof Documents :- PAN Card, Aadhar Card, Voter I.D. Card, Passport, Driving License. (Any One Document)
- Address Proof Documents :- Ration Card, Electricity Bill, Telephone Bill, Driving License, Passport, Voter I.D. Card, Last 2 Months Bank Statement. (Any One Document)
- Income Proof Documents :- Income Tax Documents with Computed Income, Audited Financial Document, Business Continuity Proof, PAN Card (Any One Document)
- Age Proof Documents :- Pass Certificate of 10th Standard, Passport, Birth Certificate, Voter I.D. Card. (Any One Document)
EMIs on Two Wheeler Loan
So, now that you have decided to apply for Two Wheeler Bike Loan, it is also important for you to know the EMIs of the same. What is the exact amount of monthly instalment you need to pay to a lender each month? Here you can see the EMI at a bike loan of INR 50,000, INR 1 Lac, INR 1.5 Lacs, INR 2 Lacs, and INR 2.5 Lacs at an interest rate of 11% and 18% for 24 Months and 48 Months.
Below is a table showing EMIs, Interest Outgo and Total Amount Payable on a loan.
| Loan Amount (in ₹) | ROI 11% (24 Months EMI) | ROI 11% (48 Months EMI) | ROI 18% (24 Months EMI) | ROI 18% (48 Months EMI) |
|---|---|---|---|---|
| 50,000 | INR 2,330 p.m. | INR 1,292 p.m | INR 2,496 p.m. | INR 1,469 p.m. |
| 1,00,000 | INR 4,661 p.m. | INR 2,585 p.m. | INR 4,992 p.m. | INR 2,937 p.m. |
| 1,50,000 | INR 6,991 p.m | INR 3,877 p.m | INR 7,489 p.m. | INR 4,406 p.m |
| 2,00,000 | INR 9,322 p.m. | INR 5,169 p.m. | INR 9,985 p.m. | INR 5,875 p.m |
| 2,50,000 | INR 11,652 p.m. | INR 6,461 p.m. | INR 12,481 p.m | INR 7,344 p.m. |
Apply Instantly for Two Wheeler Loan
If you are willing to buy a bike, scooter, or any other two-wheeler through finance then you can apply for the loan by filling up the form given above. You will just have to give your basic details like your employment status, name, Date of Birth, and some other details, and then our representative will get in touch with you. After the digital verification and document submissions, your two-wheeler loan will get disbursed by the respective lending institution.
Credit Card vs Two Wheeler Loan
A lot of people in India are in a dilemma about whether to buy a two-wheeler through a credit card or through a loan. So, you can buy a two-wheeler through a credit card if the on-road price of that 2 wheeler is between INR 40000 to INR 1 lac because people get such an average limit on their credit cards. But when you are buying a bike or scooter whose on-road price is above INR 1 lac. Then a few individuals have such a limit on their credit card. In such a situation, the bike loan or the scooter loan will be the best option for you. You will get a competitive rate of interest and an easy loan disbursal.
Benefits of Two Wheeler Loan
- Affordable Financing: Two Wheeler Loans often come with competitive interest rates and flexible repayment options, making them an affordable means to purchase a motorcycle or scooter.
- Easy Accessibility: These loans are readily available from various financial institutions, including banks and non-banking financial companies (NBFCs), making them easily accessible to individuals looking to buy a two-wheeler.
- Minimal Documentation: Typically, the documentation required for a Two Wheeler Loan is minimal, streamlining the application process and making it convenient for borrowers.
- Quick Approval: Many lenders offer quick approval processes for Two Wheeler Loans, allowing borrowers to get their loan sanctioned swiftly and purchase their desired vehicle without delay.
- Flexible Repayment Tenure: Borrowers can choose from a range of repayment tenure options, enabling them to select a tenure that suits their financial situation and preferences.
- No Need for Collateral: In most cases, Two Wheeler Loans are unsecured, meaning borrowers don't need to pledge any collateral or security against the loan amount.
- Improve Credit Score: Timely repayment of the Two Wheeler Loan EMIs can help borrowers build or improve their credit score, which can be beneficial for future credit applications.
- Ownership: Unlike renting or leasing, taking a Two Wheeler Loan allows individuals to own the vehicle outright, providing a sense of ownership and freedom.
- Convenience: Owning a two-wheeler can offer convenience in terms of commuting, especially in congested urban areas, allowing borrowers to save time and money on transportation.
- Potential Discounts and Offers: Some lenders may offer special discounts, promotions, or bundled insurance packages along with the Two Wheeler Loan, providing additional value to the borrowers.
Factors that Affect Interest Rates for a Two Wheeler Loan
- Credit Score: A borrower's credit score plays a significant role in determining the interest rate offered for a Two Wheeler Loan. A higher credit score typically results in lower interest rates, reflecting the borrower's creditworthiness.
- Loan Amount and Tenure: The loan amount and repayment tenure chosen by the borrower can influence the interest rate. In general, higher loan amounts or longer tenures may attract higher interest rates.
- Market Conditions: Interest rates for Two-Wheeler Loans are also influenced by prevailing market conditions, including changes in the economy, inflation rates, and monetary policy set by the RBI.
- Lender's Policies: Each financial institution may have its own lending policies and risk assessment criteria, which can impact the interest rates offered to borrowers. Lenders may consider factors such as income stability, employment status, and existing financial obligations.
- Type of Two-Wheeler: The kind of two-wheeler being financed can affect the interest rate. Premium or high-end vehicles may come with different interest rates compared to standard models.
- Down Payment: The size of the down payment made by the borrower can influence the interest rate. A larger down payment may result in a lower loan amount and, consequently, a lower interest rate.
- Relationship with the Lender: Existing customers of a bank or financial institution may be eligible for preferential interest rates or discounts on Two Wheeler Loans based on their relationship and banking history with the lender.
- Market Competition: Competition among lenders in the market can lead to competitive interest rates as institutions vie for borrowers' business. Borrowers can benefit from comparing rates offered by different lenders to secure the most favourable terms.
Tips for an Effective Two Wheeler Loan Application
A few loan applicants have had their applications turned down by lenders. This is an unpleasant sensation, and it is detrimental to your credit score.
We have compiled a list of suggestions to help you successfully apply for a Two Wheeler Loan. These include the following:
- Check and Improve Credit Score: Before applying for a Two Wheeler Loan, review your credit report and score. A higher credit score can help you secure better interest rates. Take steps to improve your credit score if needed.
- Research Lenders: Explore multiple lenders, including banks, credit unions, and online lenders, to find the best loan terms and interest rates. Compare factors such as interest rates, loan terms, and fees to make an informed decision.
- Determine Loan Amount: Calculate the total cost of the two-wheeler, including taxes, registration fees, and insurance. Then, decide on a loan amount that comfortably fits your budget and repayment capacity.
- Prepare Documentation: Gather all necessary documents, such as identification proof, address proof, income proof, and vehicle details, before applying for the loan. Having all required documentation ready can expedite the application process.
- Consider Down Payment: While some lenders offer 100% financing, making a down payment can reduce the loan amount and lower your monthly expenses. Evaluate your budget to determine an appropriate down payment amount.
- Choose the Right Loan Term: Select a loan term that aligns with your financial goals and budget. Shorter loan terms may result in higher monthly payments but lower overall interest costs. In comparison, longer terms offer lower monthly payments but higher interest expenses over time.
- Review Loan Terms Carefully: Thoroughly review the loan's terms and conditions, including interest rates, fees, prepayment penalties, and repayment schedule. Understand all costs associated with the loan before signing the agreement.
- Avoid Multiple Applications: Limit the number of loan applications you submit to avoid negatively impacting your credit score. Instead, focus on applying to lenders that offer favourable terms and are likely to approve your application.
- Be Honest and Accurate: Provide accurate information on your loan application and avoid misrepresenting your financial situation. Lenders verify the information provided, and discrepancies can lead to rejection or complications during the approval process.
Points to Remember While Applying for a Two Wheeler Loan
Now that you have learned how to successfully apply for a motorcycle loan let us look at what you should keep in mind when applying. These tips can assist you in finding the right loan and avoiding paying more than you should.
- Loan Amount and Affordability: Calculate the loan amount based on your budget and repayment capacity. Ensure that the monthly loan payments fit comfortably within your financial plan to avoid straining your finances.
- Interest Rates and Fees: Pay close attention to the interest rates offered by lenders and any additional fees associated with the loan, such as processing fees, prepayment penalties, and late payment charges. Compare rates and fees from multiple lenders to find the most cost-effective option.
- Loan Term and Repayment Schedule: Choose a loan term that suits your financial goals and preferences. Consider factors such as monthly payment amounts, total interest costs, and the length of time you plan to keep the vehicle when deciding on the loan term.
- Credit Score and Credit History: Understand the importance of your credit score in determining loan eligibility and interest rates. Review your credit report for accuracy and take steps to improve your score, if necessary, before applying for the loan.
- Documentation Requirements: Familiarize yourself with the documentation required for the loan application process, such as identification proof, address proof, income proof, and vehicle details. Ensure that you have all the necessary documents ready to expedite the application process.
- Down Payment Considerations: Evaluate your ability to make a down payment on the loan. While some lenders offer 100% financing, making a down payment can reduce the loan amount and lower your interest rates and monthly payments.
- Loan Pre-approval: Consider obtaining pre-approval for the loan before shopping for a two-wheeler. Pre-approval can give you a better understanding of your budget and negotiating power when selecting a vehicle.
- Loan Repayment Options: Explore the repayment options available with the lender, such as automatic payments, online payment portals, and flexible repayment schedules. Please choose the option that best fits your preferences and makes it easier to manage your loan payments.
- Loan Terms and Conditions: Before signing, read and understand all the terms and conditions of the loan agreement. Pay attention to clauses regarding interest rate adjustments, late payment policies, and loan default consequences.
- Seeking Assistance: If you have any questions or concerns about the loan application process or loan terms, don't hesitate to seek assistance from the lender's customer service team or a financial advisor. Clarifying any doubts beforehand can prevent misunderstandings or complications later on.
I have a Low CIBIL Credit Score; How can I get a Two Wheeler Loan?
There are a few different ways to obtain a Two Wheeler Loan if your CIBIL credit score is low:
- Improve Your Credit Score: Before applying for a loan, work on improving your credit score. Pay off existing debts, clear any outstanding dues, and make timely payments on your bills and loans. Over time, responsible financial behaviour can help raise your credit score.
- Apply with Non-Banking Financial Companies (NBFCs): Some NBFCs may be more lenient in their credit score requirements compared to traditional banks. Consider applying to NBFCs that specialize in lending to individuals with lower credit scores.
- Offer a Higher Down Payment: Increasing your down payment amount can mitigate the lender's risk and improve your chances of loan approval. A larger down payment reduces the loan amount, making it less risky for the lender to extend credit.
- Provide Collateral or Guarantor: Offering collateral, such as a valuable asset or property, as security for the loan can reassure lenders and increase your chances of approval. Alternatively, having a co-signer or guarantor with a good credit score can strengthen your loan application.
- Opt for a Shorter Loan Term: Choosing a shorter loan term may make you appear as a less risky borrower to lenders. While shorter loan terms result in higher monthly payments, they may increase your chances of loan approval despite a low credit score.
- Explore Specialized Loan Programs: Some lenders offer specialized loan programs designed for individuals with poor credit histories. These programs may have different eligibility criteria and terms tailored to accommodate borrowers with lower credit scores.
- Provide Additional Documentation: If your low credit score is due to extenuating circumstances, such as medical emergencies or temporary financial setbacks, provide supporting documentation to explain the situation to lenders. Demonstrating a positive change in your financial circumstances may increase your chances of loan approval.
- Seek Professional Advice: Consult with a financial advisor or credit counsellor to explore your options and develop a strategy for improving your credit score and securing a Two Wheeler Loan. They can provide personalized guidance based on your specific financial situation and goals.
The Right and Wrong Ways to Apply for a Two Wheeler Loan
This table highlights the importance of approaching the Two Wheeler Loan application process with careful consideration and responsible financial planning.
| Right Ways | Wrong Ways |
|---|---|
| Check and improve your credit score before applying | Applying for a loan without checking your credit score |
| Research and compare loan offers from multiple lenders | Applying with only one lender without exploring other options |
| Determine your budget and loan amount beforehand | Applying for a loan amount beyond your repayment capacity |
| Prepare all necessary documentation in advance | Submitting incomplete or inaccurate documentation |
| Consider making a down payment to reduce the loan amount | Applying for 100% financing without any down payment |
| Understand loan terms and conditions before siging | Signing the loan agreement without reading or understanding the terms |
| Applying for pre-approved to know your loan eligibility upfront | Applying for a loan without knowing your eligibility or loan terms |
| Seek assistance from financial advisors if needed | Making uninformed decisions without seeking professional advice |
How to Apply for a Two Wheeler Loan?
By following these steps, you can navigate the process of applying for a two-wheeler loan efficiently and effectively, ensuring a smooth and hassle-free experience.
- Complete the loan application form provided by the chosen lender. Provide accurate information and ensure all fields are filled correctly.
- Attach the required documents along with the loan application form. Ensure that all documents are complete and up-to-date to avoid processing delays.
- After submitting the application and documents, wait for the lender to review and process your loan application. This may take several days, depending on the lender's processing time.
- Once your loan application is approved, carefully review the lender's terms and conditions. Pay attention to interest rates, fees, repayment schedules, and any other relevant details.
- Sign the loan agreement document to formalize the loan transaction. Before signing, make sure you understand and agree to all terms outlined in the agreement.
After signing the agreement, the lender will disburse the loan amount to the seller or dealer of the two-wheeler. You can then proceed to purchase the vehicle.
Two Wheeler Loan FAQs
1. How can I Check my two-wheeler loan status?
You can check the status of your two-wheeler loan through the official website of the lending institution from where you have borrowed the loan. You will have to provide the loan application number and check the status of your 2 wheeler loan. On the other hand, you can get in touch with the representative of the respective lending institution or call on their toll-free numbers to check the status.
2. Can I get a 100% bike loan?
Yes, there are a lot of banking and non-banking institutions that grant bike loans and scooter loans up to 100% of the on-road price of the 2 wheeler. You will have to make zero down payment and apply for the 100% bike loan from that institution.
3. How can I get a Scooty loan?
You can apply for the scooty loan through the form given above. You will have to fill out that form and the loan representative will call you and discuss the loan. After the document verification and authentication, you will get a scooty loan from the lending institution.
4. What is the minimum down payment for a bike?
There are many lending institutions that give you 100% loans on two-wheelers so you will have to make zero down payment for that two-wheeler. But some institutions ask for a minimum down payment for a two-wheeler loan and it can be 5% to 20% of the on-road price of the 2 wheeler.
5. What are the minimum and maximum tenure for two-wheeler loans?
The minimum tenure for a two-wheeler loan can be 6 months and the maximum tenure for the same loan can be up to 60 years.
6. Can we buy a bullet on EMI?
Yes, you can buy a bullet on EMI but you must have a stable income to apply for a loan and must have supporting documents.
7. What CIBIL score is required for a Two wheeler loan?
The minimum Cibil score required depends on the bank or NBFCs financing the loan.
8. Can a student apply for a Bike Loan?
Yes, a student can apply for a Bike Loan but they will need a co-borrower and has a minimum age of 18 years with an authentic driving license.
9. What to do is Bank Rejects my Bike loan application?
If the bank rejects your Bike Loan Application then you must first check the reason for rejection. The bank always mentions the reason for rejection in the application. Rectify the reason and then apply again for the loan and now it might get disbursed. Some of the possible reasons for bike loan rejections are-
– Low Income
– Low Cibil Score
– Invalid Documents
– Too Much Debt
– Signature Mismatch
10. What is ex-showroom & on-road price?
The ex-showroom price of a 2 wheeler is the cost incurred in manufacturing the two-wheeler and it doesn’t include Insurance Charges and RTO Charges. On the other hand, the on-road price of a two-wheeler includes the cost of 2 wheeler, Insurance Charges, and RTO charges. If you add any external accessories then the on-road price will also increase.