Two-Wheeler Loan Interest Rates
Planning on taking a loan to buy the bike you've always wanted? Before you apply for one, take a look at the interest rates being offered by some of the top lenders in the country. The interest rates on these loans start from 8.75% p.a.
You can avail a loan to buy an electric two-wheeler from both banks and Non-Banking Financial Companies (NBFCs). These loans have the same procedure and interest rates as that of regular two-wheeler loans.
Lowest Two-Wheeler Loan Interest Rates
The following table helps you compare the interest rates and processing fees offered by leading banks in India along with the relevant tenures.
TWL Bank | Interest Rate | Loan Amount | Processing Fee |
8.75% p.a. onwards | Up to Rs.50 lakh | Contact the bank | |
8.50% p.a. onwards | Contact the bank | 5% of the loan amount | |
10.50% p.a. onwards | Contact the bank | Up to 4.00% of the loan amount | |
10.50% p.a. onwards | Rs.25,001 onwards | From 0.5% of the loan amount | |
10.75% p.a. onwards | Contact the bank | Contact the bank | |
11.45% p.a. onwards | Up to Rs.1 crore | From 1% of the loan amount (minimum of Rs.1,000) | |
Canara Bank | 10.85% p.a. onwards | Contact the bank | Nil |
9.90% p.a. onwards | Up to Rs.10 lakh | Contact the bank | |
13.15% p.a. onwards | Rs.10 lakh | 2% of the loan amount | |
11.68% p.a. onwards | Rs.5 lakh | Contact the bank | |
14.50% p.a. onwards | Contact the bank | 2.5% of the loan amount | |
12.85% p.a. onwards | Rs.50,000 to Rs.25 lakh | 2.00% of the loan amount + GST ( Maximum 10000 +GST ) | |
9.75% p.a. onwards | Up to Rs.1 lakh | 1% of the loan amount (minimum of Rs.500) | |
11.10% p.a. onwards | Contact the bank | Contact the bank | |
| Rs.25,000 to Rs.2,50,000 | 1% of the loan amount (minimum of Rs.500) | |
14.05% p.a. onwards | Up to Rs.1 lakh | 1% of the loan amount | |
9.47% p.a. onwards | Contact the bank for more information | At the discretion of the bank | |
12.50% p.a. onwards | Rs.25,000 – Rs.5 lakh | Up to 4% of the loan amount | |
SMFG India Credit | 19% p.a. onwards | Up to Rs.1.5 lakh | Up to 5% of the loan amount |
At the discretion of the bank | Contact the bank for more information | At the discretion of the bank | |
Up to 36% p.a. | Rs.10,000 – Rs.3.5 lakh | At the discretion of the bank | |
Muthoot Credit | Contact the lender | Up to Rs.3 lakh | Up to 4% of the loan amount |
Home Credit | At the discretion of the bank | Contact the bank for more information | At the discretion of the bank |
Bajaj Auto Finance | Up to 31% p.a. | Up to Rs.20 lakh | Up to 7% of the loan amount |
Factors that Affect Two-Wheeler Loan Interest Rates
Take a look at the various factors that impact the interest rate of your two-wheeler loan:
How Credit Score Affects Two-Wheeler Loan Interest Rate
This is one of the most important factors that determine your interest rate. Most lenders have a fixed rate for these loans.
But if you have a good credit score, you may be able to get a lower interest rate. On the other hand, if your credit score is bad, the lender will most likely charge you a higher interest rate.
How Income Impacts Bike Loan Interest Rate
Every lender has a particular level of income they expect you to earn per month. The higher you earn, the lower risk you have of not repaying your loan.
This usually means you will get a favourable interest rate. If you earn a lower level of income, you may be given a higher rate of interest.
Impact of Employment Type on Bike Loan Interest Rate
The place where you work or the organisation you work for may have a say in the interest rate you're given. A reputed company may mean that you have a stable job and that you're drawing a stable income. This may translate into lower interest rates.
Your Nature of Employment: Lenders may offer different interest rates depending on whether you are self-employed or salaried.
How Age Influences Two-Wheeler Loan Eligibility and Rates
Your age plays an important role in determining your interest rate. For example, if you're nearing retirement, your loan may cost you more. This is because being closer to the retirement age usually means your capacity to repay a loan will be lower.
How Relationship with Lender Affects Two-Wheeler Loan Interest Rates
If you already have an existing relationship with the loan provider, it may help you get a better rate of interest. A good relationship with a bank can get you better loan terms.
Note: These are some of the main factors that determine your interest rate. There may be others that are specific to the lender from whom you're taking a loan.
How to Calculate Bike Loan EMI Based on Interest Rate?
Your EMI will show you how much you have to repay the bank each month. The EMI depends mainly on the loan principal amount, the interest rate, and the tenure you choose.
Your processing fee and prepayment patterns will also play a role in determining your EMI.
It is always better to find out what your EMI will be before you apply for your two-wheeler loan. Comparing various loan EMIs can help you identify the cheapest and most suitable loan.
Two wheeler loan calculator is a unique repayment calculation tool that helps you find your EMI in a matter of minutes. Simply type in your loan parameters and get your EMI and loan amortisation schedule right away.
Also Check : Bike Loan Statement
Tips to Lower Your Two-Wheeler Loan Interest Rate
When you apply for a loan, your aim should be to get one with the lowest possible rate. Here are a few tips that can help you get a lower rate of interest:
- Clean Up your Credit: Since your credit score plays a vital role in determining the interest rate you're offered, look at cleaning up your credit history first. If you don't have good credit, look at ways to improve it before you apply.
- Improve your Current Debt Status: In other words, check your debt-to-income ratio. This shows you how much of your current income is going toward repaying loans and credit card bills.
- Pay off existing loans and bring down this ratio. The lower the ratio, the better your chances are of getting good rates.
- Negotiate with your Lender: Sometimes, negotiating with your lender can help you get better rates. This can help especially in situations where you don't fulfil all the eligibility criteria. For example, if you don't have sufficient income but are expecting a pay raise, offering proof of this can help you get good interest rates.
- Take a Loan from your Existing Lender: If you already have a savings account with a bank, try taking a bike loan from them. If you already have a good relationship with them, you can get better interest rates.
Important Loan Factors Beyond Interest Rates for Two-Wheeler Loans
- Processing Fee: A processing fee is a one-time charge that your lender will levy for processing your loan application. This can impact your monthly repayments.
So, even if you get a loan with a low interest rate, your processing fee will increase your costs. Choose a lender that offers you a low interest rate along with a reasonable processing fee. - Eligibility Criteria:
Each lender will have a set of eligibility criteria that you are expected to fulfil before they process your loan. Some lenders may have more stringent criteria than others.
NBFCs may have the least stringent criteria. Choose a lender whose criteria you can easily fulfil. This should help you get your loan without any hassles. - Prepayment Charges: Prepaying your loan can help you save money on interest costs. But many lenders charge a fee if you want to prepay or foreclose your loan.
Compare these charges if you plan to prepay or foreclose your loan in the future. This will help you find out if foreclosing a loan will be beneficial or not. - Other Charges: Make sure you read the loan offer document thoroughly and find out every other cost there is. This will help you avoid surprise charges in the future. Also, it can help you find the actual cost of your loan.
- Disbursal Time: This is the time the lender takes to give you the money from the time you apply for it. Find out how long various lenders take to sanction and disburse your loan. This will help if you're in a hurry to get a loan to buy your bike.
- Customer service: This is something many borrowers fail to consider when applying for a loan. A lender needs to have a good customer care service to answer your queries in the future. Not having good customer service can be extremely frustrating.
- Discounts and special offers: Keep an eye out for periodic discounts or special rates and loan conditions being offered by lenders. Many lenders tend to give customers special offers during festival seasons. Availing these offers may help you get better rates of interest, better repayment options, and other loan terms.
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FAQs on Two-Wheeler Loan Interest Rates
- What is the rate of interest for a two-wheeler loan?
The interest rate offered on two-wheeler loans differs from bank to bank. You can avail a two-wheeler loan ranging between 8.75% p.a. and 36% p.a. The most suitable for you will be based on the loan amount, repayment tenure, etc.
- What is the difference between a fixed and variable interest rate?
A fixed rate stays the same, but a variable rate can go up or down based on market changes.
- Why are fixed interest rates usually higher than variable rates?
Fixed rates are higher because they stay the same, offering more security.
- How do market changes affect variable interest rates?
Variable rates change when things like the RBI’s interest rate go up or down.
- Can my interest rate change with a variable rate loan?
Yes, your rate can go up or down based on market changes.
- Which interest rate type is better for a bike loan – fixed or variable?
It depends on your preference: a fixed rate is stable, while a variable rate may start cheaper but can change over time.
- Which interest rate type is better to minimize risk – fixed or variable?
A fixed rate is better to minimize risk.
- Do NBFCs and banks levy a processing fee when I apply for a two-wheeler loan?
Yes, NBFCs and banks may levy a processing fee when you apply for a two-wheeler loan.
- Do banks offer 100% of the on-road price of the bike as a loan?
Yes, certain banks will offer 100% of the on-road price of the bike as a loan.
- Will a fee be levied in case I preclose the two-wheeler loan?
Yes, a fee may be levied in case you preclose the two-wheeler loan.
- Will the age criteria differ for different lenders?
Yes, the age criteria that must be met may differ from lender to lender.
- Should proof of identity be submitted when I apply for a two-wheeler loan?
Yes, proof of identity must be submitted when you apply for a two-wheeler loan.
- Will the interest rate be high in case my credit score is low?
Yes, the interest rate will be high if your credit score is low.
- Do lenders provide the option to preclose the loan?
Yes, lenders will provide the option to preclose the loan.
- What is the maximum tenure of a two-wheeler loan?
Certain lenders offer a tenure of up to 5 years to repay the two-wheeler loan.
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