As simple as the name - a bike or two-wheeler loan is a loan taken to buy a bike. You can get bike loans from all top banks and NBFCs. It is a fairly easy to get loan as it is secured, the purchased bike works as the collateral.
Let’s learn everything about a bike loan, and also the steps to apply for one.
You can take a bike loan to purchase a first-hand as well as a second-hand two-wheeler. However, here we are discussing new bike loans only.
Here are some of the salient features of a bike loan -
You can get bike loans at interest rates starting from 8.50% (IDFC First Bank). However, the actual interest rate will depend on the bike price, your credit score, income, chosen tenure, etc.
Your interest rate will also depend on the type of interest you choose - fixed or variable. The fixed ROI stays consistent throughout the tenure of the loan, while the variable ROI changes with the market conditions.
Pick a repayment schedule that fits you best. Banks offer tenures of up to 84 months (Bajaj FinServ).
The longer the tenure, lesser your EMI amount will be. But, you will end up paying more money as interest if you choose a long tenure.
Banks and NBFCs fund up to 100% of the on-road price of the bike (Axis Bank & Bajaj FinServ). ICICI Bank offers up to ₹30 Lakh as bike loan to applicants.
However, the amount will also depend on your income, creditworthiness, and the price of the bike you want to buy.
Nowadays, you can apply for any loan both online and offline. Both processes are short and easy. We will learn more about the application process in the next section.
All you need is your proof of identity, income, and residence. If you are applying online, you don’t even have to submit hard copies of your documents.
The eligibility criteria to qualify for a two-wheeler loan will vary based on the lender you choose. Here are a basic set of criteria -
Applicant must be an Indian resident
Applicant’s age should be within 21 and 65
Should have a minimum monthly income of ₹10,000 (State Bank of India), if they are salaried
Should have a minimum income of ₹1,44,000 (Axis Bank), if they are self-employed
Should have a minimum CIBIL score of 700 (Bajaj FinServ)
A proof of identity, income, and address is required to apply for a bike loan. What documents will be accepted as each proof will depend on your lender.
Usually, your Aadhaar card, PAN card, and Passport, Voters’ ID are widely accepted documents.
Loan application processes are pretty simple nowadays given the emergence of net banking and mobile apps. Actual steps will depend on your lender. Here is a general idea of how you can apply for a bike loan once you have chosen your dream two-wheeler -
STEP 1: Visit the bike loan application page on the website or app of your chosen lender. Or, visit your bank’s nearest branch and request a loan application form.
STEP 2: Choose the model of bike on the next page, and fill the online form. Or, fill the form given to you, providing all necessary details.
STEP 3: Choose the terms of your loan, like amount and tenure, if applying online.
STEP 4: Upload the required documents and submit the form. If applying offline, submit the filled form with photocopies of the required documents.
STEP 5: Wait for the approval and the loan amount disbursal.
As they are secured loans, getting bike loans is fairly easy. However, if you have a good credit history, you will be able to negotiate more and get a loan at your preferred terms.
You can also apply for a bike loan directly from the bike showroom as banks and NBFCs have their representatives at the showroom. However, doing a thorough research about interest rates and tenures of the loan between top lenders is suggested.
Never let lack of funds put a stop to your dreams. Take a bike loan and ride away!
You can get a bike loan from any top lender in the country. Rates of interest start from as low as 8.50% p.a. However, which loan is the best for you will depend on your exact needs.
Your EMI will depend on the rate of interest and the tenure of your loan. Let’s suppose you have taken a bike loan of ₹1 Lakh on 15% rate of interest for 6 months. According to the Moneyview bike loan calculator, your EMI in this case will be ₹17,403.
Yes, some banks provide you loans that cover 100% of your bike’s on-road price. However, this will depend on multiple factors like your income, bike’s price, and your creditworthiness.
HDFC two-wheeler loan interest rates start from 14.5% per annum.
Yes, you can make payments bigger than your EMI to close your bike loan early. You can either do it once or in chunks.
Was this information useful?
