Introduction 

We Indians have always loved two-wheelers - be it for commutes, racing, long drives or just for recreation. Sales of bikes have always been strong as compared to other vehicle segments. However, despite their popularity, two-wheelers are not always easily affordable. Some of the bike variants available in India can burn a hole in one’s pocket. This is the reason why a lot of people opt for a two-wheeler loan. 

A two-wheeler loan in India can be sourced from many lenders like banks, NBFCs, digital lending portals, etc. Due to the intense competition among the lenders, there are a lot of choices available to borrowers. Therefore, it can get difficult to choose and narrow down on a two-wheeler loan best suited to one’s requirements. Read on to find out more on which bank or lender is best for a bike loan.

Top Banks for Bike Loans in India

Bank of India – Two-Wheeler Loan

Bank of India is known to have the lowest interest rates on two-wheeler loans in the country. BOI also offers bike loans for a second-hand or used two-wheeler. Here are some of the top features of the two-wheeler loan offered by the bank: 

  • Interest Rate - 9.35%

  • Loan Tenure - Up to 5 years

  • Max Loan Amount - 75-85% of the on-road price of the vehicle

  • Eligibility (Age) - Minimum 21 years and maximum of 65 years

Jammu and Kashmir Bank - Two-Wheeler Loan

Jammu and Kashmir Bank has attractive interest rates on its two-wheeler loan but it does not sanction the loan for second-hand two-wheelers. The key features of this loan are:

  • Interest Rate - 9.95%

  • Loan Tenure - Up to 5 years

  • Max Loan Value - 75-90% of the ex-showroom price of two-wheeler

  • Eligibility - Minimum age must be 18 years (16 years for borrowers looking to buy a scooter with an engine capacity not exceeding 55cc). The borrower must have a valid license. Maximum age is 60 years for salaried individuals (65 years for all others). Minimum annual income should be Rs. 1 Lakh to borrow for vehicles not costing more than Rs. 75,000, and Rs. 2 Lakhs for bikes that cost more than Rs. 75,000.

PNB - Two-Wheeler Loan

Punjab National Bank offers a two-wheeler loan known as PNB Power Ride. This is specially designed for women borrowers. Key features of this loan are as follows:

  • Interest Rate - 10.20%

  • Loan Tenure - Up to 5 years

  • Max Loan Amount - 90% of the two-wheeler’s ex-showroom price

  • Eligibility - Minimum age should be 18 years and maximum of 65 years. Minimum monthly income should be Rs. 10,000 for males and Rs. 8,000 for females

SBI - Two-Wheeler Loan

State Bank of India offers two-wheeler loan at a slightly higher interest rate compared to other banks. However, the loan tenure is set at only 3 years while the tenure of other banks is normally 5 years. Some of the main features of SBI two-wheeler loan are:

  • Interest Rate - 12.65%

  • Loan Tenure - Up to 3 years

  • Max Loan Amount - 85% of the two-wheeler’s on-road price

  • Eligibility – Age must be minimum 21 years and maximum of 65 years. The minimum annual income of the borrower should be Rs. 75,000 (for regular scooters or motorbikes), and Rs. 60,000 (for battery operated bikes or mopeds)

United Bank of India - Two-Wheeler Loan

United Bank of India gives loan for the purchase of new bikes or scooters and not second-hand variants. Main features of the bike loan offered by this bank are:

  • Interest Rate - 11.00%

  • Loan Tenure - Up to 5 years

  • Max Loan Amount - 75-90% of the two-wheeler’s ex-showroom price

  • Eligibility - Minimum age must be 18 years and maximum age should be 65 years. Minimum monthly income of the Rs. 1.80 Lakh for salaried individuals and Rs. 2 Lakhs annual income for self-employed individuals. Rs. 2 Lakhs annual income is required for individuals engaged in an agricultural activity or allied services.

How to take a bike loan at low interest rates?

If you apply for a two-wheeler loan, your goal should be to borrow it at the lowest possible interest rate. Here are some helpful tips to get a bike loan at attractive interest rates:

  • Good Credit Score: Your credit score plays an important role in fetching a competitive interest rate. Hence, you must consider looking at your credit history and take the right steps to improve it. In case your credit score is poor, you can work on improving it before applying for a fresh bike loan.

  • Reducing your Overall Debts: Before you opt for a bike loan, make sure to check your DTI (debt-to-income) ratio.  This is a measure of how much debts you have in relation to your overall income. DTI helps you gauge how much of your current income is being used for repayment of loans and credit card bills. You must begin paying off existing loans to lower this ratio as much as possible. The smaller the DTI ratio, the better are your chances of getting a bike loan at lower interest rates. 

  • Negotiate: At times, you must negotiate with your lender to get better interest rates. This can prove to be helpful especially in case you are not able to fulfil all the eligibility criteria. For instance, if your income does not match up to the eligibility criteria, but you are expecting a pay hike, you can furnish proof of the same and get a bargain in your interest rate.

  • Borrow from a lender with whom you have a previous relationship: If you hold a savings account with a bank, you can get a two-wheeler loan from the same. You can get a good bargain but it depends on the kind of relationship you have been able to maintain with the bank. 

End Note

The main purpose of comparing interest rates of two-wheeler loans is to know the overall cost of the loan and also to get the best possible interest rates. It will allow you to calculate your repayment options including EMI, tenure, etc. Once you have listed your options, you can compare and choose the best choice. Other parameters like processing fee, repayment tenure, must also be considered while finding a loan that is best suited to your requirement.