A two-wheeler is the first choice for many Indian households when it comes to buying their first vehicle. Two-wheelers are popular in big and small cities. Motorbikes are considered one of the cheapest and most reliable vehicles for travelling short distances, and they are popular among all age groups.
If you plan to buy a two-wheeler, you can either self-fund it or take a two-wheeler loan. Almost all banks offer two-wheeler loans to the existing and new customers. A two-wheeler loan helps you buy a motorcycle or a scooter.
Before applying for a two-wheeler loan, you must first perform due diligence on the vehicle and choose your options. Once you do that, you need to check the vehicle’s price and see if that fits your budget. You can check multiple vehicles, compare their price, and see what suits your requirements in terms of price, mileage, look, and feel of the vehicle.
Then you need to check the banks that fulfil your eligibility criteria and are ready to provide you with the necessary fund to buy the vehicle of your choice. You can fill out the loan application form through the bank’s mobile app or website. One can also visit the bank’s branch and apply for a two-wheeler loan.
Make sure you do your research well. Compare all the options such as interest rates, processing fees, repayment options, and other loan terms that lenders offer you. It will help you choose the best product as per your requirements. Your interest rate decides the overall cost of your loan. It also has an impact on your EMI. Choosing a loan with a low-interest rate can help keep your EMIs low and make your loan cheaper, according to BankBazaar.
The tenure of your loan is another important factor as it decides how much you must repay each month. Make sure you can afford your EMI. It means you need to be wise about choosing your tenure. A shorter tenure will help repay the loan faster. But your EMIs will be high. Therefore, choose how much EMI you can afford to pay every month without facing a financial crunch.
When you compare your loan options, make sure you compare the respective EMIs. Choose a loan that gives you an affordable EMI with a convenient repayment period. if you plan on prepaying or foreclosing your two-wheeler loan at any point, find out the charges for the same. Some lenders may charge you a fee for this, while others may not. Prepaying your loan can help you save interest costs.
Read your loan offer document carefully before you sign it. The fine print may reveal hidden charges. Knowing these charges helps you avoid paying heavy penalties.
Most lenders will offer you a loan for only 80% to 90% of the vehicle’s value. You will have to pay the rest of the money from your pocket. Some lenders offer 100% financing with additional terms and conditions.
Remember that if you don’t pay the EMIs on time, the bank may repossess your vehicle. Since your bike or scooter is hypothecated, the bank has every right to confiscate your vehicle to make good the losses they suffer.
If you want to take a two-wheeler loan, look at the table below that lists prominent banks that are presently offering some of the lowest interest rates on two-wheeler loans. This table only includes the lowest advertised rates for each bank listed. The applicable interest rate may differ and depend on your age, income, credit score and eligibility requirements of your lender. The table below also includes indicative EMIs for a two-wheeler loan amounting to Rs 1 lakh taken for three years for each bank.
Interest Rates & EMI on Rs 1 Lakh Two-Wheeler Loan for 3-Year Tenure
Compiled by BankBazaar.com
Note: Interest rate on Two-Wheeler Vehicle Loan for all listed (BSE) Public & Pvt Banks considered for data compilation (except foreign and small finance banks); Banks for which data is not available on their website, are not considered. Data collected from respective bank’s website as on 12 Apr 2022. Banks are listed in ascending order on the basis of interest rate i.e. bank offering lowest interest rate on two wheeler loan is placed at top and highest at the bottom. Lowest interest rate offered by the banks on two-wheeler loan is shown in the table, irrespective of loan amount and tenure. EMI is calculated on the basis of Interest rate mentioned in the table for Rs 1 Lac Loan with tenure of 3 years (processing and other charges are assumed to be zero for EMI calculation); Interest mentioned in the table is indicative and it may vary depending on bank’s t&c.^Rack Interest Rate; ^^Min APR during Q3 FY 2021-22.