paisabazaar

Apply for Two Wheeler Loan

You can now apply for quick & easy two-wheeler or bike loans. Get up to 100% financing options from Bajaj Financial Services, with quick disbursals & basic eligibility checks.

Interest rates starting as low as 6%, & loan tenure ranging from 1 to 4 years.

Apply Two Wheeler Loans from HDFC Bank

Two wheeler loans are considered to be the simplest and the fastest way to buy your dream bike. It suits customers of all ages and they can purchase a two-wheeler by just paying a nominal down payment up front and the remaining amount in form of Equated Monthly Installments (EMIs).

As per the rising aspiration of youngsters in our country, two-wheeler loans are more in demand to purchase superbikes, racer bikes, and cruiser bikes. However, previously the trend of taking two-wheeler loan has always been in purchasing regular bikes and scooters.

Apply Two Wheeler Loans from HDFC Bank

Get two-wheeler loans from HDFC Bank at attractive interest rates of 10.45% onwards with the simple and hassle-free loan process. You just need to submit your occupation type, mobile number and current residence PIN code at piasabazaar.com. Further, once you select the vehicle manufacturer, model and loan amount, a code is generated that you need to provide it to the nearest dealership along with the KYC documents for verification. HDFC representative at the dealership will verify the documents. Once the documents are verified, you can ride back your dream bike.

Apply Two Wheeler Loan with ICICI Bank

ICICI Bank offers pre-approved loans for its existing customers at an interest rate of 11.57% onwards. The whole loan process offered by ICICI bank is really simple and time-saving. The applicant needs to be salaried or self-employed with a minimum per month salary of Rs. 7000. A code is generated once you enter information regarding your contact number, PIN code, two-wheeler manufacturer and model at paisabazaar.com. You just need to show the code to the dealership and drive back your vehicle.

Apply Two Wheeler Loan with Bajaj Finserv/Hero Fincorp

Bajaj Finserv and Hero Fincorp offer two-wheeler loans at an interest rate of 10.99% and 10.35% onwards respectively. Both the financial companies are bike specific, as they approve loans only on vehicles made in-house. Models made only by Bajaj and Hero will get the loan approval. Code generation process remains the same at pasiabazaar.com. However, the KYC documents will be verified by the representative of the respective bank over the phone. Once the documents are verified, the customer needs to visit the nearest dealership to get the vehicle by just showing the generated code.

Eligibility Criteria for Two-Wheeler Loan

Two-Wheeler Loan – Eligibility Criteria
OccupationSalaried and Self-employed
Age CriteriaMin. 18 years (at time of loan application) and Max. 70 years (At time of loan maturity)
Loan AmountMax. up to Rs. 25 lakh
Processing FeeMax. up to 3% of the loan amount
Residence StatusMin. 1 year at same location/area
Loan-to-Value (LTV) RatioMax. up to 98% of on-road price
Repayment TenureMax. up to 60 months
Net Monthly SalaryMin. Rs. 7000
Loan Amount DisbursalMin. 6 hours & Max. 7 working days

Two Wheeler Loan Interest Rates 2019

Two Wheeler Loan Interest Rate 2019
Banks / NBFCsInterest Rate
HDFC Bank10.45% onwards
ICICI Bank11.57% onwards
Bajaj Finserv10.99% onwards
Hero Fincorp10.35% onwards
SBI9.25% onwards
Bank of Baroda12.70% onwards
Axis Bank15.00% onwards
PNB India11.70% onwards
Union Bank of India11.60% onwards
Indiabulls Dhani11.99% onwards
United Bank of India11.25% onwards
Andhra Bank10.70% onwards
Yes BankDepends on borrower’s profile & loan amount
Indus Ind BankDepends on borrower’s profile & loan amount

Note: The mentioned interest rates, fees, and charges are subject to change and depend on the sole discretion of the bank, NBFC, and RBI. GST and service tax shall be levied extra on the mentioned fee & charges.

Documents Required for Two Wheeler Loan

If the potential borrower fulfills all the above-prescribed eligibility criteria laid down by the lending institution, he/she becomes eligible to apply for the two-wheeler loan. If the borrower is eligible for loan application the important documents which should be attached with the loan application form are required. So, let’s take a look at the important documents which should be kept handy and submitted on loan application:

Identity Proof: 2 passport sized photographs, Passport, Voter’s ID card, PAN card, Aadhaar card, Driving license, Photo credit card, Company’s ID card, etc.

Address Proof: Passport, Voter’s ID card, Telephone or Gas bill, Rental agreement, Credit card statement, LIC policy, Driving license, Property purchase documents, etc.

Income Proof: Last 3 months’ salary slips, proof of office address, ITR of last 2 years and other relevant documents, as per the profile of the applicant

Features of Two Wheeler Loan

  • Rate of interest is relatively lower, as compared to other loan products or financial instruments
  • Flexible repayment tenure from 1 year to 60 months, as per the borrower’s desired EMIs
  • Instant loan approval at the time of vehicle purchase at showroom/outlet itself
  • Lesser documents formalities, as compared to other loans
  • Multiple loan repayment options like paying cash on a monthly basis, Standing Instructions (SIs), ECS or post-dated cheques
  • Two-wheeler companies have Tie-ups with financial institutions to make it simpler and hassle-free for the customers
  • Several banks/NBFCs offer 100% finance of the cost of the vehicle into the buyer’s account with the same bank/NBFC
  • The credit score is not checked before loan sanctioning, as loans are approved on the basis of documents provided

List of Banks and NBFCs offering Two-Wheeler Loans

  • HDFC Bank
  • ICICI Bank
  • Bajaj Auto Finance
  • Hero Fincorp
  • Axis Bank
  • Yes Bank
  • Tata Capital Finance
  • SBI
  • Bank of Baroda
  • Mahindra Finance
  • Reliance Money
  • Indus Ind Bank
  • HDB Financial Services
  • Indiabulls Dhani
  • United Bank of India
  • Muthoot Capital Finance
  • PNB India
  • IDFC Bank
  • Fullerton India
  • Clix Capital
  • Union Bank of India
  • Andhra Bank
  • Syndicate Bank

Benefits of Two Wheeler Loans

Two Wheeler Loans always stand out as the most preferred means of finance for those who are buying a bike for the first time. Some of the benefits of a Two Wheeler loan are:

Quantum of Finance: Banks offer financing up to 95% of the vehicle amount as margin in case of two-wheeler loans. This gives the comfort of paying just 5% as loan down payment, which is quite affordable for any buyer. For example:  Let’s consider the average prices of a two-wheeler is approximately Rs. 60,000. So just by paying Rs. 3,000 you can own a two-wheeler.

On-the-spot Loan Sanction: Most of the lenders in this category have direct tie-ups with the dealers. One can simply walk in a showroom and buy a two-wheeler. This process saves your time and effort both.

Ease of Payment: Two-wheeler loans are smartly spread out over a longer tenure so that there is no undue financial burden on the applicant. The borrowers of two-wheeler loans get sufficient time to pay back for the two-wheeler loan. The loan tenures generally range between 12 months to 60 months. The flexibility to choose the tenure allows the borrower to plan repayment better considering their monthly budget and earning.

Lower Income Criteria: As compared to any other loan, two-wheeler loans offer greater leverage to people with lower annual income. In some cases, individual earning an annual income of Rs 40,000 can also avail a two-wheeler loan.

Flexible Tenure: Generally the tenure in two-wheeler loans is offered up to 5 years or 60 months. This ensures a lower EMI amount and it doesn’t affect the monthly budget of the buyer.

All inclusive loan amounts: The loan is offered for the overall cost of buying a two-wheeler which includes costs associated with vehicle accessories, insurance payment, and registration charges. This turns out to be a smarter deal, as the buyer is not getting finance for just the vehicle but also towards the necessary expenses.

Insurance Cover and Marginal Premiums: As per Indian Motor Act, most of the lenders do provide insurance cover for both the vehicle, as well the accidental cover for the buyer at a marginal annual premium while sanctioning the loan.

Credit score not required: While for most loans, having a strong credit score is mandatory, in two-wheeler loans there is no such compulsion. Even borrowers having no credit score can apply for two-wheeler loans with ease. Further, a two-wheeler loan can help borrowers create and build a credit history. As a result, they will be better placed for future credit/loan applications. Since the EMI is generally lower and the chances of default are less, hence a positive credit score can easily be built over the course of the loan tenure.

Offered to salaried individuals, self-employed professionals, proprietorships, self-employed businessmen, partnership firms, trusts, private and public limited companies, etc

Additional Fees & Charges

Processing Charge: The first and the primary charge is the loan processing charge which is a necessary fee payable at the time of loan application. Even if the loan is rejected, the processing charge paid on the application would be forfeited by the financial institution. The processing fee is expressed, usually, as a percentage of the loan amount sought subject to a maximum absolute limit and varies from one lender to another. The maximum processing fees charged by banks and NBFCs is 3% of the loan amount which is non-refundable.

Foreclosure Charges: Sometimes, we might or want to pay off the loan much before the due date. This prepayment of the loan is called foreclosure and might involve charges for the same. However, two-wheeler loans are simpler in this respect and might not include any foreclosure charges or have very low charges.

Late Payment Fee: If you miss any installment due date and are late in making such payments, a penalty would be charged for such late payments.

Other Charges: Various other charges might be charged depending on the lender’s practice. Some common charges include administrative charges, documentation charges, stamp duty, cheque bounce charges, loan cancellation charges, amortization schedule charges, etc.

Important aspects of a Two-wheeler Loan

Every two-wheeler loan, whether availed from a bank or NBFC, have certain aspects which are universally applicable. These aspects form the feature of every two-wheeler loan and it is mandatory that you understand these features. Here they are for your reference:

  • Margin – Margin or finance is considered to be one of the important features of a two-wheeler loan. Banks or NBFCs do not offer the total value of the bike you are intending to buy. However, specific margin is retained and the remainder is paid. You are required to know that margin is generally called the down-payment on your two-wheeler. Usually, lenders allow loans up to 95% of the actual value of the bike and 5% is the margin money. This ratio of the margin of finance might vary between different lenders.
  • Repayments – Sanctioned loan amount allowed is repayable over a specified tenure which is called as Equated Monthly Installments (EMI). These EMIs or installments are uniform throughout the repayment tenure and contain a portion of the principal and a portion of the interest rate payable on the loan.
  • Loan Tenure – To make it affordable for the borrowers, banks and NBFCs allow a repayment tenure which usually ranges from a period of 12 months to a period of 60 months or, stated simply, from one year to five years. The borrower can choose any tenure that suits his/her financial planning process.
  • Tie-ups with dealers – To facilitate the whole loan process, lenders often enter into tie-up arrangement with two-wheeler dealers and allow them to bundle the loan into the product features. It becomes easier for the customer who is buying the two-wheeler from the dealer to also avail a financing option from the same spot without having to go to a bank or other institution separately. Moreover, loans offered by dealers also come economical and customers can negotiate the rate and add other offers with the whole deal.
  • Eligibility Criteria – All financers whether they are banks or NBFCs have a pre-determined list of eligibility criteria. Borrowers who fulfill all the aspects of such a list of criteria can only avail the loan. These criterions include age limit, income, occupation, etc.
  • No Prepayment Charges – It often happens that at times when we have surplus cash we intend to settle our liabilities. However, certain loans impose a penalty charge when the loan is paid off in full before the specified tenure. In case of two-wheeler loans, this prepayment facility is available and that too free of cost by some of the lenders. One can pay-off his/her loan liability even before tenure (called foreclosure of the loan) after the regular payment of at least 6 EMIs.
  • Comprehensive Financing – The amount of loan offered not only covers the cost of the vehicle but also covers the cost of the vehicle’s insurance. It becomes beneficial for the customers who can easily opt for additional security measures and install safety mechanisms on their vehicle.

So, these were the rudimentary features of any average two-wheeler loan which you would find in all loan products available in the market today.

FAQs

Ques. 1: Can I pre-pay the outstanding loan amount in full?
Ans: Yes, you can but only after regular payment of EMIs for the initial 6 months of the availed loan. The payment accepted will only be in the form of DD/Cheque and no cash is accepted.

Ques. 2: What are the important documents required for a two-wheeler loan?
Ans: Important documents required are identity proof, address proof, residence proof, income proof, bank statement, etc.

Ques. 3: What are the minimum and maximum loan amount of two-wheeler loan?
Ans: Minimum loan amount offered is Rs. 30,000 and maximum loan amount offered is Rs. 25 lakh

Ques. 4: What is the maximum Loan-to-Value (LTV) ratio offered by financial institutions?
Ans: The maximum LTV ratio offered is 95% of the total loan amount.

Ques. 5: Do banks and NBFCs check the credit score of the applicant before loan sanctioning?
Ans: No, banks and NBFCs do not check credit score before loan sanctioning.

Ques. 6:  What is the repayment tenure of two-wheeler loan?
Ans: The repayment tenure starts from 6 months and goes up to 60 months.

Ques. 7: What is the interest rate charged on the two-wheeler loan?
Ans. The minimum interest rate charge on the two-wheeler loan is 9.25% onwards.

Ques. 8: What is the processing fee charged on the two-wheeler loan?
Ans. The processing fee charged on two-wheeler loan ranges from 1% – 3% of the loan amount.

Ques. 9: What are the pre-payment clauses?
Ans: Prepayment charges are free of cost for many banks and NBFCs. However, customers need to pay regular EMIs for the first 6 months to prepay the balance amount in the consecutive month.

Ques. 10: Can I apply for another loan from the same bank, if I am already availing a two-wheeler loan?
Ans: Yes, you can avail another loan as well.