Two-Wheeler Loans: Get on the Road with Financial Flexibility!

In India, owning a vehicle, whether it’s a car or a two-wheeler, is a common aspiration. However, not everyone has the immediate financial means to purchase a bike outright. Therefore, taking a loan has become the most viable solution. Fortunately, obtaining a bike loan has become increasingly accessible over time. Depending on your credit history, you can secure loans for up to 85 percent of the bike’s cost, and in some cases, even up to 90-95 percent. This facilitates the process of buying a bike, allowing you to repay the loan through affordable EMIs (equated monthly installments). Nevertheless, selecting the most suitable bike loan requires thorough research and careful consideration to meet your specific requirements. 

   Subas Tiwari                      

A two-wheeler loan is a type of loan specifically designed to finance the purchase of a two-wheeler vehicle, such as a motorcycle, scooter, or moped. It is a popular financing option for individuals who want to own a two-wheeler but may not have the immediate funds to purchase one outright.

If you are planning to finance your bike purchase through a bank loan, it is crucial to be aware of the required documents beforehand. Failing to provide the necessary identification and safety-related paperwork can delay the loan approval process, resulting in wasted time. Thus, it is essential to gather all the required documents prior to applying for the loan. Banks typically request different sets of documents from salaried individuals and self-employed individuals to complete the loan approval procedure.

Documents for Two-Wheeler Loans

Every lender requires you to submit certain documents while applying for a loan. Some of the general documents required are given below:


For Salaried

For Self-employed

Identity Proof

PAN card, voter’s ID, passport, driving license

PAN card, voter’s ID, passport, driving license

Address Proof

Utility bills, passport, etc.

Utility bills, passport, etc.

Income Proof

Salary slips, IT returns, bank statements

Bank statements, IT returns, audited financial statements

Tips for Two-Wheeler Loan

A few loan applicants have had their applications rejected by lenders. This is not a pleasant feeling, and it is not good for your credit score. We have put together a list of tips that can help you apply successfully for a two-wheeler loan. These are as follows:

  • Determine the exact loan amount required:You should assess your needs and calculate exactly how much money you need to buy the bike you want. You should never apply for an amount larger than what you need.
  • Check your eligibility and compare your options:Once you decide how much money you need to borrow, take a look at all the loan options that you are eligible for. This is important. Never apply for a loan you don’t qualify for. This will automatically get your application rejected. Check your eligibility for a two-wheeler loan and make sure you fulfil all the criteria.
  • Check your credit score:Your credit score is one of the most important factors that determine loan approval. Lenders usually reject applications with low credit ratings. So, if your credit history is poor, look at improving it before applying for the loan.
  • Get a guarantor or co-applicant:If your credit score is not up to the requirement of the lender, see if you can get a guarantor or co-applicant. Having a guarantor or co-applicant who has good credit can help you get the loan you want.
  • Fill your loan application properly:Make sure your application is fully filled with all the details your lender requires. An incomplete application or an application that has wrong information may be rejected.
  • Submit all the necessary documents:While submitting your loan application, make sure you submit all the documents the lender requires as well. If you don’t submit the required papers, your application may be rejected.
  • Try applying with your existing lender:If you already have a good existing relationship with a bank, try taking the loan from them. This good standing may help you get a loan even if you don’t fulfil all their criteria.


When applying for a two-wheeler loan, there are several important factors to keep in mind to ensure a smooth and successful application process. Here are some key considerations:


  1. Creditworthiness:Your credit score and credit history play a significant role in determining your loan eligibility and interest rate. Before applying, check your credit score and address any issues that may negatively impact your creditworthiness.
  2. Loan Amount:Determine the loan amount you need based on the cost of the two-wheeler you intend to purchase. It’s advisable to make a down payment to reduce the loan amount and lower your monthly EMIs.
  3. Research and Compare:Shop around and compare loan offers from different lenders to find the most suitable option. Look for competitive interest rates, favorable loan terms, and minimal processing fees or hidden charges.
  4. Eligibility Criteria:Understand the eligibility requirements of lenders, including factors like age, income, employment stability, and credit history. Ensure that you meet the criteria before applying to increase your chances of approval.
  5. Documentation:Gather all the necessary documents required by the lender, such as identity proof, address proof, income documents, and bank statements. Ensure that your documents are accurate, complete, and up to date.
  6. Loan Repayment Capacity:Assess your financial situation and determine your repayment capacity. Calculate the monthly EMIs you can comfortably afford without straining your finances. Choose a loan tenure that allows you to repay the loan within your financial means.
  7. Loan Terms and Conditions:Read and understand the terms and conditions of the loan agreement thoroughly. Pay attention to details such as interest rates, processing fees, prepayment charges, late payment penalties, and other associated costs.
  8. Additional Charges:Inquire about any additional charges apart from the interest rate and processing fees. These may include documentation charges, insurance charges, and other fees that can increase the overall cost of the loan.
  9. Loan Pre-Approval:Some lenders offer pre-approval for two-wheeler loans. This allows you to know your loan eligibility and approximate loan amount before finalizing the purchase. It can simplify the buying process and provide bargaining power with the dealer.
  10. Loan Repayment Options:Understand the repayment options available, such as online payment facilities, auto-debit, or check payments. Choose the option that is most convenient for you and ensures timely repayment.

Remember to carefully assess your financial situation and borrow responsibly. Consider your monthly budget and ensure that the loan EMIs fit comfortably within your income. By being well-prepared and informed, you can make an informed decision and have a smoother loan application experience.

Do’s and Don’ts for Two-Wheeler Loan



Do your research well before you apply

Don’t apply for multiple loans at the same time

Make sure you are eligible for the loan you are applying for

Don’t apply for a loan simply because you get an attractive welcome gift

Compare interest rates and find the best option

Don’t forget to fill in the application form properly

Compare processing fees and other charges

Don’t sign the loan documents without reading them thoroughly

Evaluate your credit score before you apply

Don’t choose an EMI you cannot afford

Submit all the required documents without fail

Don’t forget to pay your EMIs on time

Read the offer document carefully before signing it

Don’t forget to prepay your loan if you can

Easy financing for superbikes

In India, the price of a luxury bike starts from Rs 5 lacs and it can go up to Rs 35 lacs or even more, depending on the model. Easy availability of finance from banks as well as non-banking finance companies for high-end two wheelers prompts customers to take up bike loans.

While 60-65% of the customers buy bikes on loan, some of them may go for a superbike loan only to avoid questions from the tax angle and not because they cannot afford it. But there are also instances of people with a monthly salary of Rs 30,000 buying these bikes.

For banks, offering loans for high-end bikes is one way of getting high net worth individuals (HNI) as customers. Strangely, many banks offer loans for luxury two-wheelers at rates lower than that for standard two wheelers. However, the tenures may be longer due to the high cost of the bike.

In some cases, the bank might not have an off-the-shelf loan product but could tailor one to suit the buyer’s needs. After all, someone who can afford to buy a bike of more than Rs 5 lacs could be a potential high net worth customer for the lender. The loan amounts are usually 70-80 per cent of the bike’s cost, but can also go up to 90 per cent, if the bank is happy with the customer’s profile.

People who buy high-end two wheelers do it more as a status symbol or for pleasure. But those who take loan for standard two wheelers are people who buy them out of necessity, for their daily commute.

The market for high-end bikes in India is at a nascent stage, although it is growing. Harley-Davidson has tie-ups with some private banks. Triumph is the superbike from UK and is financed by a few other private banks under a tie-up. Bucati is also a luxurious bike which is now sold in India. However, only a small percentage of customers opt for such loans.

While a large section of the demand comes from Delhi and Mumbai, cities like Bangalore, Ahmadabad and Chandigarh, too, have been excellent markets as a rich biking-culture already exists there. There is also an increasing demand from the south of India with Kochi, Chennai and Hyderabad where there is scope for a growing market for such superbikes.

Two-Wheeler safety tips for riders in the rainy season

It is very hard to drive on the Indian roads during the monsoon. Drainage, ditches, and speed-breakers are very dangerous during the heavy rains. Here are some safety tips for two-wheeler riders across the Indian cities & towns.

Before starting the vehicle, pre-check your vehicle for clutch, brake, indicators, headlight and fuel.

  • Always wear a fully covered helmet.
  • Follow the traffic rules religiously.
  • Pedestrians are extremely hard to spot in rain, so drive with care.
  • Don’t splash water on pedestrians.
  • Be extra cautious about the stray animals on the road.
  • Use indicators for turns and use head lights (dipper) for overtaking.
  • Avoid using cell phone and listening to music though earphones while driving.
  • Spot the vehicle behind you in the mirror before taking any turn.
  • Do not mix drinking and driving.
  • Drive slowly during the rains as well as on wet roads.
  • Avoid going through the kuchha road.
  • Go slow over the flooded roads.
  • Stay off the roads during heavy rains; park in concrete shade and wait till the rain stops.
  • Ride carefully and keep a safe distance between vehicles.
  • Be sure to wear a raincoat that will keep you dry so that you can wade your way.
  • Do not panic in adverse situations like a traffic jam or signal failure. Keep calm & allow for the traffic woes to ease.
  • Always carry license and other required documents.

Plan the journey in such a way that you reach your destination within daylight hours in rainy season.

The following table helps you compare the interest rates and processing fees offered by leading banks in India:


Bank Name

Interest Rate

Processing Fee



9.00% p.a. onwards 

Up to 4.75% of the loan amount + GST 


IDFC First Bank 

9.99% p.a. onwards 

5% of the loan amount 


Axis Bank

11.00% p.a. onwards

2.5% of the loan amount


Bank of India 

11.00% p.a. onwards

Contact the bank


Punjab National Bank

11.15% p.a. onwards

0.5% of the loan amount subject to Rs.500 to Rs.1,000


Canara Bank

11.35% p.a. onwards 



Union Bank of India

12.20% p.a. onwards

Contact the bank


Bank of Baroda 

9.40% p.a. onwards

2% of the loan amount 


Karnataka Bank 

14.23 p.a. onwards

Contact the bank 



14.50% p.a. onwards

2.5% of the loan amount


State Bank of India

17.75% to 19.50% p.a.

2.00% of the loan amount + GST (minimum of Rs.1,000)


UCO Bank 

UCO Float Rate plus 4.80% 

1% of the loan amount (minimum of Rs.500)


Indian Overseas Bank 

12.55% p.a. onwards 

Contact the bank 


Karur Vysya Bank 

10.80% p.a. to 17.30% p.a. 

1% of the loan amount (minimum of Rs.1,000)


Tamilnad Mercantile Bank 

14.95% p.a. 

1% of the loan amount 

Interest rates and processing fees sourced from- as on 06th July 6, 2023


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