Top bike loan options of 2023

The affordable bike loan interest rate, ease and flexibility of a bike loan help you cover the actual price of the two-wheeler in small and affordable instalments.

Hyderabad: A bike is an efficient means of transport, whether you need to go grocery shopping or commute to work. The mobility of two-wheelers makes them a popular choice among the Indian population. Adding to that, affordable bike loans available in the market make purchasing a two-wheeler easier and more convenient.

A recent survey reveals that the portfolio of two-wheeler loans increased by 10.6% every year. The affordable bike loan interest rate, ease and flexibility of a bike loan help you cover the actual price of the two-wheeler in small and affordable instalments.

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However, with India’s bike loan interest rate ranging from 6.85% to 28.30%, you need to make an informed choice when choosing a lender. To help you with that, here are some essential facts about bike loans and a few smart options to consider.

Features of Bike Loans

Bike loans work similarly to personal loans, wherein you borrow a specific amount to purchase a two-wheeler. Then, you have to repay the principal amount along with the interest levied until the loan tenure is complete.

Here are some essential features of bike loans you must know:

• Some lenders offer 100% of the bike’s road price as a loan amount, meaning you do not have to pay any down payment
• You can get a bike loan quickly, thanks to the simple application process and minimal documentation
• These two-wheeler loans have a maximum repayment tenure of up to 4 years
• Certain lenders offer pre-approved bike loans to their existing customers, meaning instant approval and quick disbursement
• You get low interest rates as the loan is a type of secured loan wherein the bike acts as collateral
• Most lenders include the registration cost and insurance coverage in the loan amount

Aside from these features, it is important to note that the bike loan interest rate depends on various factors such as:

• Your credit score
• Your employment type
• Your age
• Your annual income

For instance, if you have an excellent credit history, you stand a better chance of getting a bike loan at low interest rates. Remember that your employment type is also crucial in determining your bike loan interest rate.

Lenders set different criteria for salaried and self-employed professionals. Hence, when zeroing in on a lender, you need to consider all these factors. Furthermore, your age and annual income are other deciding factors when getting loan approval.

If you are closer to the retirement age, the bike loan interest rate can increase. Apart from these factors, the relationship with the lender has a significant say in deciding the interest rate.

Popular Bike Loan Options of 2023

While you are familiar with some important features of two-wheeler loans, know that the bike loan interest rate is comparatively lower than a personal loan or a credit card. Hence, weighing the pros and cons of these loan options is prudent before selecting a lender.

To help you with that, here are some loan options from a few NBFCs and banks. Check the table and choose a lender that best aligns with your financial goals.

 

Bank/NBFC	Interest Rates
Axis Bank	16.50% – 24.00%
Bajaj Auto Finance	Starting at 11.20%
Mahindra Finance	6.00%-25.75%
HDFC Bank	20.90%
L&T Finance	7.99% – 15.00%
Punjab National Bank	12%
State Bank of India	Starting from 11.75%
Union Bank of India	12.50%

Disclaimer: Above-mentioned interest rates are subject to change at the lender’s discretion. Hence, kindly check with the lender before availing a two-wheeler loan.

 Eligibility Criteria for a Bike Loan

After comparing the interest rates across lenders, you must check the eligibility parameters before availing a bike loan. With different lending institutions setting varying criteria, here are some of the most common parameters you must meet:

• You have to be at least a minimum of 18-21 years when applying for a two-wheeler loan
• Your age must not exceed 65 years when the loan tenure ends
• Your monthly income must be at least ₹10,000-₹15,000
• You must be working in the current organisation for at least a year
• Your credit score must be above 700
• You need to be residing in the city for at least a year

While a credit score of 700 can get you a loan sanction, lenders prefer a good score of 750 or above. This can help you get a loan at a nominal interest rate.

Documents Required When Availing a Bike Loan

Submit the following documents after you check your eligibility and get loan approval.

ID Proof (any one)

• Aadhaar card
• PAN card
• Voter ID
• Driving licence

 Address Proof (any one)

• Ration card
• Utility bills
• Passport

 Proof of income

• Latest bank account statements
• Audited financial report (for self-employed professionals)
• IT returns (self-employed)
• Latest salary slips

Latest passport-size photographs

  Tips to Improve Your Loan Eligibility

While securing a bike loan is easy and hassle-free, meeting the eligibility criteria is crucial. Here are some essential tips that can expedite the process of availing a loan.

1. Make sure you maintain a good credit score:
   Lenders assess your creditworthiness using this. One way to improve your score is to pay your outstanding dues without delay.
2. You need a stable income source and a job:
   These increase your chances of getting a loan. Furthermore, this assures your credibility with the lender.
3. Maintain a low debt-to-income ratio:
   Lenders assess your repayment capacity based on income. This ratio compares your earnings with the debts you owe. Keeping the ratio below 40% can increase your chances of loan approval.
4. Make a down payment:
   Some lenders offer up to 100% finance of the bike’s on-road price, but you should still make a down payment. This can help you get a lower rate.
5. Apply with a co-applicant:
   Doing so improves your loan eligibility as lenders consider the income sources of both applicants.

Now that you know a few essential facts about bike loans and the top options available in 2023, make an informed choice when choosing the lender. Compare the bike loan interest rates and select a financial institution offering loans on favourable terms.