What is two-wheeler loan?

In India owning a two-wheeler is the most preferred mode of transport. Travelling by a two-wheeler makes life a whole lot simpler, especially because of the heavy traffic. Owning a two-wheeler is also a craze among youngsters and that’s where two-wheeler comes into the picture. Previously the trend of taking two-wheeler loans have also been in purchasing regular bikes and scooters. However, over the years most two-wheeler loans are taken to finance superbikes, racer bikes etc.

Why avail two-wheeler loans?

Low interest rates:
Interest rates on two-wheeler loan are relatively low as compared to other loan products and are around 10-12%. Woman borrowers get special discounts.

Easy documentation:

There is minimal documentation and instant approval of loan at the time of vehicle purchase.
Flexible repayment:
These loans have a flexible repayment options so you can pay back your loan at your convenience. No guarantor is required.

Maximum loan amount:

Banks and financial institutions offer loans up to 80-90% of the value of the vehicle. There are a few lenders who also offer 100% financing, but there are certain terms and conditions.
Tie-up with two-wheeler dealers:
Banks and financial institutions tie up with two-wheeler dealers and allow them to bundle the loan with the vehicle they are selling making customers life easier.


The time period of the loan can be 1-3 years and can be extended till 5 years.
Before opting for a two-wheeler loan make sure you have these 3 questions cleared out:

1) Kya aapke credit score main dum hai?

Yes, just like your toothpaste with salt has real dum, so does a loan applicant with a high credit score. Anything above 750 works. All you need to do is pay your bills on time and keep loan enquiries to a minimum.

2) Kaunsa model hai?

Yes, the bike model matters a lot! More high-end or new to the market is your bike, expect a higher price which means a higher loan amount and interest rate. If you can afford to repay the loan amount, then go for a high-end model or else, settle for a nominal one.
3) Kitne time take loan chukana hai?
Tenure is a vital aspect to consider before availing a loan. The time period influences the interest rate in a direct manner. Longer the tenure, higher is the interest you must bear and pay. It is best to go for a minimum tenure.