What are the benefits of a two wheeler loan?

A two wheeler loan has the following benefits– Avoiding public transport amidst COVID-19 – Avoiding public transport amidst COVID-19 – Abstain from taking overcrowded public transportation and travel safely with a personal two wheeler.Easy way to finance your dream ride – In a few simple steps, you can bring home your dream two wheeler at affordable interest rates.Meeting all personal and business commuting needs – You need not depend on anyone else for your commuting requirements, especially in times of emergencies.Keeping aside cash for emergencies – Keep your savings undisturbed for emergency situations as you can repay the loan in easy monthly instalments. With Tata Capital, you get the best bike interest rates in the industry. Our new bike loan interest rates start at just 11.5%.Tax claims and deductions - Enjoy tax benefits on the interest payable of the vehicle if you’re taking a Two-wheeler loan for electric vehicle.

What are the tips to lower bike loan interest rates?

Before you apply for a loan, make sure you get the best deal on the interest rate. Follow these simple tips to get the lowest bike loan interest rate-Improve your credit score:Your credit score has a major role when it comes to determining your interest rate. So, look at ways to improve it before you apply to get the lowest bike loan interest rate.Improve your Current Debt Status Shop: Check your debt-to-income ratio. To bring down this ratio, repay your existing loan. The lower the ratio, the better your chances are of getting good interest rates.Negotiate with your Lender:Sometimes, negotiating with your lender foe a low interest bike loan can help, especially when you don’t fulfill all the eligibility criteria. For example, if you don’t have sufficient income but are expecting a pay raise in the future, you can offer proof to back this and get affordable interest rates.Turn to your existing lender for the best deal:If you already have a good relationship with a lender, you can get better two wheeler loan interest rates.

What are the things to consider other than interest rates?

While availing a loan for two wheeler, interest rate is not the only charge you need to pay. There are many other factors that you must consider before you apply for a loan. They include-Processing Fee:It is a one-time charge that you need to pay the lender for processing your loan application. A high processing fee will increase your overall loan costs. So, make sure you choose a lender that offers you the lowest two wheeler loan interest rate along with a reasonable processing fee.Eligibility Criteria Some lenders have stricter eligibility criteria than others. Choose a lender whose criteria you can easily fulfil to get your low interest bike loan without any hassles.Prepayment Charges:Prepaying your loan can help you save money on two wheeler loan interest costs. But, many lenders charge a fee if you want to prepay or foreclose your loan. So, before you apply for a loan, compare these charges for different lenders.Other Charges: Make sure to read the loan offer document carefully and find out every other cost there is before finalizing the offer. This will not only help you get a lower two wheeler finance interest rate but will also avoid any confusions later.Disbursal Time:This is the time the lender takes to give you the money from the time you apply for it. Besides looking for the best bike finance interest rate, find out how long different lenders take to sanction and disburse your loan.Discounts and special offers: Look out for seasonal discounts or special bike loan interest rates and loan conditions offered by different lenders before making a decision. Many lenders give customers special offers during festival seasons. These offers can help you get a low bike loan interest rate, bike loan terms that are preferential, and better repayment options. Tax claims and deductions:Enjoy tax benefits on the interest payable of the vehicle if you’re takingaTwo-wheeler loanfor electric vehicle.

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Two Wheeler Loan Interest Rates & Charges

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Two Wheeler Loan Interest Rates

Two-wheeler vehicle loan interest rate is the rate at which you'll have to pay interest on your two-wheeler loan principal for a fixed tenure. It differs from lender to lender.

Type of Fee	Applicable Charges
Processing Fee	Up to 4% + GST on total loan amount
Additional Processing fee/Admin fee	Up to ₹ 2500 wherever applicable
Document Processing Charges	Up to ₹ 650 + GST

Tata Capital offers the lowest two wheeler loan interest rate in the industry, starting at just 8.99% flat rate (may vary as per the product and profile)

Types of Bike Loan Interest Rates

For Two-wheeler loans, there is only one type of interest rate that is applied which is fixed interest rates. Let's look at it in-depth now.

Fixed interest rates

Fixed interest rates, as the name suggests, do not change over the tenure of the loan. This means that you pay only a fixed interest rate throughout the entire duration. For example, let's say you take a bike loan for Rs. 2 lakhs for five years at 7%. This means you'll only pay interest at a rate of 7% till the end of the loan tenure.

Pros of fixed interest rates

These interest rates never change, so you can always expect to pay the same rates until the end of the tenure and plan your finances better.
This can be advantageous in an unstable market condition, especially when money is important to save

Cons of fixed interest rates

Although they are stable, they can be higher than floating interest rates
You can lose money indirectly as interest rates would come down for floating interest rates in good market conditions

Penal Charges on Two Wheeler Loan

Default in payment of amounts due as per the Facility Documents

3% per month on overdue amount + applicable taxes.

Dishonour of any cheque/
payment instruments

These are those charges that are levied in case of an EMI bounce per instance. In other words, these charges are levied when you miss a personal loan EMI payment due to inadequate funds in your bank account. At Tata Capital, you’ll be required to pay Rs. 600 for every Cheque/Payment Instrument Dishonour.

Mandate Rejection Service Charge

Charges will be levied if new mandate form is not registered within 30 days from the date of rejection of previous mandate form by Borrower’s bank for any reason whatsoever. Tata Capital charges a nominal amount of Rs. 450 + GST.

Other Charges on Two Wheeler Loan

NACH/PDC charges

₹ 850

Cancellation Charges

2% of loan amount or ₹5,750 whichever is higher

Payment Instruments swapping

Rs.550/- each time

Prepayment / Foreclosure charges

5% of the principal outstanding at the time of Prepayment / Foreclosure charges + GST

Broken Period Bike Loan Interest

At Actuals

Repossession Charges

Rs. 8000 + GST as applicable

Statement of Accounts

₹ 300

Foreclosure Report

₹ 550

Duplicate NOC

₹ 300

Stamp Duty Charges

For loan amounts up to ₹ 85,000 – ₹ 250
For loan amounts above ₹ 85,000 – As per state

Note: GST, other government taxes and levies as applicable, will be payable on all fees and charges.

Disclaimer:

The rates/charges indicated above are subject to revision at Tata Capital’s discretion from time to time.
Soft copies of documents mentioned in the table above will be provided free of cost. For hard copies, please refer to the above table for the applicable fees & charges.

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Factors that Affect Two-Wheeler Loan Interest Rate

Before you take on a two-wheeler loan, it can help to know what factors influence it so you can make a more informed decision. We dive into each of these factors so you can get a good overview of the loan's working.

Credit scores

The higher the credit score, the better the chances of you availing of a loan easily. Also, the lower the scores, it gets more difficult to avail of a loan. Fortunately, you can still get a loan with a low credit score, but your interest rates might be high.

So, it is always recommended to keep your credit scores high. This gives trust to the lender and can help you in future situations, too, when you need loans.

Income and income source

Generally, the higher the income, there are better the chances of availing of better interest rates because of higher affordability. However, you can still avail of a loan if you meet the minimum income requirement as set by the lender.
Your income source is also another factor that lenders will consider. If you are a salaried individual, you again have better chances of getting a loan easily.

Place of residence

If you live in a Tier-1 city, you can expect your interest rates to be high. While on the other hand, if you live in a Tier-2 city, your interest rates will be relatively lower.

Debt-to-income ratio

The better your debt-to-income ratio, the higher your chances of getting good interest rates.

It is calculated by taking all of your debt payments divided by your income. So, for example, if you have total monthly expenses amounting to Rs. 10000 and Rs. 5000, and your monthly income is Rs. 30000, your ratio will be 50%. In this case, you can improve your ratio by either cutting down the expenses or increasing your income levels.

Age

If a student who is 18 years old wants to avail of a loan, it will be challenging as they might not have a steady income source. And if a person close to their retirement age plans on taking a loan, it can be hard for them, too, as they won't have a steady source of income.

So, for these reasons, people who fall in between the age limits have better chances. Tata Capital's age eligibility criteria are for people between the ages of 18 and 60.

Loan tenure

If you choose a longer tenure, the rate of interest you will get will be much lower, but your overall interest paid will be high. On the other hand, if you choose a shorter tenure, the rate of interest will be high, but the overall interest to be paid will be low.

So, to make the best choice, evaluate both your long-term and short-term goals and see which one makes more financial sense. For example, if you plan on finishing the loan at any cost as soon as possible, then you can choose a smaller tenure at a higher rate of interest.

Two wheeler Loan EMI Calculator

Loan amount

₹

₹75,000 ₹35,00,000

Loan duration

1 Years 6 Years

Rate of interest

10% p.a 19% p.a

Monthly EMI

Total Amount Payable

0*
Total Interest Payable

0*

Total Amount Payable

Total Interest Payable

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FAQs on Two Wheeler Loan Interest Rate

To get a two wheeler loan at the lowest interest rate, follow these simple steps–

Check your two wheeler loan eligibility and submit the application form online for a quick and hassle-free procedure.

Visit the dealership showroom and select a bike or two wheeler of your choice.

Submit the required two wheeler loan documents.

We will verify your documents and credit report for loan approval.

Post-verification, if there are no discrepancies, we will sanction your loan and disburse the amount to your dealer. 

A two wheeler loan has the following benefits–

Avoiding public transport amidst COVID-19 – Avoiding public transport amidst COVID-19 – Abstain from taking overcrowded public transportation and travel safely with a personal two wheeler.
Easy way to finance your dream ride – In a few simple steps, you can bring home your dream two wheeler at affordable interest rates.
Meeting all personal and business commuting needs – You need not depend on anyone else for your commuting requirements, especially in times of emergencies.
Keeping aside cash for emergencies – Keep your savings undisturbed for emergency situations as you can repay the loan in easy monthly instalments. With Tata Capital, you get the best bike interest rates in the industry. Our new bike loan interest rates start at just 11.5%.
Tax claims and deductions - Enjoy tax benefits on the interest payable of the vehicle if you’re taking a Two-wheeler loan for electric vehicle.

With Tata Capital, you can get a bike finance for a maximum value of Rs. 2.85 lakhs. Depending upon your two wheeler loan eligibility, you can choose from a wide principal bracket (Rs. 25k to Rs. 2.85 lakhs). Moreover, our bike EMI interest rates start at just 10.99%. You can also calculate your bike loan EMI in advance using our two wheeler loan EMI calculator.

You can avail two wheeler loan ranging from 6 months to 60 months.

No, you do not need to pledge any additional asset as collateral when you avail of bike finance from Tata Capital. The vehicle you purchase will itself act as the security for your two wheeler loan.

Besides the 2 wheeler loan interest rate, you'll also have to pay a processing fee. Processing fee of a two wheeler loan is the fee charged for the processing of your loan application. This one-time fee is non-refundable even if we reject your loan application. Tata Capital charges a processing fee which is upto 4% + GST on the loan principal amount.

Since the interest rate is expressed as a percentage per annum, the following formula is used to calculate two wheeler loan interest - (Bike Loan Interest Rate/Number of Payments) x Loan Principal = Interest.

Let us understand this with the help of an example – For a loan principal of Rs. 2 lakhs taken at a bike loan interest rate of 12% for a period of 12 months or one year, the bike loan interest rate can be calculated as – (0.12/12) x 2,00,000 = Rs. 2,000.

Besides two wheeler loan interest rate, you also have to pay other charges like foreclosure charges. These are the charges you need to pay if you want to close your loan before the completion of the tenure. You will have to pay the relevant foreclosure charges along with the payment of the outstanding principal. Tata Capital levies foreclosure charges equivalent to 5% of the principal outstanding at the time of foreclosure of two wheeler loan + applicable GST.

Yes, the 2 wheeler loan interest rate is eligible for tax deductions to a maximum of Rs. 1.5 lakhs in a financial year as per Section 80 C of the Income Tax Act. You can only claim the deduction if you purchase the vehicle for business purposes. This is a big relief for self-employed individuals from high two wheeler loan interest rates. You cannot avail tax deductions if you purchase the vehicle for personal use.

No, the processing fees for two wheeler loan is not refundable. This is because we use the money you pay as processing fees towards the legal and technical action involved in the processing of your loan application. Hence, it is non-refundable even if your application is rejected.

A1. When a loan’s payable bike interest rate remains fixed throughout the tenure and does not decrease even as you pay instalments, it is a flat interest rate. The IRR (internal rate of return) measures an investment’s annual growth without factoring in external elements like inflation, risk-free rate, or capital cost. It helps determine the profitability of your

investments.

A2. The two-wheeler loan will incur the following additional charges:

1. 2 wheeler loan processing fee

2. Additional processing/admin fee

3. Post-disbursement documentation charge

4. Miscellaneous charges

A3. Yes, the credit score plays a significant role in determining the interest rate for a

two-wheeler loan. Rates of interest will be low if you improve your credit score.

A4. Tata Capital offers competitive interest rates on bike loans. You can learn more about our current interest rates here. For more information about two-wheeler loans, click here.

Before you apply for a loan, make sure you get the best deal on the interest rate. Follow these simple tips to get the lowest bike loan interest rate-

Improve your credit score: Your credit score has a major role when it comes to determining your interest rate. So, look at ways to improve it before you apply to get the lowest bike loan interest rate.
Improve your Current Debt Status Shop: Check your debt-to-income ratio. To bring down this ratio, repay your existing loan. The lower the ratio, the better your chances are of getting good interest rates.
Negotiate with your Lender: Sometimes, negotiating with your lender foe a low interest bike loan can help, especially when you don’t fulfill all the eligibility criteria. For example, if you don’t have sufficient income but are expecting a pay raise in the future, you can offer proof to back this and get affordable interest rates.
Turn to your existing lender for the best deal: If you already have a good relationship with a lender, you can get better two wheeler loan interest rates.

While availing a loan for two wheeler, interest rate is not the only charge you need to pay. There are many other factors that you must consider before you apply for a loan. They include-

Processing Fee:It is a one-time charge that you need to pay the lender for processing your loan application. A high processing fee will increase your overall loan costs. So, make sure you choose a lender that offers you the lowest two wheeler loan interest rate along with a reasonable processing fee.
Eligibility Criteria  Some lenders have stricter eligibility criteria than others. Choose a lender whose criteria you can easily fulfil to get your low interest bike loan without any hassles.
Prepayment Charges: Prepaying your loan can help you save money on two wheeler loan interest costs. But, many lenders charge a fee if you want to prepay or foreclose your loan. So, before you apply for a loan, compare these charges for different lenders.
Other Charges: Make sure to read the loan offer document carefully and find out every other cost there is before finalizing the offer. This will not only help you get a lower two wheeler finance interest rate but will also avoid any confusions later.
Disbursal Time: This is the time the lender takes to give you the money from the time you apply for it. Besides looking for the best bike finance interest rate, find out how long different lenders take to sanction and disburse your loan.
Discounts and special offers:  Look out for seasonal discounts or special bike loan interest rates and loan conditions offered by different lenders before making a decision. Many lenders give customers special offers during festival seasons. These offers can help you get a low bike loan interest rate, bike loan terms that are preferential, and better repayment options. 
Tax claims and deductions: Enjoy tax benefits on the interest payable of the vehicle if you’re taking a Two-wheeler loan for electric vehicle.

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Two Wheeler Loan Interest Rates & Charges

Two Wheeler Loan Interest Rates

Types of Bike Loan Interest Rates

Fixed interest rates

Pros of fixed interest rates

Cons of fixed interest rates

Penal Charges on Two Wheeler Loan

Default in payment of amounts due as per the Facility Documents

Dishonour of any cheque/ payment instruments

Mandate Rejection Service Charge

Other Charges on Two Wheeler Loan

NACH/PDC charges

Cancellation Charges

Payment Instruments swapping

Prepayment / Foreclosure charges

Broken Period Bike Loan Interest

Repossession Charges

Statement of Accounts

Foreclosure Report

Duplicate NOC

Stamp Duty Charges

Disclaimer:

Avail TATA Capital loans directly from WhatsApp

Factors that Affect Two-Wheeler Loan Interest Rate

Credit scores

Income and income source

Place of residence

Debt-to-income ratio

Age

Loan tenure

Two wheeler Loan EMI Calculator

Loan amount

Loan duration

Loan duration

Rate of interest

Related Videos

How to Check Two Wheeler Loan Eligibility?

FAQs on Two Wheeler Loan Interest Rate

How to get a two wheeler loan at low bike loan rate?

What are the benefits of a two wheeler loan?

What is the maximum bike loan available?

What is the maximum tenure available for two wheeler loan?

Do you need collateral for a two wheeler loan?

How much is two wheeler loan processing fees?

How is two wheeler finance interest rate calculated?

What are the foreclosure charges applicable on a two wheeler loan repayment?

Is 2 wheeler loan interest rate exempt from tax?

Is two wheeler loan processing fees refundable?

What is a flat rate of interest and IRR rate of interest?

What are the different types of charges that can be levied in a two-wheeler loan?

Will the interest rate be high in case my credit score is low?

What is the current interest rate on the two-wheeler loan?

What are the tips to lower bike loan interest rates?

What are the things to consider other than interest rates?

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