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What is a Two-Wheeler Loan? Complete Guide

When considering it, two-wheelers emerge as some of the most reliable companions for middle-class families in India. Day and night, the roads of India are filled with the sight of bikes and scooters, serving not just as a means of commuting but also for leisurely rides, racing, long-distance travel, and off-road adventures. However, not everyone can afford to buy a bike outright with cash. This is where Two-wheeler loan come to the rescue. These loans are specially tailored to help individuals realize their dream of owning a bike or scooter. A two-wheeler loan provides attractive payment options, allowing borrowers to repay lenders through Equated Monthly Instalments (EMIs).

Two-Wheeler Loan



You might have heard some individuals claim that taking out a two-wheeler loan is a bad idea and that opting for a car loan is a better choice. However, everyone is entitled to their opinions, even if they are mistaken. Two-wheelers hold a special place in the hearts of Indians because:

  • They are more maneuverable in traffic.
  • They contribute less to pollution.
  • They save time during commutes, making it easier to navigate through traffic compared to cars.
  • Getting a bike loan without a down payment is more accessible.

The Majority of people in India opt for two-wheeler loans, even if they have the necessary funds to buy a vehicle outright. The reason is that these loans offer the option of repaying the amount in manageable EMIs. These EMIs are substantial enough to pay off the loan in a reasonable time frame but not substantial enough to severely impact one's finances. Consequently, two-wheeler loans are among the most favored financial products offered by banks, Non-Banking Financial Companies (NBFCs), and lenders. The popularity of two-wheeler loans, particularly those without a down payment, has spurred competition among lenders, resulting in numerous options with attractive interest rates, EMIs, and other perks like instant approval and loans for used bikes to entice customers.

However, the wide array of choices for purchasing a dream bike or scooter can be overwhelming. Many people do not fully understand the requirements for applying for a two-wheeler loan or the factors to consider before applying for a bike loan. Without further delay, here are some key factors you need to know about two-wheeler loans:

The Process of Availing a Two-Wheeler Loan:

There are two methods to apply for bike or scooter loans: online and offline. However, the steps for applying for the loan largely remain the same:

  • Research interest rates and tenure offered by different lenders or banks, and utilize a two-wheeler loan EMI calculator to assess feasibility. Additionally, review the required documents and the complexity of the documentation process.
  • Check the eligibility criteria to ensure you meet the bank or lender's requirements.
  • Select the bank or lender that best suits your needs, taking into account factors such as the urgency of the loan.
  • Ensure you have all the necessary documents to complete the documentation process.
  • The best part of the process: Acquire your dream bike or scooter.

Eligibility Criteria for Two-Wheeler Loans:

As the majority of bike loans are unsecured, banks exercise caution to ensure their customers can repay the loan. Each bank or lender will have its own set of eligibility requirements. However, here is the general eligibility criterion:

Documents Required for Bike Loans:

It's important to note that while eligibility criteria are essential for loan approval, lacking the required documentation to support that information can result in rejection. Like eligibility criteria, every bank may have different documentation processes and requirements. However, here are the most basic documents you may require:

Type of DocumentsRequirement
Photo Identity Proof2-6 passport size photographs
Identity ProofThe following are considered as identity proof:

  • PAN Card
  • Passport
  • Aadhar Card
  • Driving License
  • Electoral Voter ID Card
Proof of EmploymentFor self-employed Individuals:

  • The Last Form 16
  • Proof of income source
  • Bank Statement

For salaried individuals:

  • Salary Slips
  • Offer letter or letter of employment
  • Bank Statements

Interest Rates for Two-Wheeler Loans:

Interest rates for two-wheeler loans vary based on factors such as your credit score, loan tenure, and the type of bike or scooter. Rates can range from as low as 11% to as high as 18.25%, depending on these factors and your choice of lender. To identify the banks offering the lowest two-wheeler loan interest rates, consider researching your options.

Instant Two-Wheeler Loan at PaySense:

While applying to a bank for a two-wheeler loan is a secure and conventional option, the digital age offers better lending alternatives. Banks may offer slightly lower interest rates, but they often come with drawbacks, such as tedious documentation and time-consuming approval processes. Moreover, some banks may not permit the use of the loan for purchasing secondhand bikes or scooters. PaySense not only provides loans for both new and used two-wheelers but also offers instant loan approval. Don't wait; use the two-wheeler loan EMI calculator to assess affordability and apply right away!

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