With advancements in the finance industry, availing loans has become easier, quicker, and simpler. One of the popular loans that many across the country rely on is a bike loan, also known as a two-wheeler loan.

A key reason for its rising popularity is the affordability and accessibility of a bike loan. Today, more and more lenders offer a competitive bike loan interest rate, making it an attractive financing option. However, like any credit you avail of, comparing the cost of a two-wheeler loan is crucial. 

An important determinant of your cost is the bike loan interest rate that lenders levy. Apart from that, you also need to consider other charges, such as processing fee, prepayment penalty, and more. 

Here is a comparison of bike loan interest rate and other costs across top lenders in India as well as how you can get the most affordable loan. 

Comparison of Bike Loan Offered by Top Banks and NBFCs

As you check out the bike loan interest rate and other charges of various lenders, remember that these may change as per the lender’s policies and market conditions. So, make sure you check the current details before you avail of a bike loan. 

Bajaj Auto Finance
 

Among the leading lenders in India, Bajaj Auto Finance offers an attractive bike loan interest rate to eligible applicants. Here are charges associated with a two-wheeler loan from the NBFC:
●Interest rate: 11.20% per annum onwards
●Processing fee: 1% of the loan amount
●Part prepayment charges: Nil
●Foreclosure charges: 3% of the outstanding loan amount if done before 12 months

Kotak Mahindra Prime Limited
 

Kotak Mahindra Prime Limited offers a bike loan with a seamless application process and at an affordable cost. Listed below are the interest rate and other costs associated with its two-wheeler loan:
●Interest rate: 8.75% per annum onwards
●Prepayment charges: 5.21% on outstanding principal amount, excluding taxes

Punjab National Bank
 

A leading national bank in India, Punjab National Bank offers a bike loan with a flexible tenure and at an attractive interest rate. Given below is the bike loan interest rate and other charges associated with a two-wheeler loan from the bank:
●Interest rate: 11.15% per annum onwards
●Processing fee: 0.50% of the loan amount, subject to maximum of ₹1,000
●Prepayment charges: Nil

State Bank of India
 

One of the most popular banks in India, the State Bank of India (SBI) offers an accessible bike loan with simple eligibility criteria. Given below is an overview of the bike loan interest rate and other charges levied by the bank:
●Interest rate: 11.75% per annum onwards
●Processing fee: 2% of the loan amount + GST, as applicable
●Prepayment charges: Nil

Axis Bank
 

Among the many lenders offering a bike loan, Axis Bank is one of the most trusted and customer friendly. With a flexible tenure and high value loan amount, Axis Bank levies the following charges:
●Interest rate: 16.50% onwards
●Processing fee: Capped at 2.5% of the loan amount
●Part-prepayment charges: 5% of the amount paid as part-prepayment
●Foreclosure charges: 5% of the outstanding borrowed/ principal amount

L&T Finance
 

A bike loan is among the numerous financing solutions offered by L&T Finance. With an attractive bike loan interest rate, its two-wheeler loan has minimal requirements for documentation. Here are the charges associated with a two-wheeler loan from the lender:
●Interest rate: 7.99% per annum onwards
●Processing fee: Depends on the scheme availed
●Part-prepayment charges: 5% of the amount prepaid plus taxes
●Foreclosure charges: 5% of the amount plus taxes

Tips to Get Affordable Bike Loan Interest Rate

As you shortlist lenders with the most competitive bike loan interest rate, read on to know how you get the most affordable rate. 

Maintain A Good Credit Score

Generally, you can get attractive interest rates for a bike loan if you are a low-risk borrower and can repay the loan on time. Since your credit score is an indication of both these factors, having a good score makes you eligible for affordable interest rates. 

Usually, a CIBIL score of over 750 helps you get a nominal bike loan interest rate.

Use an Eligibility Calculator 

An eligibility calculator helps you check if you qualify for a bike loan based on the eligibility terms of a lender. Each lender has this calculator on their website. By using it, you will understand how well you meet the eligibility criteria.

By meeting all the criteria, you can look forward to receiving a more affordable bike loan interest rate. This way, you can check your eligibility across lenders and opt for a loan only when you meet all the terms. 

Using this calculator also gives you an estimate of the loan amount you can borrow, so you can plan your bike loan better.  

Reduce Your Existing Debt

Having a high amount of existing debt while you apply for a bike loan makes you a high-risk borrower. This is because it implies that your earnings are tied up in other repayments and you may not be able to repay a new loan on time or in full. 

By reducing your existing debt, you showcase that you have the funds to manage a new loan. This reduces the lender’s risk and thus makes you eligible for an affordable bike loan interest rate.

Make a Higher Down Payment

A crucial factor that impacts the bike loan interest rate is the amount you borrow from the lender. While you can get 100% of the bike’s purchase value as a loan, it is best to make a down payment of around 20% or more. 

This is because a lower loan amount reduces the lender’s risk, which they address by charging a lower bike loan interest rate. A higher loan amount thus usually comes with a higher interest rate. 

So, make a sizeable but manageable down payment to get the remaining funds at an affordable rate.

Now that you have an idea of the bike loan interest rate levied by top banks and NBFCs, be sure to compare all the aspects of the loan before applying. This will help you choose a lender that offers a bike loan that lets you buy the ride you want without straining your budget.

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