What are the tips to avail a Bike Loan at a low interest rate?

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.

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Bike Loan Interest Rates

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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 Fees	The processing fee is a non-refundable fee levied by Tata Capital while processing your loan application. You are charged this one-time fee even if the loan does not get sanctioned. At Tata Capital, you are charged Up to 4% of the loan amount.
Documentation Charges	This fee covers the cost of verifying your documents, completing necessary compliance checks, and conducting due diligence before your loan is disbursed. At Tata Capital, you are charged Up to Rs. 1999.
PDD - Post disbursal document charges	This charge is applied for managing the Registration Certificate (RC), including document storage, administrative handling, and record management. At Tata Capital, you are charged Rs. 500

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)

Avail TATA Capital loans directly from WhatsApp

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Two Wheeler Loan Other Charges

Foreclosure charges

This is a charge applied if you choose to repay your entire loan before the end of the contracted loan term.

5% of the principal outstanding at the time of foreclosure

Repossession Charges

This is a charge applied when an asset is repossessed due to non-repayment of the loan.

At Tata Capital, you will be charged Rs. 8000

Statement of Accounts Charges

This is a charge applied for providing a physical copy of the Statement of Account – a statement having a list of all transactions made in your loan account during a given period.

At Tata Capital, you will be charged
Customer portal – Nil
Branch walk-in - Rs. 250

Foreclosure Report Charges

This is a charge applied for providing a physical copy of the foreclosure report.

At Tata Capital, you will be charged
Customer portal – Nil
Branch walk-in - Rs. 250

Duplicate NOC Charges

This is a charge applied for issuing a physical copy of the duplicate No Objection Certificate (NOC) due to any reason.

At Tata Capital, you will be charged Rs. 300

Stamp Duty

This is a government-mandated fee required for legally registering your loan agreement.

a) For loan amounts ₹ 85,000 and below– Rs. 0

b) For loan amounts above ₹ 85,000– At Actuals

Charges for delay in RC hypothecation

This is a monthly charge applied when you fail to submit the Registration Certificate (RC) for hypothecation to the Registering Authority within 120 days from the date of loan disbursement.

At Tata Capital, you are charged, Rs.1000/-per month till the time of registration/noting with the authority, where RC hypothecation is pending beyond 120 days post disbursement.

Loan Cancellation Charges

This is a charge applied if you request loan cancellation after the cooling-off period.

At Tata Capital, you will be charge

2% of the loan amount

OR

Rs. 5750/- (whichever is higher)

Part- Prepayment Charges

This is a charge applied if you choose to repay part of your loan before the end of your loan tenure.

5% of Part-Prepayment amount at the time of part-prepayment

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.

Two Wheeler Loan Penal Charges

Penal Charges, if any, in case of delayed payments

This is a charge for late EMI payments, calculated based on the number of days your EMI remains unpaid.

At Tata Capital, For default in payment of interest and/ or principal amounts 3% per month on defaulted amount (Annualized Penal Charge of 36%)

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 Two wheeler loan EMI payment due to inadequate funds in your bank account. At Tata Capital, you’ll be required to pay Rs. 600 per instrument per instance

Mandate Rejection Service Charge

Charges will be levied if EMI is due but valid instrument is not available for banking due to Mandate rejected by Borrower’s bank or EMI Post-dated cheques(wherever applicable) are not available. Tata Capital charges a nominal amount of Rs. 450

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

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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Key Factors That Affect Bike 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 – Your credit score is a critical factor in determining your loan interest rate. It reflects your financial health and repayment history. A score of 750 or above shows good creditworthiness, reassuring lenders of your ability to repay the loan. This often results in lower interest rates, while a lower score may lead to higher rates or even loan rejection.
Loan Amount - The loan amount you apply for can influence the interest rate. Larger amounts pose a higher risk to lenders, which might result in slightly elevated rates. Conversely, smaller loans may attract lower rates, though this depends on the lender's policies.
Loan Tenure - The tenure of your loan also affects interest rates. Loans with shorter tenures often have lower rates since the repayment period is less risky for lenders. However, shorter tenures also mean higher EMIs, which will lead to higher interest payout. So you’ll need to balance affordability with savings on interest to choose the best tenure.
Income Level - Your monthly income demonstrates your ability to repay the loan. Borrowers with higher and steady incomes are seen as low-risk, leading to more favourable rates. On the other hand, an inconsistent or low income may increase the perceived risk and the interest rate.
Employment Status - Your profession and job stability significantly impact your interest rate. Salaried individuals with stable jobs, especially in reputed organisations, are considered more reliable borrowers.
Relationship with the Lender : Existing customers with a positive relationship with their lender can often benefit from preferential rates. Timely repayments on previous loans can build trust and lower the interest rate.
Age : Your age can influence the interest rate as lenders assess financial stability based on your life stage. For instance, if you are close to the retirement age, the loan interest rate can be higher due to limited earning years.

Bike Loan Interest Rate FAQs

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.

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.