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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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 5% on loan amount
Documentation Charge	Up to ₹ 3500 wherever applicable
PDD - Post disbursal document charges	Rs 500 + 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)

Avail TATA Capital loans directly from WhatsApp

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Two Wheeler Loan Other Charges

PDC Charges-Post Dated Cheques

₹ 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 Interest

At Actuals

Repossession Charges

Rs. 8000 + GST as applicable

Statement of Accounts

₹ 300

Foreclosure Report

₹ 550

Duplicate NOC

₹ 300

Stamp Duty

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

Two Wheeler Loan Penal Charges

Default in payment of amounts due as per the Facility Documents

3% per month on overdue amount

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.

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

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₹75,000 ₹35,00,000

Loan duration

1 Years 6 Years

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10% p.a 19% p.a

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0*
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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.

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Bike Loan Interest Rates

Two Wheeler Loan Interest Rates

Avail TATA Capital loans directly from WhatsApp

Two Wheeler Loan Other Charges

PDC Charges-Post Dated Cheques

Cancellation Charges

Payment Instruments swapping

Prepayment / Foreclosure charges

Broken Period Interest

Repossession Charges

Statement of Accounts

Foreclosure Report

Duplicate NOC

Stamp Duty

Disclaimer:

Two Wheeler Loan Penal Charges

Default in payment of amounts due as per the Facility Documents

Dishonour of any cheque/ payment instruments

Mandate Rejection Service Charge

Types of Bike Loan Interest Rates

Fixed interest rates

Pros of fixed interest rates

Cons of fixed interest rates

Two wheeler Loan EMI Calculator

Loan amount

Loan duration

Loan duration

Rate of interest

Key Factors That Affect Bike Loan Interest Rate

Related Videos

How to Check Two Wheeler Loan Eligibility?

Bike Loan Interest Rate FAQs

How is bike finance interest rate calculated?

What are the charges for foreclosure of a two wheeler loan?

Can I claim tax exemption on Two-Wheeler Loan?

Is two wheeler loan processing fees refundable?

Are higher interest rates charged when you have a lower credit score?

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

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

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