Expert Insights: How to Choose the Right Lender for Your Two-Wheeler Loan
July 13, 2025

According to a survey report by TechSci Research, India's Two-Wheeler Loan market is likely to be USD 12.3 billion industry by 2025, suggesting an annual compounded growth of approximately 11%. The growth is understandable since customers prefer taking a Two-Wheeler Loan instead of a personal loan, primarily because two-wheeler loans come with a lower interest rate compared to personal loans.
In India, there are are numerous banks and NBFCs (Non-Banking Financial Companies) offering Two-Wheeler Loans. However, for consumers, it's imperative to do a thorough research before deciding on a bike financier. In this article, we have discussed the factors you may consider when selecting a lender.
Factors to Consider When Choosing a Bike Financier
1. Customer Support
Not interest rates, it's the customer support that differentiates a financier from the rest. Customer-first banks like Ujjivan strive to provide optimal support once you're eligible for a Two-Wheeler Loan. This ensures the customer doesn't face any hurdle throughout the loan journey. The idea is to provide stress-free solutions for maximum convenience.
2. Eligibility Criteria
Each bank has its own set of eligibility criteria for Two-Wheeler Loans. Before choosing a bank, check their eligibility requirements. At times, it may happen that the advertised eligibility criteria may not match the actual criteria set by the bank. This may include factors such as age, income, employment stability, and credit score. During such instances, it's essential to contact the bank for better clarity. Selecting a bank whose eligibility criteria match your profile can increase your chances of getting approved for a loan.
3. Loan Amount
The loan amount plays a significant role in choosing the right lender. If you have your eyes set on a costly bike, it's important to select a lender that offers a sufficient loan amount and a high Loan-to-Value (LTV) ratio. The LTV ratio determines the percentage of the bike's value that the lender is willing to finance. With Ujjivan SFB, you can get financing up to 95% of the on-road price of the vehicle.
3. Interest Rates
Your two-wheeler loan EMI is directly proportional to the applicable interest rate. Sign up with a bike loan financier that offers competitive interest rates. You can use an online Two-Wheeler Loan EMI Calculator to check your EMI obligations. Online EMI calculators are extremely easy to use. Enter the loan amount, interest rate and tenure to vire your EMI obligations.
For example, let's say you want to purchase a bike worth ₹60,000 and opt for a loan tenure of 2 years. Assuming an interest rate of 10% per annum, the EMI calculation would be as follows: Loan Amount: ₹60,000, Interest Rate: 10% per annum, Loan Tenure: 2 years
Using an online EMI calculator, the monthly EMI would be approximately ₹2,817. This calculation allows you to assess whether the applicable interest rate fits your budget.
4. Additional Charges
Apart from the interest component, there may be other additional charges associated with your two-wheeler loan. These charges may include processing fees, documentation charges, late payment fees, or prepayment charges. Before finalising a lender, read the loan terms carefully to understand all the additional charges involved. Banks like Ujjivan ensure payment transparency without hidden charges.
5. Repayment Facility
Seek flexibility in loan repayment tenures. You may come across situations where you want to foreclose or prepay a portion of your loan. Check if the financier offers multiple repayment options to cater to your needs. Having the flexibility to manage your loan repayment can make your financial journey smoother.
6. Loan Journey
Financiers like Ujjivan who keep customer experience at the forefront offer a hassle-free and seamless loan journey. Some banks even provide doorstep services making the entire process more convenient. It's important to choose a lender that offers a loan application method that suits your preferences and ensures a quick disbursal of funds.
7. Special Offers
Motorcycle loan providers often roll out special offers for two-wheeler loans during festive seasons or other occasions. These offers can include lower interest rates, reduced processing fees, or additional benefits for borrowers. Before applying for a loan, compare the special offers available from different lenders. You may find attractive deals that can save you money.
Final Thoughts
Choosing the right lender for two-wheeler loan is essential to enjoy a stress-free loan journey. Consider factors such as eligibility, loan amount, interest rates, and customer service when making your decision.
Ujjivan SFB offers Chakra Loan - a two-wheeler loan that's designed to offer maximum convenience, including ease of application, competitive interest rates, financing up to 95% of the on-road price of the vehicle and more.
Disclaimer:
The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.
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FAQs
1. How can I calculate the EMI for my two-wheeler loan?
The EMI calculation formula is P x R x (1+R)^N / [(1+R)^N-1] where- ; P = Principal loan amount ; N = Loan tenure in months ; R = Monthly interest rate. However, manual calculation could be taxing and may leave room for errors. You can use an online Two-Wheeler Loan EMI calculator to calculate your EMI based on the loan amount, interest rate, and tenure.
2. Are there any hidden charges involved in a two-wheeler loan?
It's essential to read the loan terms carefully and understand all the additional charges associated with your loan. Ujjivan SFB ensures transparency in payments and do not have hidden charges.
3. Can I foreclose or prepay my two-wheeler loan?
Yes, most banks offer the option to foreclose or prepay a portion of your loan. However, there could be a prepayment penalty. Contact your bank for better clarity.
4. What should I consider while comparing special offers from different lenders?
Compare factors like interest rates, processing fees, and other benefits provided by lenders during special offers to choose the best deal for your two-wheeler loan.
5. How important is customer service when choosing a lender?
Customer service is crucial as it ensures a seamless experience throughout your loan tenure. Choose a bank with excellent customer service for prompt assistance.
6. Can Ujjivan SFB provide doorstep service for two-wheeler loans?
Ujjivan SFB offers doorstep service for two-wheeler loans with minimal paperwork, ensuring convenience for borrowers.
7. Is it possible to get a two-wheeler loan without an income proof?
Some banks may consider providing loans without income proof. However, having income proof may increase your chances of loan approval.
8. How long does it take to get a two-wheeler loan disbursed?
The time taken for loan disbursal varies across banks and may range from a few hours to a few days. It's advisable to check with your lender regarding their loan process and disbursal timeline.
9. Can I get a two-wheeler loan with a low salary?
Lenders may consider granting loans to individuals with lower salaries depending on their eligibility criteria. It's best to check with the lender for specific details.
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