Question 1

What is the interest rate on two wheeler loan in India ?

Accepted Answer

Two wheeler loan interest rates in India : Banks — 10.5% to 15% per annum. NBFCs (Bajaj Finance, HDB, etc.) — 14% to 26% per annum. Manufacturer financing (Honda, Hero, etc.) — 10% to 18% per annum. The rate depends on credit score, income, loan amount and tenure. Always compare the effective rate (flat vs reducing balance — flat rates appear lower but are costlier).

Question 2

What is on-road price of a bike?

Accepted Answer

On-road price of a bike = Ex-showroom price + Road Tax (varies by state, 6-12% of ex-showroom) + Insurance (first year premium included, typically Rs 2,000-8,000) + Registration charges (Rs 500-2,000) + Optional accessories and handling charges. On-road price is typically 12-20% higher than ex-showroom price.

Question 3

How much down payment is required for bike loan?

Accepted Answer

Most lenders finance 80-90% of the on-road price of a two-wheeler. Minimum down payment is typically 10-20% of on-road price. For 100% financing (zero down payment), some NBFCs offer loans for salaried individuals with good credit scores. A higher down payment reduces EMI and total interest paid significantly.

Question 4

Should I buy a bike on loan or cash?

Accepted Answer

Buying bike on cash saves the total interest paid (typically 15-35% extra on the bike price over loan tenure). However, if the cash can earn higher returns in investments (say 12% in mutual funds vs 12% bike loan), investing cash and taking loan may make sense. For most people with no immediate investment alternative, cash purchase is cheaper. Use this calculator to compare the exact difference for your situation.

Two Wheeler Loan EMI Calculator India — Bike & Scooter Loan

Two Wheeler Loan EMI Calculator

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