If you are hard pressed for finances to buy a two-wheeler of your choice then consider applying for a two wheeler loan. A loan is the amount of money given by a lender on which they charge interest. Both the principal amount and the interest have to be paid through monthly EMIs. With a small down payment, you can purchase your dream bike or scooter with easy finance available from banks and private lenders. India is experiencing a boom in the automobile industry and reasonable two-wheeler interest rates are attracting buyers from every part of the country to apply for a two wheeler loan.

Interest rates on two-wheeler loans vary from bank-to-bank. They also depend on the type of vehicle you intend to purchase. Each category of vehicle attracts different interest rates whether it is a scooter or a high-end bike. Your financial status also has an impact on the interest rates being offered by the banks. Salaried individuals are usually offered lower interest rates in comparison to self-employed individuals. Your income is one of the parameters to determine your credibility for repayments and therefore affects the interest rate you will be charged.

Before you decide to get a Two-Wheeler Loan, there are several factors you should take into consideration for availing suitable offers from banks or NBFCs:

• To get the best deal on two-wheeler loans your first step should be to do an online search by visiting the web portals of various banks and private lenders. Then, you can compare the interest rates and calculate monthly EMIs using the Two-Wheeler Loan EMI Calculator. 

• Make calls to bank representatives and bargain for best interest rates and also understand the overall cost involved in getting the two-wheeler financed.

• Check the nature of the loan whether it is on a fixed or floating rate of interest. Make use of the calculator to calculate the affordability of the monthly installment amount.

• Loan tenor is an important factor in two-wheeler finance; therefore choose the tenor that fits your budget. If you have surplus funds available then go for a shorter tenor which will have higher monthly EMIs. If you are working on a small budget then choose a longer tenor which will have lower monthly EMIs.

• Several banks cover vehicle insurance and registration in the loan amount. Therefore carefully check these features and details before making a decision.

• Your income status, good credit score, and excellent payment track record will give you leverage to bargain for better interest rates on two-wheeler loans.

• Some banks offer special rates for two-wheeler loans during the festive/year-end season. You can always explore this option and time your purchase accordingly.

• Make sure to check the popular offers like zero processing fee and free accessories offered by lenders and automobile manufacturers.

• Do not over borrow. Fix monthly EMIs which you can pay comfortably every month. Over-borrowing can increase monthly EMIs and badly affect your budget and repaying capacity.

• Strictly follow the repayment plan through ECS clearing of EMIs so that you never default. Opt for a plan that allows flexible EMIs and grace periods.

It is important to use the ​EMI loan calculator to know if the repayment amount you have to pay is possible for you. Change the tenor, principal amount, etc. to calculate the exact amount you are comfortable paying. Be very sure of the repayment amount, as defaulting on even one payment can result in a high penalty. Shortlist the lender who provides quick disbursal of two wheeler loan. Once you submit all the documents, the disbursal should not take more than five working days as this is the usual turnaround time.