Thinking of buying a new bike in 2025? You’re in good company. Two-wheelers continue to be one of the most affordable, practical and convenient ways to commute across Indian cities and towns. With the right bike loan, you can bring home your dream ride without putting pressure on your savings.
This guide covers everything you need to know about two-wheeler loans in India in 2025 — current interest rates, eligibility, documentation, loan features, EMI examples, smart ways to reduce your loan cost, and a complete step-by-step process to apply online.
Interest Rate Landscape in 2025
Two-wheeler loan interest rates vary significantly depending on the lender (bank vs NBFC), your credit profile and the loan product.
General Rate Range (2025)
- Banks (ICICI, HDFC, Axis, etc.): Starting around 9–10% p.a.
- NBFCs (Bajaj Finserv, others): Can range from low double digits up to 20–30% p.a. for riskier profiles or unsecured schemes.
Banks typically offer lower rates to salaried applicants with strong credit scores, while NBFCs may charge higher rates but provide faster processing or flexible features.
Macro Interest Rate Context
In October 2025, the RBI repo rate is around 5.50%.
While this influences borrowing costs in the economy, retail bike loan interest rates do not directly mirror repo rate changes. Factors like your credit score, lender policies, risk assessment and competition also impact your final offer.
Typical Two-Wheeler Loan Features
Loan Amount
- Many lenders offer up to 100% financing on selected bike models.
- Eligibility depends on model, credit profile and lender policy.
Tenure
- Usually 6 months to 60 months, sometimes up to 84 months.
Processing Fee
- Typically 0.5%–4% of the loan amount.
- Some NBFCs may charge fixed documentation or hypothecation fees.
Prepayment / Foreclosure
- Banks often allow prepayment with low or no penalty (especially on floating-rate loans).
- NBFCs may charge a fee — always confirm.
Security
- The bike is hypothecated to the lender until the loan is fully repaid.
- Getting the NOC after loan closure may involve a small fee.
Eligibility Criteria
Most lenders follow similar eligibility checks:
- Age: 18–70 years
- Income:
- Salaried: 6–12 months in current job
- Self-employed: 1–2 years of business continuity
- Credit Score: 700+ is ideal for the lowest interest rates
- Residence: Proof of address stability may be required
Documents Required
For Salaried Applicants
- Aadhaar / PAN / Passport / Driving Licence
- Address proof (Aadhaar, utility bill, voter ID, passport)
- Last 3 months’ salary slips
- Last 3–6 months’ bank statements
- Employer ID card or employment proof
For Self-Employed
- Identity & address proof
- Income: Latest ITR (1–2 years), bank statements (6–12 months)
- Business proof (registration / shop licence)
- Vehicle invoice & registration documents at disbursal
EMI Examples (Easy Calculation)
Example 1
Loan: ₹1,00,000
Rate: 10.5% p.a.
Tenure: 5 years
Estimated EMI: ₹2,150–₹2,200
Example 2
Loan: ₹1,00,000
Rate: 18% p.a.
Tenure: 5 years
Estimated EMI: ₹2,650–₹2,700
Small changes in interest rate significantly affect your total interest. Always check EMI calculators from banks like ICICI, HDFC or Axis.
How to Get the Lowest Possible Interest Rate
- Improve your credit score: Keep credit utilisation low, pay dues on time, avoid defaults.
- Choose banks if you have a strong profile: They often offer lower rates than NBFCs.
- Opt for shorter tenure: Higher EMI but lower total interest paid.
- Negotiate processing fees: Many lenders offer festive or dealership discounts.
- Check OEM/dealer finance schemes: Manufacturers sometimes offer subsidised rates.
- Watch RBI signals: When RBI hints at easing, lenders may reduce retail loan rates.
Banks vs NBFCs vs Fintech Platforms
Banks
- Lower interest rates for good credit profiles
- Stricter approval process
- Transparent foreclosure rules
NBFCs
- Faster approval and strong dealer partnerships
- Flexible repayment and high financing options
- Higher rates for riskier applicants
Fintech Platforms
- Great for comparing multiple lenders instantly
- Useful for pre-approved offers and quick decisions
Red Flags to Avoid
- Very low advertised rate but high processing or hidden charges
- No clear foreclosure policy
- Dealers pushing unnecessary add-ons like extended warranty or bundled insurance
- Vague NOC process
How to Apply for a Bike Loan Online (Step-by-Step)
- Choose your bike model & check on-road price
Includes insurance, registration and taxes. - Compare lenders (2–3 options)
Use bank/NBFC EMI calculators. - Check online eligibility
Many lenders offer instant pre-approval. - Gather documents
Identity, address, income proof and bank statements. - Apply online or through the dealer
Dealers often coordinate paperwork with lenders. - Review sanction letter carefully
Check interest rate, processing fee, EMI, tenure and foreclosure terms. - Submit documents & complete verification
Disbursal is usually fast after verification. - Take delivery of the bike
Hypothecation will be recorded in RC. - Keep copies of all documents
EMI schedule, loan agreement, NOC after closure.
FAQs
Q: Can I get 100% on-road funding?
Yes, some banks and NBFCs offer 100% finance for selected models and eligible customers.
Q: Can I prepay the loan anytime?
Banks often allow easy prepayment; NBFCs may charge fees — check your sanction letter.
Q: Does repo rate affect my EMI?
Only if your loan is on a floating interest rate; most bike loans are fixed-rate.
Conclusion: Two-Wheeler Loan in 2025
To get the best deal:
- Start by improving your credit score
- Compare APR (effective annual cost), not just headline rate
- Choose tenure according to your cash flow
- Compare offers from banks, NBFCs and fintech platforms
- Read all terms carefully before signing
A well-chosen two-wheeler loan can make your bike affordable, manageable and hassle-free.