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Two Wheeler Loan Interest Rate & Charges 2024

The bike loan interest rate in India usually range between 0.99% - 28.30% per annum. The below table gives a comparison of interest rates, processing fees, and foreclosure charges offered by various Banks and NBFC's.


Interest Rates

Loan Amount

Processing Fees

Foreclosure charges

Axis Bank

10.80% - 28.30%


Up to 2.5% of the loan amount

5% of principal outstanding

Bajaj Auto Finance

Starting at  7.30%


Starting from 1%

3% flat on principal outstanding+GST, after the second EMI till the end of tenure

Bank of India

6.85% - 8.55%

Up to ₹50 Lakhs

 ₹ 500 - ₹ 10,000

3% – 10% Based on the time of foreclosure



₹5 Lakhs

Up to 2.5% of the loan amount

6% of principal outstanding

L&T Finance

6.49%  onwards

100% of the bike’s value

1% to 4% of the loan amount

At lender’s discretion

Punjab National Bank

8.65% - 10.00% 

₹10 Lakhs

0.5% of the loan amount

3% – 10% Based on the time of foreclosure 

State Bank of India

16.25% - 18.00%

Up to ₹3 Lakhs

2% of the loan amount + GST

At bank’s discretion

Union Bank of India

9.90% - 10.00%

₹10 Lakhs

0.5% of the loan amount

3% – 10% Based on the time of foreclosure

Muthoot Capital

0.99% p.a. onwards

₹3 Lakhs

2% - 6%

At lender's discretion

*Disclaimer: The information presented in the table above is subject to change at the lender’s discretion.

Types of Interest Rate

  • Fixed Interest Rate 

Fixed interest rates remain constant irrespective of the market rate change. If you choose a fixed interest rate of 10%, it will remain the same till the end of the loan tenure.

  • Floating Interest Rate 

The floating interest rates fluctuate depending on the current market conditions. The marginal cost of a funds-based Lending Rate fluctuates with the change in repo rate. So, with time, your floating interest rate, which is linked to this rate, could change accordingly. Floating rates are comparatively lower than fixed rates. So, most of the borrowers choose floating rates for their two-wheeler loans.

Factors that Affect Two Wheeler Loan Interest Rate

  • Annual Income: Most lenders set a minimum income limit to apply for a two wheeler loan. The higher the applicant earns, the lower risk they have of not repaying your loan. If you have a higher level of income, you may get a lower interest rate.

  • Employment Type: The financial institutions offer different bike loan interest rates depending on the applicant being self-employed or salaried. Salaried individuals will be offered bike loans at a lower interest rate compared to the self-employed applicants.

  • Age: The age of the applicant plays a vital role in determining the loan interest rate. If you’re nearing retirement age, you will be charged a higher interest rate because your capacity to repay a loan may be lower compared to young people.

  • Credit Score: One of the most important factors that determine the two wheeler loan interest rate is the applicant’s credit score. If you have a good credit score, you may be able to get a lower interest rate, and a higher interest rate will be charged if you have a bad credit score.


The information and suggestions provided by BFDL hereinabove is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial advice or endorsement of any sort.

The information including interest rates or fees, loan amount and other charges with regard to any product, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks or NBFCs. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any application or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products.

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How to get low bike loan interest rates?

Here are some things you can do to get considerably lower bike loan interest rates:

  • Maintain a good credit history and score

  • Establish a good relationship with your lender

  • Lower your debt-to-income ratio

  • Make a higher down payment

Will my lender change my bike loan interest rate during the tenure?

If you opt for a fixed interest rate, your lender will not change your bike loan interest rate during the tenure.

What are the main factors that affect two-wheeler loan interest rates?

The main factors that affect two-wheeler loan interest rates are your annual income, age, employer, employment type, credit history and your relationship with the lender.

How to compare bike loan interest rates?

The main factors that affect two-wheeler loan interest rates are your annual income, age, employer, employment type, credit history and your relationship with the lender.

If I choose a variable rate, how often will it change?

If you choose a variable rate on your bike loan, the interest rate can change multiple times as it is linked to economic cycles. While there is no fixed time period for variable rate changes, these may happen as often as every month, on a quarterly basis, or annually. If your loan has a long repayment period, the chances of interest rates changing are higher than in the case of shorter tenure.

Will my variable interest rate go above the fixed rate?

Based on market fluctuations and the economic scenario, variable interest rates can go below or above the fixed rate at any given point in time.

Should I always opt for the loan that offers the lowest EMI?

Your loan EMI is calculated based on various factors such as interest rate, loan tenure and principal amount. A low EMI can also mean a longer loan tenure. Thus, you should opt for a loan which is most suitable for you while considering all the factors.

Do NBFCs and banks levy a processing fee when I apply for a two-wheeler loan?

Yes, you are required to pay a processing fee that generally ranges from 0.5% to 6% of the loan amount when you apply for two-wheeler financing.

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