7 Proven Tips to Get The Lowest Two-Wheeler Loan Interest Rate in 2024

The recent surge in the number of two-wheeler on Indian roads can be attributed to several reasons:

  1. A two-wheeler enables you to reach your destination on time, regardless of traffic conditions.
  2. The maintenance cost of a two-wheeler is significantly lower than a car’s.
  3. The availability of affordable bikes on finance has further fueled the growth of this segment.

Bike loans are readily available in today’s market, and they cover almost every type of motorcycle, including adventure, sports, commuter, premium, and electric bikes. You can get up to 100% of your bike’s on-road price as a loan. However, the only thing that can be confusing for customers is the interest rate. Interest rates for two-wheeler loans vary from one financial institution to the other. To ensure you get the best possible terms for your loan, it’s important to understand the intricacies of a two wheeler loan interest rate.

7 Proven Tips to Get The Lowest Two-Wheeler Loan Interest Rate in 2023

Following are some proven tips to get an ultra-low two-wheeler loan interest rate that will help you ride away with significant savings and a hassle-free financial experience in 2024:

  1. Improve Your Credit Score

A credit score is a three-digit number that reflects the creditworthiness of borrowers in India. Financial institutions consider a borrower creditworthy if their credit score is above 750.

If your credit score is 750, you stand a better chance of getting a bike on finance at the lowest rate. However, don’t worry if your score is below the magic figure. You may show your income proof or savings account statement for a better-than-average deal.

Some ways to increase the credit score include timely loan repayments, a healthy credit mix, a low debt-to-income ratio, and frequent credit score monitoring. Make sure you focus on improving your credit score before applying for a loan to avoid unfavourable interest rates when taking a loan.

  1. Choose the Right Type of Interest Rate

Two-wheeler loan interest rates can be fixed and floating. As the name suggests, a fixed-rate bike loan comes with the same interest rate for the entire term. For instance, if you choose a fixed-rate bike loan with a 10% interest rate, you must pay 10% for the whole term.

The second type of bike loan interest rate is the floating rate. The effective rate of a floating-rate loan is dictated by the prevailing Reserve Bank of India-set Marginal Cost of Lending Rate (MCLR). If the RBI increases the MCLR, the cost of your loan will increase, and vice versa.

If you sense an impending fall in the rates, opting for a floating-rate bike loan can help you save some money in the long run. However, opting for a fixed-rate loan is better if the rates are poised for an increase.  

  1. Net Monthly Income

While determining a two-wheeler loan interest rate, financial institutions emphasise the borrower’s net monthly income. Net monthly income refers to your actual spending capacity minus your fixed monthly expenses.

You can get your net monthly income by deducting your fixed monthly expenses from your gross monthly income. You may expect a discounted interest rate if your net monthly income exceeds your financial institution’s minimum threshold.

However, if your income is below the threshold, you may have to submit additional documents to prove you can repay the loan.

  1. Select A Low Debt-To-Income Ratio

The debt-to-income (DTI) ratio is your total debt compared to your net monthly income. For instance, if you earn Rs 50,000 every month and your current monthly debt is Rs 20,000, your debt-to-income ratio will be 40%.

If you want the lowest two-wheeler loan interest rate, keep your DTI ratio as low as possible. A low DTI ratio gives you ample scope to apply for loans or credit cards. It also sends a positive signal to the financial institution about your repayment capability.  

Timely loan repayments and avoiding multiple loans simultaneously are ways to keep your DTI ratio healthy.

  1. Consider Your Employment Type

The type of employment is a major consideration for financial institutions when determining the interest rate of bikes on finance. Generally, they prefer borrowers with a steady monthly income. Since salaried professionals have a fixed monthly income, financial institutions consider them less risky than self-employed professionals or businessmen. So, if you are a salaried professional, you may expect a lower-than-average rate on your bike loan.

Self-employed professionals or business persons can also get the lowest rate if they prove they have a relatively steady income. Also, preparing a business stability proof before applying for a loan is wise.

Another excellent way to keep the rate low is by reducing the loan amount to an extent to which the loan won’t affect your financial condition in any way. Once the financial institution feels satisfied with your repayment capability, nobody can stop you from getting the lowest two-wheeler loan interest rate.

  1. Consider Your Age

The borrower’s age also plays a decisive role in two-wheeler loan interest rate calculation. Young people have a distinctive advantage since they can carry on the loan longer than someone nearing retirement age.

However, this is not a set rule. If you are nearing retirement but have a high credit score or maintain good relations with the financial institution, they may also offer you a discounted rate.

So, it is wise to consult with the financial institution to check how much weight they give to the borrower’s age before finalising the bike loan.

  1. Choose a Shorter Repayment Term

A bike loan generally comes with a maximum repayment term of 48 months. Your EMI amount will be affordable if you choose the highest possible tenure.

However, it may also have a higher interest rate since the financial institution’s risk period will be higher. In contrast, if you opt for a shorter tenure, your financial institution may reduce the interest rate. But you must factor in the increased EMI amount before opting for a shorter repayment term.


The interest rate affects any kind of loan significantly. If the rate is high, you spend more, and vice versa. But, if you are well-informed, you can get the lowest rate without hassle.

Follow the tips mentioned in this article to increase your creditworthiness and ride your dream bike without worrying about money. Also, thoroughly research and compare loan offers from different financial institutions to make informed decisions in the long run.

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