Bikes are one of the most popular modes of transportation in India. Majority of the people own a bike. It may be for different reasons but there is denying the fact that Indians love bikes and scooters. However, the price range of bikes and scooters varies a lot. Additionally, even the cheapest two-wheelers in India cannot be purchased on cash by many people. This is where a two-wheeler loan helps the most. It is important that you know why you should a bike loan even if you can purchase them outright in cash. The reason is that if you were to purchase a bike or scooter in cash, it would require you to spend a chunk of cash at once. That amount can be used for something else, as it is always a good thing to have funds for emergencies. But, you may be wondering about the two-wheeler loan interest rate? Well, you will obviously have to pay interest on the loan, but there are many ways to limit the interest that you may have to pay. The interest rate of the loan is not decided by just the amount of the loan, but a combination of various factors. So, let’s check out the factors that affect the loan interest rate for two-wheelers:



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Factors that affect Interest of Bike Loan

There are a lot of factors that affect the interest rate of the loan, but not all of them affect it in the same manner. Some factors have a greater impact while some factors affect it in a minor way. The factors are:

Amount of the Loan

The amount of the loan is one of the most crucial aspects of a bike loan. If the amount of loan is higher, then the interest rate would also be higher. If the amount is low then the interest rate will also be low. However, for the above condition you should assume that all other factors are constant.

Tenure of the Loan

The tenure of the loan is the duration of the loan i.e. the time in which the loan amount in its entirety including the interest has to be repaid. The tenure of the loan is important because while a longer tenure means a lower interest rate and vice-versa, you may end up paying more if the tenure of the loan is too long. Therefore, it is important to select the perfect tenure of loan to ensure the best interest two-wheeler loan interest rate.

Credit Rating

Like with every other loan, your credit rating is one of the most relevant factors that affect the interest rate. If you have a bad credit rating you will need to pay higher interest or you may not even be eligible for the loan.

Credit History

You credit history should be impeccable to receive the best interest rate. If you have ever defaulted on a loan, then you expect to pay a lot of interest on the loan.

Your Monthly or Annual Income

Your income is also an important factor as it helps the lender in knowing whether you are capable of repaying the entire amount within the given time. If your income is at a sufficient level, then you may be able to receive a better loan rate.

Nature of your Job

The nature of you job or employment is also important. Some lenders provide a lower rate of interest to government employed individuals and farmers. On the other hand, the records of self-employed individuals are scrutinized carefully.

Financial Statements

Your bank account status is also a very important aspect. If you have a sufficient amount of funds in your account, then you can expect a better rate of interest on the bike loan.


Equated Monthly Installments (EMIs) are also crucial. The EMIs, amount of loan, interest rate and tenure of the loan are closely tied together as each of them affects the other. A higher number of EMIs may mean a lower interest rate but the amount could increase.

Instant Two-wheeler Loan with PaySense

If you are looking to buy your dream bike or scooter then a lot of people might tell you to go to a bank for the loan. But, banks have a lot of outdated conditions and regulations in addition to processes that are riddled with redundant procedures. If you do go to a bank to apply for the loan, you should know that a lot of banks do not provide loans for used bikes and scooters. Additionally, depending on the bank, you may not get the loan amount matching the value of the bike. Furthermore, the documentation and approval process of banks take forever to complete. So, in such a scenario the best option for you is PaySense.

PaySense provides instant loan approvals, and once the approval is done, the money is transferred to your account immediately. Also, you can avail loans up to Rs. 2 lakhs for used two-wheelers, and even use any amount remaining from the loan to make repair if needed. Furthermore, you can use the EMI calculator to decide on the perfect EMI, tenure of the loan and interest rate.