Check updated bike loan interest rate trends in India. Compare bank and NBFC two wheeler loan interest rate, processing time, and which lender suits you best. Read our blog.
Anjali Singh
Assistant Manager
Two-wheelers remain one of the most practical transport solutions as they are affordable, fuel-efficient, and well-suited for navigating congested urban roads. Purchasing a bike becomes more affordable with financing, and it has also become a popular choice. While many financing options are available, the two wheeler loan interest rate plays an important role in determining the cost of ownership.
There are mainly two widely used choices, which include banks and Non-Banking Financial Companies (NBFCs) for bike loans. Each option has its own advantages and limitations. They differ quietly in terms of pricing, eligibility criteria and processing time. It is very important for one to understand how the bike loan interest rate differs between banks and NBFCs. This article covers the detailed comparison between banks and NBFCs’ two-wheeler loans.
The Indian two-wheeler finance market has improved significantly over the past few decades. In 2026, most lenders are using credit scores, digital KYC and other income analytics to price their loan interest rate more accurately. As a result of this one, the 2 wheeler loan interest rate can vary significantly based on the borrower, the credit history, and also the vehicle category. Some factors that influence Interest rates are listed below:
Generally, borrowers with a strong credit profile are more likely to get access to the lowest two wheeler loan interest rate along with more favourable terms.
Public and private sector banks remain a preferred choice for borrowers with a very good credit score. These are directly regulated by the Reserve Bank of India (RBI) and generally offer lower rates of interest but with stricter eligibility criteria. The following table shows the bike interest rate ranges:
|
Bank Type |
2 Wheeler Loan Interest Rate Range (p.a.) |
|
Public sector |
7.85% - 12.65% |
|
Private sector |
8.50% - 14.50% |
For eligible customers, banks provide two wheeler loan interest rate range at competitive levels, especially for the new bikes from authorised dealers.
Non-banking financial companies gained popularity because of their faster processing rates and customer-friendly approach. Even though the two wheeler loan interest rate can be higher than that of banks, they compensate with relaxed eligibility norms.
The 2 wheeler loan interest rate can range between 12.50% to 31% p.a.
NBFCs are often preferred by borrowers who are seeking quick disbursal or those who are unable to meet the banks’ eligibility criteria, even if there is a high bike finance interest rate.
There are several parameters to be considered while comparing the interest rates of banks and NBFCs. Some of the common differences between banks and NBFCs include:
|
Aspect |
Banks |
NBFCs |
|
Average 2 Wheeler Loan Interest Rate |
Lower |
Higher |
|
Approval speed |
Slower |
Faster |
|
Credit Score |
Should be high |
Flexible with score |
|
Documentation |
Extensive |
Minimal |
The loan tenure plays an important role in determining both the monthly EMI and the overall interest cost of a two-wheeler loan. In India, two-wheeler loan tenures typically range from 12 months to 60 months, depending on the lender, borrower profile, and vehicle type.
While the bike loan interest rate itself may remain the same across tenures, longer loan tenures usually lead to a higher total interest outgo, as interest is charged over an extended period. Shorter tenures, on the other hand, may result in higher EMIs but help reduce the overall cost of borrowing.
Banks generally offer longer and more flexible tenures to borrowers with stable income and strong credit profiles. NBFCs may provide shorter tenures, particularly for used two-wheelers or borrowers with limited credit history, which can further influence the effective cost of the loan.
Borrowers should carefully balance EMI affordability and total interest payable when selecting a loan tenure, rather than focusing only on the two wheeler loan interest rate.
While many ignore their credit score for two-wheeler loan pricing, it plays a major role in deciding the expected interest rate. Credit scores continue to be the most important aspect to determine the 2 wheeler loan interest rate in India.
Generally, a score above 750 is considered a good score and is eligible for the lowest bike loan interest rate. On the other hand, a score below 650 may lead to higher pricing on loans. The following table shows the credit score and expected loan interest rate:
|
Credit Score |
Expected Interest Bike Loan Interest Rate |
|
750+ |
8.50% - 10% |
|
700-749 |
10% - 13% |
|
Below 700 |
14% and above |
Maintaining a good repayment history remains essential for accessing the two wheeler loan interest rate at favourable terms
Most two-wheeler loans offered in India are offered at a fixed rate of interest. But there are a few lenders offering a floating interest rate on bike loan offers.
The main difference:
There is no one better option for getting a two-wheeler bike loan, as the needs of the borrower may vary over time. Banks are suitable for individuals who are salaried and have a stable income, whereas NBFCs are suitable for borrowers who need more flexibility in terms of eligibility, processing time, and such. Those who are searching for the cheapest bike loan should compare the offers across both the lender categories and choose the best one before finalising.
It is very important for one to understand the difference between the bank’s loans and NBFC loans. Choosing the right lender goes beyond the numbers. While the two wheeler loan interest rate becomes a crucial factor, there are several other parameters to consider, such as the processing fee, tenure flexibility, and repayment convenience.
My Mudra plays an important role by simplifying the process of comparing multiple loan offers from leading lenders on a single platform. With ensure:
Also Read:
- New Bike Loan vs Used Bike Loan: Which Is Better in 2026?
- How to Apply for Electric Vehicle Subsidy in India
The average loan interest rate depends on the lender and borrower profile. Banks generally offer lower interest rates when compared to NBFCs. For instance, the average rates for banks lie between 7.85% and 14.50%.
Yes. With a high down payment, the lender’s risk is reduced, and it may help to secure better interest rates, especially from banks.
Yes, NBFC loans are well-suited for first-time buyers, especially those with a low credit score or limited history. NBFCs often have more flexible eligibility criteria.
Longer tenures may increase overall interest cost, though EMIs become more manageable.
Most lenders allow prepayment, but some may charge foreclosure fees. Always review loan terms carefully.
Assistant Manager
Hey there, I'm Anjali Singh. With over 6 years of experience in finance, I specialize in creating content on banking, loans, and financial planning. My goal is to simplify complex financial topics and help readers make informed decisions through my articles.
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