If you're considering purchasing a two-wheeler in India, securing a loan from a reputable financial institution can make the process smoother and more affordable. Several banks and financial institutions offer competitive two-wheeler loan schemes tailored to meet diverse customer needs. Here's a comprehensive overview of the top 10 two-wheeler loan providers in India, including HDFC Bank, SBI, Central Bank of India, Jammu & Kashmir Bank, Indian Overseas Bank, and Kotak Mahindra Prime Limited, among others.

Top 10 Two-Wheeler Loan Companies in India

HDFC Bank

HDFC Bank provides both personal and two-wheeler loan options to cater to diverse financial requirements. HDFC Bank’s two-wheeler loan options are particularly popular for their flexibility and customer-centric features. These loans are designed to help individuals finance the purchase of new and used motorcycles, scooters, and mopeds with ease. The bank offers competitive interest rates, ensuring that borrowers can manage their repayments comfortably without being burdened by high monthly payments.

SBI

The State Bank of India (SBI) stands as one of the leading public sector banks in the country, offering a comprehensive suite of financial solutions. Notably, it provides tailored loan offerings for individuals seeking to finance two-wheelers or superbikes, featuring competitive interest rates under two specialized schemes: the Two-Wheeler Lite Scheme and the Superbike Loan Scheme.

The Two-Wheeler Lite Scheme offers interest rates starting at 16.25% per annum, with a maximum loan amount of INR2.5 lakh and a repayment tenure of up to 3 years. In contrast, the Superbike Loan Scheme is designed for higher-end models, with interest rates beginning at 10.25% per annum, a minimum loan amount of INR2.5 lakh, and a repayment period of up to 5 years.

Central Bank of India

The Central Bank of India offers two-wheeler loans at competitive interest rates. These loans come with several key benefits, including the option to add co-applicants to enhance loan eligibility, no guarantor requirement for employees of state/central government and public sector undertakings (PSUs), and special festive offers, including zero processing charges, available from time to time. These features make the Central Bank of India’s two-wheeler loan an attractive and accessible financing solution for a wide range of customers.

Jammu & Kashmir Bank

Jammu and Kashmir Bank (J&K Bank) offers specialized two-wheeler loan products aimed at assisting customers in financing the purchase of a wide range of two-wheelers, including new battery-operated scooters, mopeds, motorcycles, and traditional scooters. With a focus on making mobility more accessible, J&K Bank provides tailored financial solutions to meet the evolving needs of its customers in both urban and rural markets.

Indian Overseas Bank

Indian Overseas Bank (IOB) provides two-wheeler loans under the name "Pushpaka Loans," aimed at assisting customers in purchasing new or pre-owned two-wheelers. These loans come with several attractive features, including competitive floating interest rates, easy and quick approval, and flexible repayment terms. Notable highlights of IOB’s two-wheeler loan offering include lower loan amounts, minimal documentation requirements, and a simplified application process.

Kotak Mahindra Prime Limited

Kotak Mahindra Prime Limited has successfully launched its loan business and has since expanded its portfolio to cater to a wider range of vehicle financing needs. With a customer-centric approach, competitive interest rates, and a simplified loan application process, Kotak Mahindra Prime has established itself as a reliable financing partner for individuals seeking quick and hassle-free vehicle loans. The company continues to strengthen its presence in the Indian market by leveraging technology, expanding its distribution network, and offering customized solutions that meet the evolving needs of modern consumers.

Axis Bank

Axis Bank Limited, previously known as UTI Bank from 1993 to 2007, is a leading Indian multinational banking and financial services institution headquartered in Mumbai. The bank offers a wide range of financial services to large and mid-sized corporations, small and medium enterprises (SMEs), and retail customers. It has established a strong presence in the retail lending space, including offering two-wheeler loans designed to make bike ownership more accessible and affordable. With a reputation for customer-centric services and competitive financial products, Axis Bank positions itself as a reliable and efficient partner for financing two-wheelers across urban and rural India.

Punjab National Bank

Punjab National Bank (PNB), a government-owned bank based in New Delhi, was established in May 1894. It is the second-largest public sector bank in India by business volume, serving over 180 million customers across 12,248 branches. PNB also operates a banking subsidiary in the UK (PNB International Bank, with seven branches), along with branches in Hong Kong, Kowloon, Dubai, and Kabul. Punjab National Bank is a public sector undertaking (PSU) in India, operating under the government of India and regulated by the Reserve Bank of India Act, 1934, and the Banking Regulation Act, 1949. Punjab National Bank (PNB) provides two-wheeler loans through offerings such as PNB Saarthi and PNB Power Ride. These schemes offer financing for purchasing new two-wheelers, including scooters, motorcycles, and mopeds, contingent upon the vehicle's registration with the RTO.

Union Bank of India

Union Bank of India (UBI) is a public sector bank based in Mumbai, serving over 153 million customers. Union Bank of India (UBI) offers two-wheeler loans as part of its comprehensive range of financial products aimed at making vehicle ownership accessible to a wide spectrum of customers. The bank provides financing for the purchase of new two-wheelers, including motorcycles, scooters, and mopeds, with attractive features and flexible repayment options. These loans are designed to cater to both urban and rural customers, with competitive interest rates and minimal documentation.

UBI’s two-wheeler loan offerings come with a quick approval process, ensuring that customers can get the necessary funds promptly. The loan tenure is customizable, allowing borrowers to choose the duration that suits their financial situation. Union Bank also provides easy and convenient repayment options through various channels, making it more accessible for customers.

In addition, the bank offers loans to individuals, as well as to self-employed professionals, students, and salaried employees, further enhancing the accessibility of these loans. For customers looking to purchase a new two-wheeler, Union Bank of India offers a reliable and straightforward financing solution, making it a prominent player in the Indian two-wheeler loan market.

Jana Small Finance Bank

Jana Small Finance Bank, headquartered in Bengaluru, is a prominent player in India's financial landscape, focusing on providing accessible banking services to underserved segments. As part of its comprehensive suite of financial products, the bank offers two-wheeler loans designed to make personal mobility affordable and convenient for a diverse customer base. Key features of Jana Small Finance Bank’s two-wheeler loans include High Loan-to-Value (LTV), flexible loan amounts, competitive interest rates, minimal documentation, flexible repayment tenure, quick processing, etc.

Pros and Cons of Two-Wheeler Loans

Financing the purchase of a motorcycle, scooter, or moped through a two-wheeler loan can be an effective solution, particularly when the full purchase amount is not readily available. However, as with any financial commitment, it is important to carefully consider both the benefits and potential drawbacks before proceeding. Outlined below are some of the key advantages and disadvantages associated with taking out a two-wheeler loan:

Pros of Two-Wheeler Loans

Affordable Monthly Payments: One of the biggest advantages of a two-wheeler loan is that it allows one to break down the cost of vehicle into smaller, manageable monthly payments. This can help one own a two-wheeler without strainingr finances, as opposed to paying the entire amount upfront.

Easy Loan Approval Process: Compared to other types of loans, two-wheeler loans typically have a simpler and quicker approval process. Financial institutions usually require minimal documentation (such as KYC documents) and offer faster processing times, making it convenient for customers.

Flexible Loan Tenure: Two-wheeler loans often come with flexible repayment tenures that can range from 12 to 60 months, depending on your financial situation. This flexibility helps borrowers choose a repayment period that aligns with their monthly budget.

Lower Interest Rates: Interest rates on two-wheeler loans are typically lower than personal loans and credit card financing, making them an affordable borrowing option. Many banks and financial institutions offer competitive rates, particularly if one has a good credit score.

No Collateral Required: In most cases, two-wheeler loans are unsecured, meaning no don’t need to pledge any assets as collateral. This reduces the risk for borrowers and allows one to secure the loan without the fear of losing personal property.

Boosts Credit Score: If one makes timely repayments, a two-wheeler loan can help improve the credit score. Responsible loan management can reflect positively on the credit profile, making it easier to secure loans in the future.

Accessibility for a Wide Range of Customers: Two-wheeler loans are available to various categories of borrowers, including salaried employees, self-employed individuals, and even students or first-time buyers, making it easier for people from different walks of life to access financing.

Variety of Financing Options: Many banks and non-banking financial companies (NBFCs) offer specialized two-wheeler loan schemes, including loans for electric vehicles, and can sometimes even provide financing for pre-owned bikes. This variety provides flexibility and choice for potential borrowers.

Cons of Two-Wheeler Loans

Interest Payments Add Up: Although the interest rates on two-wheeler loans are generally lower compared to personal loans, they still add up over time. The total interest paid over the course of the loan can significantly increase the overall cost of the vehicle.

Risk of Defaulting: Missing loan repayments or defaulting on a two-wheeler loan can lead to financial penalties, higher interest rates, and damage to the credit score. Repeated defaults can also result in the seizure of the vehicle if the loan was secured with collateral.

Loan Processing Fees: Most financial institutions charge a processing fee for approving a two-wheeler loan, which can range from 1% to 3% of the loan amount. While this fee is not usually too high, it can add to the overall cost of borrowing.

Down Payment Requirement: Many lenders require a down payment (usually 10% to 20% of the vehicle price) for a two-wheeler loan.

Additional Insurance and Maintenance Costs: Some lenders may require one to purchase comprehensive insurance for the two-wheeler, which can increase upfront costs. Additionally, one still need to consider ongoing maintenance and operational expenses, which can impact the finances in the long term.

Limited Loan Amount: Two-wheeler loans usually have a cap on the loan amount, which may not cover the entire cost of a high-end or luxury motorcycle.

Prepayment Penalties: Some lenders may impose a prepayment penalty if one chooses to pay off the loan earlier than the scheduled term. This could discourage him from clearing the debt ahead of time, limiting the financial flexibility.

Eligibility Criteria: Despite being relatively accessible, two-wheeler loans still come with eligibility criteria such as age limits, minimum income requirements, and a satisfactory credit score.

According to TechSci Research report “India Two-Wheeler Loan Market By Type (New Two Wheeler, Used Two Wheeler), By Provider Type (Banks, Non-Banking Financial Companies, Original Equipment Manufacturer, Others), By Percentage of Amount Sanctioned (Less Than 50%, More Than 50%), By Tenure (Less Than 3 Years, 3 Years, More than 3 Years), By Region, Competition, Forecast & Opportunities, 2020-2030F,” India Two-Wheeler Loan Market was valued at USD 8.34 billion in 2024 and is expected to reach USD 14.89 billion by 2030 with a CAGR of 6.78% during the forecast period. This growth in the market is driven by various factors, including rise in disposable incomes and affordability, urbanization and traffic congestion, etc.

Factors Driving the Growth of India Two-Wheeler Loan Market:

1.Rising Disposable Incomes and Affordability

India’s growing middle class is progressively gaining the financial capability to own personal vehicles, with two-wheelers emerging as a practical and economical choice. Their relatively low upfront cost and minimal maintenance requirements, especially when compared to four-wheelers, make them an attractive option. As income levels rise, many middle-class consumers are now able to invest in more premium two-wheelers that offer advanced safety features, enhanced fuel efficiency, and the latest technological innovations.

2. Urbanization and Traffic Congestion

Rapid urbanization has led to increased traffic congestion, making two-wheelers an attractive option for daily commuting. They offer flexibility, fuel efficiency, and ease of parking, especially in densely populated areas where public transportation may not be convenient.

3. Government Initiatives and Policy Support

The Indian government has introduced various initiatives to promote vehicle ownership, including subsidies for electric two-wheelers, tax exemptions, and schemes to encourage financial inclusion. Additionally, the government's push for infrastructure development, such as better road networks and charging stations for electric vehicles, further boosts consumer confidence in purchasing two-wheelers.

4. Financing Accessibility and Digital Transformation

The availability of easy financing options, including low-interest rates, flexible loan tenures, and minimal documentation, makes it easier for individuals to purchase two-wheelers despite their limited savings.

5. Technological Advancements and Electric Two-Wheelers

Technological advancements, such as the shift from combustion engine vehicles to electric vehicles, new product launches, and subsidies offered by the government on the purchase of electric vehicles, are boosting the sales of two-wheelers across the country. Two-wheelers offer a preferred transport option for short-distance commutes in India.

6. Strong Rural and Semi-Urban Demand

The demand for two-wheelers in rural and semi-urban regions of India has been steadily growing, driven by several socio-economic and infrastructural factors. In fact, over 60% of two-wheeler sales in the country now originate from tier 2 and tier 3 cities, as well as rural areas. This significant shift reflects the changing mobility needs of these regions, where two-wheelers are becoming the preferred mode of transport due to their affordability, convenience, and adaptability to local conditions.

Conclusion:

In conclusion, selecting the right two-wheeler loan provider in India is essential for making a well-informed and financially prudent decision. Whether opting for established institutions such as HDFC, SBI, or considering emerging players like Kotak Mahindra Prime, each lender presents distinct advantages tailored to various customer requirements. Key factors such as interest rates, repayment terms, processing fees, and eligibility criteria differ among these providers, making it imperative to thoroughly evaluate the financial standing before finalizing a loan. By carefully assessing these top 10 two-wheeler loan providers, one can secure a loan that aligns with one’s financial objectives, ensuring a smooth path toward acquiring desired two-wheeler.