Two Wheeler Loan Interest Rates in India (2026): Bank vs NBFC Comparison

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.

Two-Wheeler Loan Interest Rates in India

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:

• Credit score and history
• Employee stability
• Loan tenure and down payment
• Lender Type
• Location of borrower

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.

Two Wheeler Loan Interest Rates of Banks

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:

For eligible customers, banks provide two wheeler loan interest rate range at competitive levels, especially for the new bikes from authorised dealers.

Advantages of Bank loans

• Lower overall interest burden
• Transparent pricing
• Longer repayment tenures

Cons of Bank Loans

• Slower approval timeline
• Strict documentation
• Limited flexibility

Two Wheeler Loan Interest Rates of NBFCs

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.

Advantages of NBFC Loans

• Faster approval
• Minimal paperwork and documentation
• Better access for self-employed people

Cons of NBFC Loans

• Higher bike loan interest rate
• Shorter loan tenures
• Additional processing fees

Banks vs NBFCs Comparison

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:

Two Wheeler Loan Tenures: Impact on the Interest Rate

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.

Role of Credit Score on Two Wheeler Loan Pricing

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:

Maintaining a good repayment history remains essential for accessing the two wheeler loan interest rate at favourable terms

Fixed and Floating Interest Rates

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:

• Fixed rates ensure predictable EMIs.
• Floating rates reduce costs if policy rates fall

Which Option is Better: Bank vs NBFC Two Wheeler Loan

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.

Conclusion

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:

• Transparency
• Faster approvals
• Personalised recommendations

Also Read:
- New Bike Loan vs Used Bike Loan: Which Is Better in 2026?
- How to Apply for Electric Vehicle Subsidy in India