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4 Unseen Factors That Affect Your Two-Wheeler Interest Rate

Taking a loan to finance your new two-wheeler is a great option as it takes off the financial burden of paying the entire amount at one time. A 2 wheeler loan comes with a lot of associated benefits like an option to buy even a costly bike and paying the entire amount in small installments. The EMI of a two-wheeler loan is dependent on a lot of factors and you should consider all these factors before you apply for a loan. You can assess the various bike loan interest rates using a two-wheeler loan EMI calculator. Even a small change in the EMI can result in a substantial change in the final interest that you end up paying on the total loan amount. In this article, we will discuss the various factors that affect the bike loan interest rate.

4 Unseen Factors that Affect the Two-Wheeler Interest Rate

1. Credit Score

A credit score is the first thing that a lender goes through to assess the financial viability of the borrower. A credit score or credit report is a parameter that quantifies a person’s financial viability. It is based on the previous financial transactions that you have done. Financial institutions prefer giving loans to people with a good credit score and hence, are ready to offer them a better bike loan interest rate. A score of 750 or above is considered a good credit score.

2. Amount of the Loan

The total amount of loan that you avail of also has affects the rate of the interest rate. The higher the amount of the loan, the higher is the bike loan interest rate. A higher amount of loan means the financial institution is at a higher risk if the borrower defaults on the loan and hence, the rate of interest is high. You can check the rate of interest for different amounts of loans by using a two-wheeler loan EMI calculator.

3. Tenure

The longer the tenure of the loan, the longer is the rate of bike loan interest. This is also very straightforward as the longer you take to pay back the money to the lender, the higher is the risk of the lender losing money. Hence, financial institutions charge a higher rate of interest for a longer tenure of repayment. You can check the different rates of interest for the different tenure of repayment by using a two-wheeler loan EMI calculator.

4. Location

Due to the difference in the tax systems in different states, the manufacturer’s cost of making the bike also varies. Hence, the final price of two-wheeler vehicles varies depending on the location of the dealership. For the same vehicle and model, the 2 wheeler loan amount varies from location to location. This will also lead to variations in the rates of interest.


A 2 wheeler loan is a great financial tool to help in buying the dream bike you have been planning for. The final rates of interest may vary depending on the reasons given above. Do a bit of research on your end to make sure that you get the best deal.

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