Two-wheeler loan interest rates – Banks vs NBFCs

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Two-wheeler loan interest rates – Banks vs NBFCs

If you want to purchase a new two-wheeler today, you don’t have to sort out your finances or rummage through your account statements to get your affairs in order. With three-fourths of two-wheeler owners financing their purchase through bike loans in the country, applying for a two-wheeler loan has become easier than ever. Furthermore, banks and NBFCs have digitalised and streamlined the application process. You won’t have to physically visit any branch office or stand in long queues to submit your documents. Instead, you can apply for a bike loan online, and get immediate access to the funds required to purchase your dream two-wheeler.

However, one of the pertinent questions that often stump prospective bike owners is – should you choose a bank or an NBFC? A closer look at the bike loan interest rates offered by both institutions can give us the answer.

Differences between interest rates offered by banks and NBFCs

At the outset, you might think that the interest rates offered by both institutions will be the same. However, the reality is different. Typically, NBFCs can offer better bike loan interest rates – and better bike loan terms in general – for a couple of reasons.

  • Ruling Acts

Both banks and non-banking financial companies (NBFCs) are regulated by the country’s central bank responsible for regulating the Indian banking system – RBI. However, the ruling acts are different. NBFCs are registered under the Companies Act, 1956, which allows them to be more flexible with their terms and conditions. On the other hand, the Banking Regulation Act, 1949 regulates all the banking institutions in the country. Thus, all banks fall under the purview of the RBI and have to act in accordance with its guidelines.

  • How the Ruling Acts affect the interest rates

The interest on bike loans – and the interest on all loans in the country offered by the banks – vary according to RBI’s policy rate changes, along with the market forces. Thus, bike loan interest rates are often quite high. NBFCs, on the other hand, offer extremely competitive interest rates, which are affected by other factors, such as the retail prime lending rate (RPLR).

Because of this reason, NBFCs tend to offer attractive bike loan terms, including nominal bike loan interest rates. Additionally, they aren’t as stringent as banks when it comes to eligibility criteria and has shorter processing and approval times.

Two-wheeler loans offered by banks vs. NBFCs

Let us take a closer look at the interest rates offered by a few leading banks and non-banking financial companies.

Banks vs. NBFCs – At a glance

From the table provided above, it is clear that the interest rates offered by NBFCs are more competitive than the interest rates offered by banking institutions. While certain banks provide nominal interest against the two-wheeler loan, the interest rates generally tend to be on the higher side. NBFCs, on the other hand, prioritise consumer convenience and offer better loan terms. Additionally, you can enjoy several benefits such as speedy processing and instant loan disbursal, loans against low credit scores, longer repayment periods and minimal down payment.

It is also prudent to go through the features and benefits of bike loans offered by banks and NBFCs before making a decision. You can use bike loan EMI calculators provided online to calculate the EMI amount, and the total interest amount you will eventually repay on top of the principal loan amount. You can significantly reduce the loan burden and enjoy nominal interest rates by putting up a higher upfront payment (down payment).

If you are looking for the best bike loan interest rates in the country, you can visit Bajaj Markets and go through the interest rates being offered by banks and NBFCs. Once you find the ideal loan repayment terms that align with your needs, you can easily apply for a bike loan online. You can fill up the application form, provide basic details and upload KYC documents to finish the application process within minutes. This will allow you to own your dream two-wheeler without any further delay.

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