Whether it’s your first ride or your fifth, buying a two-wheeler comes with a special kind of excitement. It’s freedom on two wheels—minus the long waits and high upfront costs. That’s why more and more people today are turning to bike EMIs as a smarter way to finance their purchase.
But before you sign the dotted line or swipe that pre-approved offer, it’s important to understand how EMIs actually work and what to watch out for.
Here’s a simple breakdown of what you should know when buying a bike on EMI.
What Do Lenders Look For?
Before you get that loan approved, lenders usually evaluate:
- Your age (typically between 21–60 years)
- Your income stability (salary slips, bank statements, or ITRs)
- Your credit score
- Basic KYC documents: Aadhaar, PAN, address proof
If your records are clean and consistent, approval is often quick—sometimes even on the same day.
Key Factors That Affect Your EMI
Not all EMIs are created equal. These variables make a big difference:
- Loan Amount: Usually based on the bike’s on-road price, including insurance and taxes.
- Interest Rate: Varies depending on the lender and your credit profile.
- Tenure: Longer duration = smaller EMI, but more total interest.
- Processing Fee: One-time charges added to the loan amount or collected upfront.
For example, Ujjivan SFB’s Two-Wheeler Loan offers financing up to 95% of the on road price, flexible tenures, faster approval and minimal documentation, designed to make two-wheeler loans more accessible for salaried and self-employed customers alike.
Down Payment or 90% Finance?
Some lenders require a minimum down payment—say, 10–20% of the bike’s cost—while others offer zero down payment options.
Which is better?
- If you can afford it, paying something upfront lowers your loan burden.
- Zero down payment loans sound great but usually come with higher interest rates or processing fees.
A small initial outflow can actually save you more in the long run.
Fixed vs Floating Interest
- Fixed Rate: Your EMI remains the same through the tenure. Ideal for short-term loans.
- Floating Rate: EMI may change depending on market rates. Suitable for flexible budgets or longer tenures.
For most two-wheeler buyers, fixed interest gives better predictability.
Are There Hidden Charges?
It’s easy to focus on EMI numbers and overlook fine print. Make sure to ask about:
- Processing fees
- Prepayment or foreclosure charges
- Penalty for late EMI
- Compulsory insurance or bundled add-ons
Always get a full cost breakdown—including what you’ll actually take home after deductions.
Don’t Ignore Your Credit Score
Your CIBIL score plays a big role in loan approval and interest rates. A score above 750 often gives you better terms. If your score is lower, you may face:
- Higher interest rates
- More documentation
- Lower approved amount
Also, paying EMIs on time helps build your credit for future loans.
Can You Pay It Off Early?
Many banks allow you to prepay the loan either in part or full, after a lock-in period (usually 6–12 months). This helps reduce your interest outgo if you’ve received a bonus or saved up extra.
But check:
- Are there any prepayment charges?
- Does it reduce your EMI or just your loan tenure?
Early repayment is great, but only when the math works in your favor.
Documents You’ll Need
Here’s a basic checklist:
- Proof of identity (Aadhaar, PAN, voter ID)
- Proof of address (utility bill, rental agreement)
- Proof of income (salary slips, bank statements, ITR)
- Proforma invoice from the bike dealership
Some lenders may also ask for a passport-sized photo or references.
Use an EMI Calculator Before Committing
An EMI calculator helps you plan better by showing:
- Monthly installment based on loan amount, tenure, and interest rate
- Total interest payable
- Best loan tenure for your monthly budget
Ujjivan SFB offers an online EMI calculator on its Two-Wheeler Loan page to help you make an informed choice.
Final Thoughts
A two-wheeler can be life-changing—whether it’s helping you cut down commute time, explore weekend rides, or get to work without relying on public transport. But buying it on EMI means making a long-term financial commitment.
Always compare, calculate, and read the fine print. And once you’re ready, a trusted lending partner—like Ujjivan Small Finance Bank—can make the process smooth from application to ignition.
