A two-wheeler loan can help you buy the desired scooter or a motorcycle and can be repaid in equated monthly instalments (EMIs). It is a kind of secured loan. So, you need to pledge an asset (here, a vehicle) to the lending bank when you apply for the loan. The process is known as hypothecation. The lender will keep the vehicle as security or collateral until you repay the loan.

When you purchase a bike with a loan, the vehicle gets registered in your name at the Regional Transport Authority (RTO). The two-wheeler’s registration certificate will also be in your name. However, the certificate will contain a note that mentions that your vehicle is in the bank’s favour. That’s because the bank technically owns the car until you pay off the EMIs.

Who Can Apply for a Two-Wheeler Loan?

A top lending bank offers bike loans to both salaried and self-employed applicants. The borrower usually should be:

  • An Indian resident
  • Over 21 years old
  • Having a co-applicant if the borrower is 18-21 years old

How Can You Apply?

First, you can keep the necessary documents ready for the application process. These often include:

  • Your passport-size photograph
  • Your valid identity/address proof (Aadhaar card, Passport, Voter Id or Driver’s license)
  • Loan application form

You need not necessarily visit the bank’s branch to apply for the loan or avail attractive bike loan interest rates. If you choose a bank whose branches are spread across India, one of their representatives can help you in your city.

You can even apply for the loan on the bank’s mobile app or website and simply fill out the online application form. In this mode, you can get a two-wheeler loan online approval immediately. At empanelled dealerships, the bank’s Sales Officer would contact you soon after approval to further process the loan.

Alternatively, you can visit any of the bank’s partner 2-wheeler showrooms. One of the representatives would help you carry out all the necessary formalities. You will learn on the spot whether you are eligible for the loan.

If you choose a leading bank, its decision on your application would be processed swiftly to help you possess your vehicle without any ado. After your loan application gets approved, you can ride out with a 2-wheeler of your choice.

You can have the hypothecation on the pledged vehicle removed once you repay the whole two-wheeler loan to the lender. After you pay off the EMIs, ask the lender for a No Objection Certificate (NOC). The document will declare that no amount of the loan is outstanding. Then submit a copy of the NOC to the Regional Transport Authority. Once the document is verified by the RTO, they would update the registration certificate and mention your name as the owner. A stamp would also be placed to mean that the hypothecation no longer applies to your vehicle. At this stage, the loan process gets completed. Now since the hypothecation is removed, you are the sole owner of your vehicle.