Last Updated on October 3, 2026 by Jeff Tomas
Private banks increased their share in India’s two-wheeler loan market in 2026. From April to June, they made up 30.1% of loan originations by value, up from 25.1% in the first quarter. Meanwhile, NBFCs’ share dropped from 70.6% to 66.0%.
As the lending mix changes, banks are becoming more important in two-wheeler financing. In this blog, we’ll explore how the shares of banks and NBFCs are shifting in 2026 and what borrowers should keep in mind when deciding between them.
Understanding the two-wheeler lending landscape
India’s two-wheeler market experienced strong demand in 2026. SIAM reports that domestic sales reached 56.3 lakh units from April to June 2026, up 20.3% from the same period in 2025. As the market grows, more buyers are also seeking two-wheeler financing.
Banks and NBFCs meet this demand by offering different two-wheeler loan options. Although both types of lenders help buyers finance their vehicles, terms can vary depending on the borrower’s financial situation. Credit score, income, repayment ability, and loan eligibility all affect the loan amount, interest rate, tenure, and other conditions.
Why Borrowers May Choose Banks Over NBFCs
Both banks and NBFCs offer two-wheeler loans, but many borrowers choose banks for digital convenience, better pricing, and the benefits of existing banking relationships. Here are a few important points to consider:
- Digital application process: Many banks let borrowers apply for a two-wheeler loan online, upload documents, and complete most steps without visiting a branch. For instance, IDFC FIRST Bank offer a paperless process to apply for a two-wheeler loan.
- Competitive interest rates: Banks often offer competitive bike loan interest rates depending on your credit profile, income, and ability to repay. Comparing rates helps you understand the loan’s total cost.
- Pre-approved loan offers: If you are already a customer, you might get pre-approved loan offers based on your relationship with the bank and your credit profile. This can make borrowing easier.
- Established banking relationship: If you already have an account or other products with a bank, it can be more convenient to manage your loan, repayments, and other financial services all in one place.
Interest Rate and Approval Speed Comparison
Interest rates and loan approval timelines can vary across banks and NBFCs depending on the lender, vehicle category and borrower profile. Therefore, borrowers should compare the actual loan offer rather than rely only on broad market ranges.
| Factor | Banks | NBFCs |
| Interest rates | Banks may offer different rates based on the type of two-wheeler and the borrower’s profile. For example, IDFC FIRST Bank currently offers two-wheeler loan interest rates starting from 9% p.a. for the premium segment, 10% p.a. for mid-premium, electric and commuter vehicles. | Rates also vary considerably across NBFCs. For example, leading NBFCs may offer two-wheeler loans starting from 12.5% p.a. |
| Loan approval | Digital lending processes can enable fast credit decisions. IDFC FIRST Bank offers 2-minute approval on two-wheeler loans. | Approval timelines differ by lender and application. Some NBFCs offer instant or same-day decisions, while others may take longer depending on documentation and verification. |
Risk Appetite and Credit Profile Differences
All lenders consider a borrower’s risk appetite and credit profile before approving their loan request. Typically, banks offer loans to borrowers with strong credit profiles and lower risk, giving them confidence in timely repayment. However, NBFCs may also offer loans to borrowers with slightly weaker credit profiles or higher risk, typically at higher interest rates to offset the risk.
Emerging Players and Co-Lending Models
Along with banks and NBFCs, several other lenders are emerging, making financing more accessible to borrowers across the country. This includes fintechs and dealer financing portals. Fintechs offer digital-first bike loans with quick online processing, approval, and disbursal. Dealer financing portals let borrowers planning to purchase explore all available two-wheeler loan options and choose the best offer.
Which option might suit you better in 2026?
The best financing option depends on your eligibility, credit history, and how you plan to repay the loan. Banks are often a good choice if you want a structured loan with digital applications, competitive rates, and flexible repayment terms. For example, IDFC FIRST Bank provides two-wheeler loans with a digital application, up to 95% loan-to-value, and flexible tenure options from 6 to 60 months, depending on your eligibility and their terms.
Before you choose a lender, compare interest rates, loan amounts, repayment periods, fees, and total cost. This will help you find the option that best fits your needs.
Banks and NBFCs offer different terms for two-wheeler loans, so compare interest rates, loan tenures, amounts, fees, and EMIs before you apply. IDFC FIRST Bank can finance up to 95% of your bike’s on-road price and offers flexible repayment options. You can also use the bike finance calculator and review available offers before submitting your application.
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