Find out how Bihar Gramin Bank Saarthi Two Wheeler Loan helps you own your ride

The Bihar Gramin Bank Saarthi Two Wheeler Loan helps people buy scooters, motorcycles or mopeds without paying the full price upfront. It is designed for rural and semi-urban borrowers who need easy access to credit for daily mobility. Below I explain who can apply, what documents you need, how much you can borrow, the security the bank takes, repayment rules and typical interest costs — and I show an example EMI so you can see the real cash flow impact.

Purpose (scooter / motorcycle / moped)

The loan funds purchase of new and, in many cases, pre-owned two-wheelers. Typical uses are: commuting, delivery work, farm-to-market travel and personal mobility. Banks usually finance standard passenger two-wheelers and light commercial two-wheelers. They do not finance heavily modified bikes or high-value luxury motorcycles under most retail two-wheeler schemes.

Who can apply

Eligible applicants are generally:

• Individuals aged 18–65 (age at repayment end may be capped).
• Salaried employees with a steady employer and pay history.
• Self-employed individuals, small business owners, farmers and traders with verifiable income.
• Co-applicants such as spouse or parent can be added to strengthen the application.

Why these limits? Lenders need predictable repayment capacity. Salary gives steady cash flow. Self-employed applicants must show business viability through documents.

Income proof rules

Requirements differ by employment type. The bank asks for proof so it can judge repayment capacity.

• Salaried: last 3 months’ salary slips, employer details and current bank account statements (3–6 months). Some banks accept employer certification for informal payrolls.
• Self-employed: last 2–3 years Income Tax Returns (ITR), business bank statements (6–12 months), and proof of business (trade license, GST registration or shop registration).
• Small farmers / daily wage: passbook, land papers or alternate income proof accepted at branch discretion.

Why these documents? They show actual cash inflows. Banks use them to decide both loan size and interest rate.

Loan caps

Typical limits vary by new vs used vehicle and borrower profile.

• New two-wheelers: lenders commonly finance up to 85–100% of ex-showroom / on-road cost for salaried customers. A practical cap at many rural banks sits between Rs 75,000 and Rs 1,50,000 depending on product.
• Pre-owned: finance usually capped lower — 60–80% of vehicle value and often a maximum sanctioned amount (for example Rs 50,000–75,000).

Why caps exist: used vehicles carry higher resale risk, and banks limit exposure to reduce loss if repossession is needed.

Margin (salary account vs business)

Margin is the borrower contribution above the loan amount. It reflects perceived risk.

• Salaried customers with salary account in the bank: lower margin, often 10–15%. The bank prefers borrowers who keep salary accounts because cash flow is visible and collection is easier.
• Self-employed / business: higher margin, typically 15–25%. Banks need extra buffer if income is variable.

Example: For a Rs 80,000 bike and a 15% margin, you must pay Rs 12,000 and the bank finances Rs 68,000.

Security (hypothecation + guarantee)

Two-wheeler loans are normally secured by hypothecation of the vehicle. That means the bank has a charge on the vehicle but you keep use of it. Details:

• Hypothecation: The vehicle’s Registration Certificate (RC) shows the bank as the financer until the loan is repaid. This allows repossession if you default.
• Guarantee: For small retail loans, a personal guarantee or co-applicant commonly suffices. For higher risk profiles, the bank may ask for a third-party guarantor.
• Insurance assignment: You must maintain comprehensive insurance and assign policy benefits to the bank so any total loss proceeds first cover the outstanding loan.

Why these measures? They reduce lender losses and make repossession or claim settlement straightforward.

Repayment terms

Repayment is by monthly EMIs. Common features:

• Tenure: Usually 12–60 months (1–5 years). Shorter tenures reduce total interest, longer tenures lower monthly EMI.
• Prepayment: Policies vary. Some banks allow part-prepayment or full preclosure with little or no charge; others may levy fees. Ask the branch for exact terms.
• Late payment: Penal interest applies for missed EMIs; repeated defaults can lead to repossession and affect credit score.

Why choose tenure carefully? A longer tenure reduces EMI but increases total interest cost. Choose the shortest tenure you can afford comfortably.

Interest rate snapshot

Interest depends on credit profile, loan size and tenure. Typical ranges in the rural retail market are:

• Good credit (CIBIL > 700): around 9–12% p.a.
• Average credit: 12–15% p.a.
• Higher risk or used vehicle: 15%+ p.a.

Example EMI: If you borrow Rs 70,000 at 12% p.a. for 36 months, monthly EMI is about Rs 2,325 and total interest paid is around Rs 13,700. This shows why even a few percentage points of rate change matter for total cost.

Why rates vary: Lenders price loans by expected default risk, administrative costs and funding costs. Strong documentation and a good credit score reduce perceived risk and therefore the rate.

FAQs

• How long does sanction take? Typically a day to a week after you submit documents. Simpler cases (salaried with salary account) move faster.
• Can I add a co-applicant? Yes. A co-applicant (spouse or parent) can improve loan eligibility and lower rate in some cases.
• Is insurance mandatory? Yes. Banks require comprehensive insurance covering theft, accident and third-party loss. The policy protects both you and the bank.
• Can I pre-close the loan? Often yes, but check for prepayment charges. If there is a charge, compare the savings from lower interest versus the fee before pre-closing.
• What happens if I default? The bank will levy penalties, report to credit bureaus and could repossess the vehicle after due process. This harms future borrowing ability.
• Can I finance a used bike older than 5 years? Most lenders cap the vehicle age for financing (commonly 3–7 years). Older bikes may be ineligible or financed at lower sums.

Bottom line: Bihar Gramin Bank’s Saarthi Two Wheeler Loan is a practical option if you need affordable, secured financing for daily mobility. Gather clear proof of income, keep your bank account active, and choose a tenure you can repay without stress. For exact caps, rate quotes and documentation lists, visit your local Bihar Gramin Bank branch — they will give the precise product terms for your profile.