Two-wheelers are an ideal mode of transport for someone living in India, because it helps you carry essentials, remains fuel efficient, and also allows you to quickly transit through traffic. If you are willing to purchase a two-wheeler for any of these purposes and do not have readily available finances, availing a loan is one of the likely choices to do so. While two-wheeler loans are provided by many banks and NBFCs, one should consider if they are the best choice for purchasing a two-wheeler. An alternate option to purchase two-wheelers is to get a personal loan.
What is a Personal Loan?
A personal loan is a loan that does not require assets as collateral, and can be used to meet any kind of immediate expenses. These expenses usually include travel expenses, medical expenses, renovation, marriage expenses, essential purchases, or any other expenses. All financial institutions have different personal loan amount limits that might depend upon your credit score, but they are widely used because they can be availed very easily.
Why Personal Loans are better than Bike Loan?
Minimal or zero formalities: While two-wheeler loans require you to fulfill formalities such as registration of two-wheeler, paying down-payments, hypothecation, etc. Fulfilling such formalities can take a long time and require you to wait more or knock multiple doors to finally get your dream bike in your hands.
Lower Interest rate: Another major benefit of availing a personal loan is that personal loans can have a lower interest rate than the two-wheeler loan. While the average rate of two-wheeler loans is 11-12%, the rate of interest for personal loans is usually around 10.5%. While your CIBIL credit score determines the interest, you might get for both loans, the difference of interest rate between both the loans will be similar.
Avail full amount: If you avail a two-wheeler loan to purchase a bike, it is possible that you may only receive 70-90% of the financing for the two-wheeler. However, if you avail a personal loan, you can pay the full on-road price and drive your dream-bike directly from the show-room. Getting full finances decreases the hassle you might face in case of a two-wheeler.
Minimal eligibility criteria: For a bike loan, an eligibility criterion to be fulfilled that includes income level, or a limit on the price of two-wheeler which can be purchased, the amount limit of a personal loan is higher and the income level requirement is also lower than that of a two-wheeler loan.
Considering the constraints of availing a two-wheeler and the advantages of availing a personal loan, it is clear that getting a personal loan is the simpler and better choice to get your dream bike.
Apply for Loans of upto ₹5 Lakhs easily using your phone or laptop, and pay back on low EMIs