Should you buy a bike with a personal loan or a two wheeler loan

quasi-two-wheeler Car owners in India rely on two-wheeler loans for their favorite bikes and scooters. However, earlier this year, the RBI decided to raise the repo rate by 40 basis points to 4.40% in order to control liquidity and curb inflation.The Reserve Bank of India has also raised the cash reserve ratio (CRR) 50 basis points to 4.50%. This is not good news for individuals who want to seek two-wheeler loans from banks. These measures essentially translate into higher interest rates and higher variable rate EMIs. Also, as banks are less willing to extend two-wheeler loans to applicants with lower credit scores, the overall loan approval rate may drop.

Today, individuals can seek bicycle loans from banks, NBFCs or captive financial institutions. However, a two-wheeler loan need not be the only financing option at an individual’s disposal. You can also apply for and get a personal loan and use the loan amount to buy your desired two-wheeler.it’s not a novel idea, as some would-be bike owners apply for personal loans to finance a new two-wheeler. That said, personal loans and bike loans are fundamentally different and have different frameworks.

Difference Between Personal Loan and Bike Loan

You don’t have to put up your assets as collateral when applying for a personal loan. That said, these are unsecured loans, usually for emergencies or immediate expenses. You can take advantage of personal loans to pay for travel, medical, marital or any other expenses and these are usually short-term loans. Also, the documents required to get a personal loan are less stringent and you can approach banks, NBFCs and fintech lenders to get a personal loan.

on the other hand, Two-wheeler loans are secured loans because you can take advantage of the security of your bike for the loan. Therefore, the two-wheeler remains secured by the lender or the regional transport office until you repay the loan in full. Additionally, certain lending entities have lengthy paperwork, and banks often look for borrowers with good credit scores.

Personal Loans – Pros and Cons

Before purchasing a two wheeler, it is prudent to research personal loans and understand the pros and cons.You can also use Bike Loan EMI Calculator Find out if you should apply for a personal loan or two wheeler loan. That is to say, hThere are some pros and cons to getting a personal loan to buy a two wheeler.

advantage

• Unsecured – Unlike a two-wheeler loan, a personal loan is an unsecured loan. You don’t have to provide any assets as collateral.
• zero down payment – Usually, when you apply for a two-wheeler loan, you have to make a certain down payment. This could be RTO and insurance premiums, or 15-30% of the on-road price of the two wheeler. However, when you get a personal loan, you don’t have to dip into your savings for the down payment. Instead, you can use part of the loan amount to pay for your two-wheeler.
• Minimum eligibility criteria – The eligibility criteria for personal loans are not as strict as those for two-wheeler loans. Two wheeler loans usually have higher salaries.However, you can meet the basic eligibility criteria and use the of personal loans.
• 100% funded: You can finance 100% of the cost of your two wheeler with a personal loan.
• huge amount: When you apply for a personal loan, you can get a loan of up to Rs. 4 lakhs and buy a quality high-end bike with ease.

shortcoming

• interest ratesecond – Since personal loans are unsecured loans, interest rates tend to be high. Interest rates also depend on your credit score. NBFCs and certain banks offer two-wheeler loans at much lower interest rates as compared to personal loans.
• repayment period – Personal loans are short-term loans that are used for urgent needs. Therefore, their repayment periods are also shorter. However, some lending entities offer up to 7 years to repay your bike loan.
• Fees and Penalties – Personal loans tend to incur significant processing fees, depending on the loan amount. Also, if you miss any EMI payment, the lender may charge hefty penalties.

Should you opt for a two wheeler loan?

There are pros and cons to both personal loans and two-wheeler loans. Unlike personal loans, bike loans are secured loans. Therefore, lending entities offer very competitive interest rates. Additionally, you can claim tax deductions and depreciation benefits on the bike loan amount. Plus, you don’t run the risk of racking up a lot of debt because you can apply – and get the exact amount you need to buy your bike. This can be done using the bike loan EMI calculator where you can choose the payment terms that are convenient for you.

Personal Loans vs Two Wheeler Loans

Both of these financing options allow you to buy the two-wheeler of your dreams without compromising your savings. If you want to buy a bike right now and don’t want to go through the hassle of lengthy paperwork, you can apply for a personal loan and buy the bike of your dreams. Likewise, if you don’t have a good credit score (below 750), you can apply for a personal loan.Or, if you want to take advantage of low interest rates and long-term repayment terms, you can apply two wheeler loan. You can make a decision based on your credit situation, necessity and preference.

you can apply now Online Two Wheeler Loans and get financing up to 100% of the on-road price of your Two Wheeler by visiting Bajaj Markets. Plus, you can benefit from low interest rates and faster processing times. This way, You can get the bike of your dreams without worrying about rates or long wait times.