Many financial consultants and experts advise two-wheeler buyers to take out a personal loan to purchase their dream bike. You could be unsure if it’s a good idea. The truth is that taking out a personal loan to get a two-wheeler loan makes a lot of sense. Taking out a personal loan to buy a two-wheeler is a smart financial move for a variety of reasons. Two-wheelers are one of the most popular types of transportation in the country since they are light, swift, and allow users to save time when traveling.
If you don’t have enough money to buy a new bike or don’t want to spend your savings on a two-wheeler, you may apply for a loan to make the purchase more convenient. To purchase a new scooter or motorcycle, you can use a two-wheeler loan or a personal loan. In India, both banks and non-banking financial companies (NBFCs) offer these forms of loans.
You can profit from the advantages of an unsecured loan when you apply for a personal loan. This means you won’t have to provide any kind of collateral or security when applying for the loan. Furthermore, the interest rates imposed on personal loans are quite low. As a result, your total borrowing costs for buying a bike will be modest.
You may be confident that you will be able to manage your other monthly expenses with smart financial planning. The most appealing feature of a personal loan is that you don’t have to tell your lender that you’re using the money to buy a bike.
Top 8 benefits of using a personal loan to buy a two-wheeler
No need to make a downpayment:
When purchasing a two-wheeler, you will almost certainly be required to pay a deposit. Following a discussion with your lender, you will be asked to settle on a down payment. Most of the time, they only lend money for 80 to 90% of the vehicle’s on-road pricing. When you take out a personal loan to buy a bike, however, you will not be required to put down any money. You can get complete financing for the cost of your bike.
100% on Road price:
When you take out a personal loan to buy a new two-wheeler, you can finance the entire on-road cost. This is a huge plus because most lenders only lend up to 90% of the purchase price. You won’t have to worry about paying down payments on your loan this way. If you wish to purchase a car with a two-wheeler loan, you will be required to make a down payment.
Even if you have no credit history, take out a loan:
In most cases, people buy their first bike shortly after graduation or when they obtain their first job. During these times, one may not have any credit history because they have not applied for any type of credit. Your lender will almost definitely request information regarding your credit history or a CIBIL score when you apply for a two-wheeler loan.
You might not be able to get a bike loan if you don’t have a solid credit history. You may put off getting a two-wheeler loan for a few years, build up a good credit score, and then apply. Even for personal loan applications, lenders want CIBIL scores. Certain lenders, on the other hand, may agree to supply you with a personal loan after reviewing your income, employer information, work status, investments, and other factors. Your loan application will most likely be authorized if your lender is satisfied with your financial profile and believes you will be able to repay the loan on time. After that, you can spend it to purchase the automobile of your choice.
No need to hypothecate the Two-Wheeler:
When you buy a vehicle using a two wheeler vehicle loan, the bike is frequently hypothecated. This implies you’ll have to provide your bank or NBFC proof of ownership of your new bike. The ownership of the bike will be transferred to your name only after you have completed the full payment. You will be forced to go through a lengthy documentation process at the Regional Transport Office (RTO) to hypothecate your bike. You will also have to spend money on this procedure.
Must receive a no-objection certificate (NOC) from your lender when you have totally paid off your two-wheeler loan. The NOC fees are usually quite hefty. Instead, you may simply take out a personal loan and avoid the time-consuming hypothecation process as well as any additional fees. By choosing this simpler alternative to purchase your new vehicle, you will save money and time. You will only be needed to pay a processing charge with a personal loan, which is normally up to 2% of the loan amount. This cost varies depending on the lender.
When you take out a personal loan to buy your scooter, the interest rate is usually cheap. When compared to a two-wheeler loan, the interest rates on a personal loan are typically lower. Your bike loan interest rate will be determined by your income, loan amount, loan tenure, two-wheeler specifications, vehicle age, and other factors. You may be charged a very high-interest rate if any of the variables do not fulfill the lender’s qualifying standards.
Interest is a substantial part of your total loan costs. Your loan expense will be cheap if your interest rate is low, as your equated monthly installments (EMIs) will be modest. Don’t sign a vehicle loan agreement without reading it properly. If your rate of interest is high, on the other hand, your loan expenses would be considered due to large EMIs. A personal loan makes sense if you’re looking for a low-interest loan to buy your dream bike. The age of your vehicle and the characteristics of your bike would be irrelevant in this scenario.
Personal Loan Eligibility Criteria is Easier:
They are less complicated than two-wheeler loans. The minimal income requirement for a two-wheeler loan is slightly greater. When you take out a personal loan, you may easily handle your monthly installment amounts if you have a solid monthly income. As a result, you can buy that fantastic bike you’ve been eyeing in your local bike shop or online with an affordable personal loan.
Smaller loan tenure:
A personal loan allows you to take out a loan for a shorter period. Personal loans often have terms ranging from six months to five years. You will not be obliged to pay interest for as many months if you have a shorter term. Being fiscally disciplined can help you pay off your personal loan quickly. When you choose a shorter-term with less interest to pay, you save a lot of money.
For the purchase of your motorcycle or scooter, you can now choose between a two-wheeler loan and a personal loan. A personal loan can be applied for both online and offline. To apply for a loan online, go to the lender’s official website or a third-party financial website. On the internet, you may compare personal loan interest rates, processing costs, penalties, and other characteristics. After you’ve made your pick, you’ll need to apply for a loan and then purchase your bike. To apply offline, go to a physical branch of your lender, where an executive will supply you with the necessary information and assist you in completing the application.