Two-wheelers have always been a preferred choice among Indians for commuting to-and-fro workplace and short-distance travels. It is faster, convenient, affordable, and of course, a significant traffic escaper. As the world shifts towards electric vehicles, the increase in two-wheeler demand is unmatched. With lesser maintenance and zero fuel cost, owning a two-wheeler and commuting has never been so economical before.
The cost of two-wheelers is anywhere between Rs. 50,000 to Rs. 1,00,000 for a standard vehicle. Suppose you go for high-end versions or sports bikes; the price increases per se. However, despite two-wheeler loans available, people resort to personal loans to finance their two-wheelers. It only burdens their finances. Below are the top reasons to avoid personal loans to finance your two-wheeler and instead go for an affordable two-wheeler loan.
Reasons to Avoid Personal Loans for Two-Wheeler Finance
Below are the reasons to avoid personal loans as your two-wheeler finance option:
- Higher Interest Rates: Personal loans have a higher interest rate than two-wheeler loans. While the two-wheeler loans interest rate starts at just 10%-11% per annum, personal loans may start from as high as 12%-13%. Paying a higher interest rate may not be wise, especially when a more affordable alternative is available.
- CIBIL Score: As personal loans are unsecured, banks rely on CIBIL scores to assess the creditworthiness and examine the borrower’s credit history. Therefore, going for personal loans may require you to have an excellent CIBIL score; otherwise, the chances of loan rejection increase.
- Eligibility: Personal loan also requires income stability apart from work experience requirements. These requirements may be absent or relaxed in vehicle loan requirements, thus making it easier to avail of a vehicle loan than a personal loan.
- Loan Amount: The amount of personal loans you can avail of depends on your income and profile. This can end you up with only partial funding for your vehicle. Ultimately, you will have to shelve out a considerable chunk of the down payment from your pocket thus, straining your finances. Whereas, in the case of two-wheeler loans, the lender may grant up to 95% of the vehicle cost as a loan. For select vehicles, you may get a loan up to 100% of the vehicle cost.
Two Wheeler Loan Eligibility
Following is the eligibility criteria for two-wheeler loans:
- Age: The applicant must be aged between 21-60 years of age.
- Residence: The applicant must have residential stability for at least one year.
- Work:The applicant must have stable employment for at least one year.
If you go for high-end vehicles, there might be a slight variation in eligibility requirements.
Bottom Line:
Two-wheeler loans have been instrumental in facilitating two-wheeler purchases, and there seems to be no reason to go for personal loans to buy your two-wheeler. If you are looking to fund your dream bike, then going for a bike loan will always be beneficial compared to personal loans. If you want to compare and calculate the benefits of money saved, you can use a bike loan EMI calculator. Enter the loan amount, bike loan interest rate, and tenure for the loan, and you will get the exact amount of EMI as well as the total amount you will end up paying in both options. Take a wise decision when purchasing your dream bike with two-wheeler loans!
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
