Why Purchase a New Two-Wheeler through a Personal Loan?

You can be sure that you will be able to manage your other monthly expenses with sound financial planning. The best thing about a personal loan is that you don't have to tell your lender that you're using the money to buy a bike.

Whether you are interested in buying a premium bike, a daily-commuter scooter, a sports bike or an adventure bike, you can apply for a personal loan to purchase it. Also, whether you want a brand new two-wheeler or a used two-wheeler, you can take a personal loan.

Top 8 Reasons to Buy a Two-Wheeler with a Personal Loan

100% On-Road Price

When you take a personal loan to buy a new two-wheeler, you can enjoy 100% financing of the on-road price. This is a great boon as most lenders offer only up to 90% finance. This way, you do not have to worry about making down-payments for your loan. If you plan to buy a vehicle with a two-wheeler loan, you will mandatorily have to make a certain down-payment.

No Need to Make a Down Payment

When you take a two-wheeler, you will definitely need to make a down-payment. You will be required to decide the down-payment after having a negotiation with your lender. Most often, they give financing only for 80 to 90% of the on-road price of the vehicle. On the other hand, when you take a personal loan to purchase a bike, you will not be asked to make any down-payment. You can get full financing for your bike's price.

Get a Loan Even Without a Credit History

Generally, one buys his or her first bike right after college or when they get their first job. During such times, one may not have any credit history as the person would not have applied for any form of credit till then. While applying for a two-wheeler loan, your lender would most certainly ask for details about your credit history or for a CIBIL score. Without a good credit history, you may not be eligible for a bike loan.

You could wait for a few years, build a decent credit score, and then apply for a two-wheeler loan. You could just apply for a personal loan. Lenders ask for CIBIL scores even for personal loan applications.

However, certain lenders may agree to provide you with a personal loan after checking your income details, employer's details, employment status, investments, etc. If your lender is satisfied with your financial profile and convinced that you will be able to repay the personal loan on time, then your personal loan application will most likely be accepted. You can then use it to buy the vehicle of your choice.

No Need for Hypothecation of the Two-Wheeler

Generally, when you use a two-wheeler loan to purchase a bike, the bike will be hypothecated. This means that you will have to furnish the ownership of your new bike with your bank or NBFC. Only after you complete making the full payment, the ownership of the bike will be transferred to your name.

For hypothecation of bike, you will be required to go through a long documentation process at the Regional Transport Office (RTO).

You will be required to spend money on this process as well. After you pay off the two-wheeler loan completely, you will mandatorily have to get a no-objection certificate (NOC) from your lender.

The NOC charges are generally pretty high. Instead, if you simply take a personal loan, you would not have to worry about any tedious hypothecation process or additional charges. You will get to save money and time by going for this simpler option to buy your new vehicle. With a personal loan, you will be required to pay only a processing fee, which is usually up to 2% of the personal loan amount. This fee can differ from lender to lender.

Low Interest Rates

When you choose a personal loan for buying your scooter, the rate of interest will typically be low. When compared to a two-wheeler loan the interest rates the interest rates are usually lower for a personal loan.

The interest rate for your bike loan will be determined by your income, loan amount required, loan tenure, your two-wheeler specifications, age of the vehicle, etc. If any of the factors does not meet the lender's eligibility criteria, you may be charged a very high interest rate. Interest plays a significant role in your overall loan expenses.

If your interest rate is low, then your loan expense will be low as your equated monthly installments (EMIs) will be low. On the other hand, if your rate of interest is high, then your loan expenses will be high due to high EMIs. If you are looking to borrow an affordable loan to purchase your dream bike, a personal loan does make sense. In this case, the age of your vehicle and the bike specifications would not even matter.

Simpler Eligibility Criteria for Personal Loans

The are simpler than that of two-wheeler loans. For a two-wheeler loan, the minimum income criterion is slightly higher. With a decent monthly income, you can manage your monthly installment amounts effortlessly when you take a personal loan. Hence, with an affordable personal loan, you can buy that awesome bike that you have been checking out every day in your nearest bike showroom or online.

Smaller Tenure for Personal Loans

When you choose a personal loan, you can enjoy smaller tenures. Tenures for personal loans usually range from six months to five years. When you have a shorter tenure, you will not be forced to pay interest for too many months. You can clear off your personal loan quickly by being a little financially disciplined. This way, you save extensively when you choose a shorter tenure with lesser interest to pay.

You can now decide if you want a two-wheeler loan or a personal loan for purchasing your motorcycle or scooter. You can apply for a personal loan online or offline. To apply online, you will have to visit official websites of lenders or third-party financial websites. You can compare personal loan interest rate, processing fees, penalties, and other features on the internet itself.

Once you make a decision, you apply for a loan, and then buy your bike. To apply offline, you can visit a physical branch of your lender and an executive will provide you with the details and help you apply.

To ensure a speedy and easy loan application procedure, keep all your supporting documentation prepared. Borrowers can upload documents online with the majority of lenders and financial web platforms.

This is great as it promotes simplified, paperless transactions. Apply for a reliable personal loan that suits your requirements, preferences, and financial condition. Once it gets approved and disbursed, you can purchase your marvellous bike and have a great time with beautiful riding experiences.

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