Bike Loan Vs Personal Loan: Which Loan is Best to Buy a Bike?

Bike Loan

A variety of loan schemes are available to meet the needs of consumers making purchases they need financial help with. Home loans assist individuals looking to buy their place, car and two-wheeler loans help with purchasing one’s dream vehicle, and education loans make the burden of expensive higher education slightly less. These loan schemes are tailored according to interest rates, tenure and the amount denomination according to the purchase. For example, two-wheeler loans have a tenure of 3 to 5 years, whereas home loans have tenure from 5 to 30 years.

Features of a Bike Loans:

A Bike loan offers to help an individual, looking to buy a two-wheeler, to finance the purchase. Bike loans usually come with affordable interest rates and flexible EMI options. They have a tenure ranging from 12 months to 48 months.

Secured bike loansare taken against a collateral or security, that may or may not be an asset. This loan can also be availed against the security of the two-wheeler. The asset (bike/two-wheeler) remains hypothecated with the lender of the loan till the loan is repaid in full. These loans come with lower interest rates and are easier to obtain but involve the risk of losing the asset.

Unsecured Bike Loans, on the other hand, requires no collateral or security, but the rate of interest is high, and the eligibility is more stringent.

Features of personal loans:

Personal loans are short-term and essentially unsecured in nature, which means that unlike car loans or home loans, they are not secured against an asset or collateral. The eligibility criteria and documentation requirements for availing a personal loan are less stringent; however, the rate of interest charged on a personal loan is higher in comparison to a bike loan.

Unlike other loans, a personal loan is not monitored by banks and can be used for any personal need, including vacations, medical expenses, education, renovations, and purchasing appliances.

Which loan is the best?

The first step to answering this question is to use a Personal Loan EMI Calculator and a Bike EMI Calculator to find out which scheme is better suited for your needs.  Here you can calculate bike EMI online with Bike EMI calculator –

Coming to the differences of the two schemes, a personal loan does not require any down payment. Bike loans, on the other hand, gives an individual the option of setting a down payment, which is a percentage of the cost of the bike, and then pay the rest of the amount as EMIs over time. This gives the person the flexibility to lower the rate of interest charged on his amount as the interest decreases with a higher down payment.

Interest rates on personal loans are higher as compared to Interest rates on two-wheeler loans. Therefore, they should only be availed in case of dire need.

Personal loans are obtained on a relatively short-term tenure of 1 to 5 years, whereas bike loans now have an extended duration of 7 years. Personal loans usually require 4 to 5 business days to get sanctioned, but bike loans require a few months as there is more documentation to go through.

However, the primary difference is that of purpose. While a personal loan can be used to cover a variety of costs, and are available from Rs. 2 lakhs to 20 lakhs for any two-wheeler depending on your needs, bike loans are sanctioned as per the value of the vehicle. This makes it possible to attain the exact amount one needs from the lender, instead of borrowing more or less than the price of the motorcycle.

To conclude:

While personal loans are useful under various circumstances, it is advisable to opt for a bike loan when purchasing a two-wheeler because the tenure, interest rates and EMIs are tailored to support such a purchase. This will avoid any financial strain on you and make the process as smooth as possible.


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