Are you planning to buy a new bike? Buying a new vehicle with new features and comfort is always exciting. However, the financial aspect of buying a vehicle cannot be ignored. When financing your two-wheeler, there are two common options – a personal loan and a two-wheeler loan.
However, both loans provide a way to buy your dream bike or scooter. However, there is a difference between the loans, and the interest also seems different. In such a situation, the loan should be taken after thinking carefully.
Personal Loan
A personal loan is an unsecured loan that can be used for various purposes, including purchasing a two-wheeler. Personal loans generally offer higher loan amounts, flexible repayment tenure and competitive interest rates. Although personal loans are unsecured, they come with higher interest rates than secured loans.
Two Wheeler Loan
A wheeler loan is a secured loan specially designed to purchase two-wheelers. These loans offer lower interest rates, flexible repayment options and more straightforward eligibility criteria than personal loans. However, the loan amount is generally lower than a personal loan.
Which Loan Is Right For You?
Choosing between a personal loan and a two-wheeler loan can be confusing. The following points should be kept in mind before taking the final decision.
Interest Rate
A personal loan’s interest rate is higher than a two-wheeler loan’s. If you have a good credit score, you can avail low-interest rates on personal loans. However, a two-wheeler loan can be a better option if you are looking for the lowest interest rate.
Loan Amount
Two-wheeler loans generally offer a lower loan amount as compared to personal loans. A personal loan can be better if you want a high-value loan to finance your two-wheeler.
Repayment Tenure
A personal loan offers more flexibility in repayment tenure than a two-wheeler. You can choose a repayment tenor for the personal loan from 12 to 60 months. In contrast, two-wheeler loans generally offer a repayment tenure of up to 36 months.
Eligibility Criteria
The eligibility criteria for personal loans are generally more stringent than two-wheeler loans. You can easily obtain a personal loan if you have a stable income, a good credit score and a satisfactory credit report. However, a two-wheeler loan can be a better option if you are not eligible for a personal loan.
