Two-wheeler Loan V/S Personal Loan

A common dilemma faced by two-wheeler buyers is whether to take a Two-wheeler Loan (Bike Loan) or Personal Loan, when buying a two-wheeler. Though both these loans serve the purpose, there are some important differences. Here are a few points that will help you make the right choice.

Loan type:

The major feature that differentiates a bike loan from personal loan is the type. Bike loan is secured loan – a loan that requires you to pledge any asset for the collateral. In case of bike loan, bike itself can serve as a collateral. A personal loan is an unsecured loan, which do not require any collateral against the loan.

Loan Amount: 

A Two-wheeler Loan usually depends on the price of the two-wheeler and will cover the exact value of the vehicle but what if you want a riding jacket and a premium helmet as well? This is where a Personal Loan has the edge as it lets you avail funds up to Rs. 25 Lakhs. This will cover the cost of the two-wheeler and any additional products you need.

Interest rate: 

Since personal loans are unsecured loans, they do not require any collateral, hence their interest rates are relatively high. Since the vehicle itself serves as collateral in a two-wheeler Loan, the interest rate is significantly lower.

 

Loan disbursal time: 

Personal Loans can be sanctioned within 24 hours while a Two-wheeler Loan disbursal takes 4 to 5 days.

To learn more about Two-wheeler Loans and Personal Loans, head to Finserv MARKETS.