Top 7 Reasons to Buy a Two-wheeler with a Personal Loan


Financial advisors and financial experts frequently advise two-wheeler buyers to apply for a personal loan in order to purchase their dream vehicle. So, is it a good idea? The truth is that applying for a motorcycle loan through a personal loan makes a lot of sense.

There are numerous reasons why taking out a personal loan to purchase a two-wheeler is a wise financial decision. Two-wheelers are one of the most popular modes of transportation in the country because they are light, quick, and save users a lot of time when traveling from one location to another.

You can use either a two-wheeler loan or a personal loan to purchase a new scooter or bike. Banks and non-banking money lenders in India provide both types of loans. If you do not have enough money to purchase a new bike, or if you do not want to use your savings, you can apply for a loan to make the purchase more convenient.

You can take advantage of an unsecured loan when you apply for a personal loan. This means you don’t have to provide any collateral or security when applying for the loan. Furthermore, the interest rates on personal loans are quite low. As a result, your overall loan costs for owning a bike will be less. You can rest assured that you will be able to manage your other monthly expenses if you make a financial plan ahead of time.

The most appealing feature of a personal loan is that you do not have to tell your lender that you are using the loan to buy a bike. This is due to the fact that there is no requirement to specify the reason for taking out a personal loan.

Why should you buy a two-wheeler with a personal loan?

  1. Complete financing

When you take out a personal loan to buy a new two-wheeler, you can get complete financing of the on-road price. This is a huge help because most two-wheeler loan lenders only offer up to 80% financing. Also, you won’t have to worry about making loan down payments. If you intend to purchase a vehicle with a two-wheeler loan, you will be required to make a down payment.

  1. Instant ownership

The personal loan provides instant ownership for your two-wheeler because you receive the money instantly in one short payment. This allows you to pay for your bike in one short payment. In the case of a two-wheeler loan, ownership will not be transferred to you until you have paid the last EMI. The EMI for your personal loan is completely independent of your bike and its ownership.

  1. No credit history required for personal loans

When you apply for a two-wheeler loan, your lender will almost certainly request information about your credit history or a CIBIL credit score. This is done to reduce the risk involved for the lenders in terms of loan repayment.

The same is done in the case of a personal loan, but the difference is that when you apply for a personal loan to buy a bike/scooter, they may provide flexibility and be willing to lend you even at a slightly higher interest rate than the normal one for a personal loan.

  1. Hypothecation of a two-wheeler is not required

When you use a two-wheeler loan to buy a bike, the bike is usually hypothecated. This means you’ll have to provide proof of ownership of your vehicle to your bank or NBFC. The ownership of the bike is transferred to your name only after you have paid the full amount.

The process to hypothecate your bike at the RTO is lengthy and expensive. After you have completely paid off your two-wheeler loan, you must obtain a no-objection certificate (NOC) from your lender which also costs quite a lot.

Instead, if you take out a personal loan, you will not have to deal with any time-consuming hypothecation procedures or additional fees. By choosing this simpler option for purchasing your new vehicle, you will save money and time. With a personal loan, you will only be required to pay a processing fee, which is typically up to 2% of the loan amount. This fee varies depending on the lender.

  1. Interest rates are independent of the bike’s segment

In general, the interest charged on a two-wheeler loan is determined by the bike’s segment. For example, the interest charged on a premium bike or a sports bike is higher than the interest charged on standard bikes. However, when you apply for a personal loan for a two-wheeler, the interest charged is completely independent of the bike’s segment and is charged based on your profile and personal loan interest rate.

Buying a two-wheeler through a personal loan can be a good idea if you want an expensive bike because the interest charged on a two-wheeler loan is very high, around 30% to 35% depending on your bike. On the other hand, when you go for a personal loan to purchase your bike, it will cost you only 16% to 20%, which is quite affordable compared to a two-wheeler loan.

  1. Personal loans have simpler eligibility criteria

A two-wheeler loan has more stringent eligibility requirements than a personal loan because it is a secured loan and you may be required to provide a guarantor or collateral against your loan. A personal loan, however, is completely unsecured and you don’t need to provide any security against your loan. When you take out a personal loan, you can easily manage your monthly installment amounts if you have a decent monthly income.

  1. Shorter terms and flexible tenure

You can enjoy shorter repayment terms when you choose a personal loan. Personal loan terms typically range from 6 months to 5 years. When you have a shorter term, you will not be required to pay interest for as long. You can quickly pay off your personal loan if you are financially disciplined. A shorter-term with less interest to pay can save you a lot of money.

A personal loan for a two-wheeler also comes with a flexible repayment period that is entirely dependent on your ability to repay. In general, the tenure of a personal loan is shorter than that of a two-wheeler loan. Prepayments and pre-closure are also permitted by most lenders in the case of a personal loan. All of these options are not available with a two-wheeler loan.


Between a two-wheeler loan and a personal loan, it is ideal to utilize a personal loan to finance the purchase of your bike or scooter.  You can compare personal loan interest rates, processing fees, penalties, and other features online before making a decision.

To ensure a quick and smooth loan application process, keep all of your documents ready. Most lenders allow applicants to upload documents online. This encourages simplified paperless transactions.

Money View offers personal loans for the purchase of two-wheelers. You can use this instant collateral-free loan to purchase the vehicle of your choice. Money View offers personal loans at a highly competitive interest rate, minimum processing fee, and repayment tenure of up to 60 months.