Know the ways to use a two-wheeler loan for investment purposes

Know the ways to use a two-wheeler loan for investment purposes

Loans by Team Drivio | 6 May 2023

Rather than blocking your investments or savings, it’s wise to get a two-wheeler loan to finance your motorcycle. This way, you can invest your savings or accumulated funds while paying easily manageable EMIs to your lender.

Do you know that you can use a two-wheeler loan for investment purposes? Sounds interesting? Obtaining a two-wheeler loan is fairly easy. Reputed banks and NBFCs offer these financial privileges at competitive interest rates. If you are planning to acquire a new bike through bank financing, flexible loan tenures are available too.

Now, how can you use a two-wheeler loan for investment purposes? We will take you through the process in this article. In the first place, let’s take a look at the features and benefits of a two-wheeler loan.

Key features of two-wheeler loan

  • Unlike a personal loan that can help you manage 100% cost of the motorcycle, investment financing a two-wheeler loan can help you finance up to 90% of the cost. The borrower needs to shell out a down payment to fund the rest of the cost.
  • The interest rate on two-wheeler loans ranges from 9% to 25% with most banks and NBFCs.
  • The maximum loan tenure for a motorcycle loan is 5 years.
  • The processing charges for a two-wheeler loan range from 0.25% to 5% of the sanctioned amount. While calculating the competitive advantage of different lenders, make sure to factor in this cost too.
  • Some banks offer pre-approved two-wheeler loans to their existing clients. These loans get disbursed easily and in a shorter time.
  • Check out whether the dealer has a partnership with your bank. This ensures easy loan processing and lower interest rates. 
  • Applying for a two-wheeler loan online requires minimum documentation.

Benefits of a two-wheeler loan

          1) Choose any model

 Motorcycle owners reserve the freedom to choose any model that appeals to them. Your lender would finance around 90% of the cost as long as you are eligible for the loan. If you are financially sound, you may even purchase a sports bike that typically costs higher.

         2) Keep your savings intact

 When you go for investment financing by opting for a two-wheeler loan, you need not disturb your savings. Suppose, you have an emergency fund of INR 2 lakhs. Why block this amount by purchasing a motorcycle using cash when you have low-interest loans readily available? Loans can help you ease up your financial stress.

         3) Boost your credit score

Remember, timely repayment of a two-wheeler loan can boost your credit score. This would make you eligible for other loans in the future. Repaying a motorcycle loan on time demonstrates your financial responsibility. It also diversifies your credit portfolio, balancing consumer durable loans and personal loans.

         4) Easy loan approval

Since a motorcycle loan is secured, you can qualify for it even if your income is low or your credit score doesn’t look too bright. The motorcycle, in this case, serves as the collateral. 

        5) Low interest rates

Compared to personal loans, two-wheeler loans come at lower interest rates. Therefore, you would be saving on the entire financial privilege.

        6) Tax benefits

In case you purchase the motorcycle for commercial purposes, you are eligible for tax benefits. Besides, purchasing electric scooters from a recognized bank or NBFC also brings you tax benefits. Annually, you can qualify for a tax deduction on the two-wheeler loan interest, capped at INR 1.5 lakhs. Thus, you can save taxes legally under Section 80EEB of the tax norms.

How can you use a motorcycle loan for investment financing?

Talking of investment financing, obtaining a two-wheeler loan can help you plan your finances. The best thing about motorcycle loans is that these privileges ease up your finances. You need not break your bank or spend your accumulated savings to purchase a motorcycle. Rather, you can invest this amount in different financial portfolios while financing your motorcycle.

All of us have our respective financial priorities and plans. Depending on the stage of your life and your ongoing expenses, you need to strategize these practices. Now, suppose you are trying to invest for your mid-term priorities or retirement. Over the last couple of years, you have accumulated a lump sum amount of INR 2.5 lakhs. Investing this amount in mutual funds, or simply opening a fixed deposit account can fetch you around 7% returns annually. 

At this stage, you realize that purchasing a motorcycle would ease up your daily commuting. Two-wheelers are popular for their cost-effectiveness and low-maintenance benefits. Rather than investing your accumulated savings to purchase a bike, you can easily qualify for a two-wheeler loan. Thus, you would be shelling out marginally higher interest around 9% or 10% if your credit score looks healthy. 

However, as a direct benefit of obtaining the two-wheeler loan, you need not disturb your retirement or savings plans. Simply stack away the savings into your bank or invest them in shares as per your long-term goals. Evidently, two-wheeler loans can help you in investment financing and help you stay on track with your financial goals.


Using a two-wheeler loan for investment is a great strategy to secure your savings. The motorcycle itself is an investment, whether you decide to use it for personal or professional purposes. Thanks to easy investment financing options at reputed banks and NBFCs, obtaining a two-wheeler loan is easy. Explore the best financing options at reasonable rates of interest and plan your purchase strategically.