Want a Two-wheeler Loan? Know Pros & Cons of Taking a Two-wheeler Loan
Article by Drivio | 20th Jan 23
The practicality and financial ease that comes with a two-wheeler loan make them a popular financing option. With two-wheelers, you can seamlessly zip through the city. Whether you are commuting to work or socializing with friends around the city, motorcycles and scooters offer cost-effective transportation facilities.
Currently, the demand for two-wheelers is high in the market. These vehicles are more than just a style statement. The affordability of bikes and motorcycles makes them a practical solution to commuting around the city.
Well, while purchasing a motorcycle, you wouldn’t want to encounter a financial crunch considering your regular expenses. With a two-wheeler loan, you can break down the cost into manageable instalments.
In this article, we are going to discuss the pros and cons of taking a loan to purchase your motorcycle or scooter.
Is it right to take a two-wheeler loan?
Yes, of course. Taking a two-wheeler loan is one of the easiest ways to purchase your motorcycle. Particularly, if you don’t have the entire cash to make your purchase, reputed banks and NBFCs would offer you low-interest loans. Based on your convenience, you can divide the amount into manageable monthly EMIs.
Taking a loan to purchase your two-wheeler can also boost your credit score. This financial privilege comes under the category of automobile loans. This helps in diversifying your credit profile, and thereby improves your credit score.
Pros of taking a two-wheeler loan
With a loan for financing your motorcycle, you get to enjoy several privileges. Have a look at the reasons why you should go for these loans.
1. Buy the bike that you want
Your motorcycle or scooter is an asset that you would be using for at least a decade, if not more. Would you love to settle for anything less than the desired standard or quality? Maybe, you have some of the best models on your radar. Why let financial crunch compel you to settle for a low-end model?
With motorcycle financing, you can purchase the desired model even if you don’t have the cash amount ready. Of course, you should keep the EMIs within your affordability.
2. Don’t let financial stress affect your living
You might be into some kind of profession where you badly need a motorcycle for daily commuting. With financial privileges like loans, you can afford them without letting financial stress affecting your lifestyle.
Thanks to the manageable interest rate from established banks and NBFCs, you won’t repent taking a loan. After all, you would be using the motorcycle even when you don’t have the cash to make 100% instant payment. Each month, you need to pay an affordable amount and clear the loan. With flexible loan tenures available, you can be at complete financial ease.
3. Save your emergency fund
Well, it might be tempting to use your emergency fund to purchase your motorcycle. However, what would you do if you need to clear a sizable medical bill or shell out a lump sum amount for an emergency?
One of the pros of taking two-wheeler loan is that, you can keep your emergency fund intact. This also bestows the owners with the financial freedom and mental peace, knowing that they won’t run out of funds.
4. No collateral needed
Obtaining a loan to purchase your scooter is easy. You don’t need any collateral to qualify for these loans. Reaching out to reputed NBFCs and banks, you can qualify for these loans if you have a decent credit score. So, even if you don’t have any assets to show as collateral, you can finance your two-wheeler through a loan.
5. Get competitive interest rates
Unlike personal loans, you can obtain a two-wheeler loan at competitive interest rates. Most banks and NBFCs charge at least 14% annual interest on personal loans. However, two-wheeler loans come at much lower rates, starting from around 10% per annum.
Moreover, buyers can capitalize on discounts on seasonal offers. Pre-approved two-wheeler loans are also available, based on your credit score. During festive seasons, you can bank on special prices and limited-period deals.
6. Save on your insurance cover
While purchasing your insurance coverage for motorcycle is mandatory, financing it through a bank or NBFC can help you save on the premiums. Most manufacturers have paired up with top insurers. So, when you obtain a loan to purchase the motorcycle, you can qualify for discounts on insurance premiums. Cashbacks and discounts happen to be an overlooked aspect while calculating your budget.
Cons of taking a two-wheeler loan
Now, let’s take a look at some of the potential drawbacks of obtaining a loan to purchase your motorcycle or scooter.
1. Paying the interest
One of the cons of taking a loan to finance your bike or scooter is that you end up paying more than the actual price of the vehicle. The interest rate accounts for a sizable amount, that you need to pay over the next few years. Based on the repayment schedule, the additional amount gets divided into small parts each month.
However, you shouldn’t consider paying interest over your automobile loan as a drawback. Under any case, you are actually using the motorcycle to enhance the quality of your lifestyle, right?
2. Irresponsible handling of finances
Whether you take a two-wheeler loan from a bank or NBFC, make sure to be financially responsible. Some bike owners often end up purchasing luxury model and fancy bikes. Ultimately, they falter while making the repayment and end up spoiling their credit score.
Just like any other loan, you should consider obtaining a two-wheeler loan only when you are confident in your repayment ability. A careful scrutiny of your financial stature will help you settle for the right amount.
In this post, we have discussed the pros and cons of these financial privileges. Before we wind up, we would recommend you to explore the best financing options for your two-wheeler.
As long as you are confident in making timely repayments, you should consider taking a loan to purchase your motorcycle or scooter. Considering reasonable interest rates and easy availability, it makes sense to get these loans.