Two-wheelers in India are not vehicles, but a necessity in the present day. Millions of bikes and scooters escape the traffic jams in a big city or ride on the narrow streets every time. However, as various models are priced over ₹1 lakh, the expenses of buying good two-wheelers have increased tremendously in the market. Be it an entirely new bike model or a used bike, financial institutions have come up with customised two-wheeler loans. A no-cost EMI two-wheeler loan helps you buy your favourite two-wheeler by paying fixed instalments without any extra interest.
The two-wheeler loan offers flexibility in eligibility conditions for individuals seeking to purchase a bike. This article discusses how the two-wheeler EMI plans work, their merits, and whether or not they are financially viable for the average Indian consumer.
Understanding Two-Wheeler Loan and How it Works?
A two-wheeler loan is a type of secured loan for assisting individuals to buy a two-wheeler (bikes or scooters) without paying the full price up front. Instead, only a significant part of the price of the vehicle is financed by lenders, while the borrower would pay back the loan amount in easy EMIs (Equated Monthly Installments) over a period of time.
The maximum amount of finance can be 90%-100% of the on-road price of a bike with a maximum period of 12-60 months. It requires minimum documentation and fast approvals, making a two-wheeler loan extremely popular, especially for first-time borrowers or those looking to improve their credit score.
What is a Two-Wheeler Loan EMI Plan?
Two-wheeler loan EMI plan allows repaying the loan amount in fixed monthly instalments, having both principal and interest components. This minimises the burden of payment by allowing the borrower to pay for the vehicle over a convenient time.
The lenders offer no-cost EMI bike loan schemes, where the interest component is borne by the seller or brand partner. This way, the customer has to pay the principal amount only. This personal loan on the bike could also be taken as an option for a used bike purchase while covering expenses related to the vehicle, like insurance and registration. However, borrowers must remain cautious about timely payments to avoid personal loan default, which can affect credit scores and future borrowing capacity.
Key Benefits of Choosing a Two-Wheeler Loan EMI Plan
There are several benefits of taking a personal loan against a bike or an EMI scheme, such as:
- Ownership Affordability: Instead of saving for years, a two-wheeler loan allows the instant purchase. Thus, the purchase cost can be repaid in instalments over time without putting pressure on cash flow.
- Flexible Tenures: The minimum and maximum repayment options are generally from 12 months to 60 months, as desired by the purchaser.
- Minimal Documentation: Loan documentation requires only basic KYC documents, income proof, and bike quotations.
- Higher Loan Amounts: Up to ₹10 lakhs financing is available for the purchaser.
- Attractive Interest Rates: No-cost EMI bike loan schemes or special interest rates are offered to preferential customers.
- Builds Credit History: A regular payment of EMIs on time towards a personal motorcycle loan or a two-wheeler loan improves the credit history, which helps in getting loans conveniently in the future.
EMI vs Lump Sum Payment – Which is Better?
The comparison between a no-cost EMI bike loan and a lump sum payment is simple:
| Factors | EMI (Two Wheeler Loan): | Lump Sum Payment |
| Financial Flexibility | Keeps savings flexible for emergencies, other investments, or even for a motorcycle loan in the future. | Drains a large sum of your cash reserves, limiting flexibility for not-so-unexpected expenses. |
| Budget Management | Regular instalments supported by 2-wheeler personal loans help maintain the financial budget and a steady cash flow. | Huge upfront payments can mess with financial budget and also with monthly cash management. |
| Credit Score Boost | Timely EMI payments boosts credit score, easing the process of accessing the personal loan on bike or other loans later. | No EMI payments mean no credit history improvement because of this purchase. |
| Cost Factor | You pay interest over time, but a no cost EMI bike loan is one option you can take to minimize this cost difference. | Saves on interest, thereby proving to be the most economical option in case one can afford the one-time price. |
When is a Two-Wheeler EMI Plan Truly Worth It?
A two-wheeler personal loan or EMI plan is useful in the following cases:
- When you want a personal loan or EMI plan without affecting other financial goals or budget.
- You can rather withdraw your money to generate better returns.
- If you are eligible for no-cost EMI bike loan offers.
- If there is no immediate funding, but you require a vehicle to work or conduct business.
- If you want to improve your credit score by using smaller debts.
- When a loan is better for long-term financial management than a bulk payment.
Common Pitfalls with Two-Wheeler Financing
The following are the common mistakes that purchasers make with two-wheeler financing:
- Ignoring the Document terms: Always check the document because it contains fees such as processing fees, foreclosure penalties (if there are any), and insurance details.
- Don’t take more than the required loan amount, as this will only increase the repayment burden.
- Missing EMIs: Failure to pay EMI by the due date or not paying instalments can hamper one’s credit report and may result in extra fines.
- Not Comparing Offers: Always compare the loan offers, especially when looking for a personal loan for used bikes or looking for special EMI plans.
Final Thoughts
To summarise, a two-wheeler loan with an EMI scheme is a smart choice for anyone who wishes to own a motorcycle without spending a huge amount in a lump sum. The low interest, flexible tenure, easy documentation, two-wheeler loan age limit, and improvement of one’s credit score are some of the major benefits of EMI bike loan.
If you are in search of a fast and easy two-wheeler financing experience at competitive rates, flexible repayment options, and quick approval, Stashfin comes to your rescue. The digital lending platform at Stashfin makes sure that your ride is never out of reach. Go ahead and apply online for instant approval today!
Frequently Asked Questions
What are the benefits of a two-wheeler loan?
A two-wheeler loan provides instant bike ownership with affordable EMIs, flexible tenure, minimal documentation, and a strong credit history for you.
Can I negotiate my two-wheeler loan interest rate?
Yes, if you have a good credit score or good rapport with the lender, you can negotiate for lower interest rates, or you can opt for the no-cost EMI bike loan scheme.
What happens if I miss a two-wheeler loan EMI?
Missed EMIs on your personal loan for the two wheeler will lead to penalties and will ruin your credit score. A high number of missed payments may even lead to the seizure of an asset.
Is it better to take a loan or pay for a bike upfront?
Paying upfront avoids interest payments. While a two-wheeler loan offers liquidity, tax deductions in case of business use, and enhances the credit profile with timely EMI payments.
Can I foreclose my two-wheeler loan early?
Yes, early foreclosure of a two-wheeler loan is permitted by many lenders, including Stashfin. Before pre-closure, always check for any associated charges.