Wed. May 29th, 2024
Wheeler Loan

When it comes to purchasing a two-wheeler, many people choose to take a loan to finance the purchase. A two-wheeler loan is a loan that is taken to buy a two-wheeled vehicle, such as a scooter or a motorcycle. In this article, we will explore the pros and cons of getting a two-wheeler loan.

Eligibility Criteria for 2-Wheeler Loan

Before we dive into the pros and cons, let’s discuss the eligibility criteria for getting a two-wheeler loan. The criteria may vary among lenders, but here are some common requirements:

– Age: The borrower must be at least 18 years old and not more than 65 years old.
– Income: The borrower must have a steady source of income to repay the loan. Typically, lenders require a minimum monthly income of Rs. 10,000 to Rs. 15,000.
– Credit Score: A good credit score is a crucial factor in getting approved for a loan. Lenders typically require a credit score of at least 750.
– Documentation: The borrower must provide necessary documents such as identity proof, address proof, income proof, and a photograph.

Pros of 2-Wheeler Loan

1. Easy to Get: Two-wheeler loans are relatively easy to get. The eligibility criteria are straightforward, and the documentation process is simple.

2. Flexibility: Two-wheeler loans offer a high degree of flexibility in terms of loan amount, repayment period, and interest rates. Borrowers can choose a loan amount they need, and the repayment period can be up to five years.

3. Build Credit Score: Taking a two-wheeler loan and repaying it on time can help build a credit score. A good credit score can help borrowers get better loan deals and other financial products in the future.

4. Interest Rates: The interest rates on two-wheeler loans are comparatively lower than on personal loans. This means borrowers can save on the interest amount and repay the loan faster.

5. Disbursal Time: Two-wheeler loans are usually disbursed quickly, which means borrowers can buy the vehicle faster.

6. Better than Renting: Taking a two-wheeler loan is a better option than renting a vehicle. Renting a vehicle does not provide any long-term benefits, and the cost of renting can be high over time.

Cons of 2-Wheeler Loan

1. High EMIs: Two-wheeler loans have a relatively shorter repayment period, which means the monthly EMIs (equated monthly instalments) can be high. This can be a financial burden for some borrowers.

2. Liability: Taking a loan means that the borrowers need to repay the loan amount irrespective of their financial situation. If the borrower fails to repay the loan, it can adversely affect the credit score.

3. Loan Repayment Burden: Taking a two-wheeler loan means that the borrower must repay the loan amount along with the interest. This means they must bear the burden of the loan repayment for a certain period.

4. Repayment Schedule: Any missed EMIs can lead to penalties. Maintaining the repayment schedule can be a challenge for some borrowers, which can lead to additional costs and penalties.

5. Interest Rates: While the interest rates on two-wheeler loans are relatively lower than personal loans, they can still be high depending on the borrower’s credit score and the lender’s policies.

6. Additional Charges: Apart from interest rates, lenders may charge additional fees for processing the loan, pre-payment charges, and foreclosure fees.

Personal loan Vs 2-Wheeler loan: Comparative analysis

Lower Interest Rates

First and foremost, two-wheeler loans typically offer lower interest rates than personal loans. The interest rates on two-wheeler loans are usually in the range of 9% to 15%, depending on the lender and the borrower’s creditworthiness. In contrast, personal loans can have interest rates ranging from 10% to 24%.

When taking a personal loan, the interest rate can vary depending on various factors such as the borrower’s credit score, income, and employment history. The interest rate on a personal loan can be relatively higher than a two-wheeler loan due to the higher risk factor for the lender.

On the other hand, two-wheeler loans are secured loans where the two-wheeler itself serves as collateral, which reduces the lender’s risk. This, in turn, leads to a lower interest rate on two-wheeler loans compared to personal loans.

Flexible Repayment Options

Two-wheeler loans also offer a high degree of flexibility in terms of repayment options. Borrowers can choose a repayment tenure that suits their financial capabilities. The repayment tenure for two-wheeler loans can vary from six months to five years.

Personal loans, on the other hand, may come with a fixed repayment tenure. Borrowers may not have the freedom to choose a repayment period that suits their financial needs. Depending on the lender, the repayment tenure for personal loans can range from one year to five years.

Loan Amount and Utilization

When taking a personal loan, there may be restrictions on the loan amount and utilization. Lenders may limit the loan amount and impose restrictions on the utilization of the loan.

In contrast, two-wheeler loans do not have such restrictions. Borrowers can choose the loan amount they require to purchase the two-wheeler model of their choice and utilize the funds as per their needs.

Faster Disbursal

Two-wheeler loans also offer a faster disbursal time compared to personal loans. When taking a two-wheeler loan, the two-wheeler itself serves as collateral for the loan amount. This reduces the risk for the lender, and as a result, they can approve the loan faster.

In contrast, personal loans may take longer to disburse as they are unsecured loans. The lender may require additional documentation and checks before disbursement, which can prolong the process.

Lower Processing Fees

When taking a personal loan, borrowers may have to pay higher processing fees compared to two-wheeler loans. Personal loans are unsecured loans, and lenders may impose higher processing fees to offset the risk of the loan.

Two-wheeler loans, being secured loans, have lower processing fees since the two-wheeler itself acts as collateral. As a result, borrowers can save on processing fees by taking a two-wheeler loan.

Build Credit Score

Another advantage of taking a two-wheeler loan is that it can help build the borrower’s credit score. By making timely payments on the loan, the borrower can establish a good credit history, which can be helpful for future loan applications and other financial dealings.

In contrast, personal loans do not offer the same benefits as they do not have a specific purpose. A personal loan can be used for any purpose, which may not necessarily have a positive impact on the borrower’s credit score.

Apps that offer quick 2-Wheeler loan

Bajaj Finserv App

One of the leading providers of two-wheeler loans, Bajaj Finservoffers an app that enables customers to apply for a two-wheeler loan conveniently. The app is available for both Android and iOS devices and is user-friendly, intuitive, and streamlined.

With the Bajaj FinservApp, customers can easily check their loan eligibility, calculate their EMI, upload documents, and track their loan application status. The app also provides a unique feature of pre-approved loan offers for existing customers.

Customers can apply for a two-wheeler loan with Bajaj Finserv through the app and get instant approval, with the amount disbursed within 24 hours of the loan approval. The app also offers access to exclusive deals and discounts from partner dealerships.

HDFC Bank App

HDFC Bank is another popular lender that offers two-wheeler loans through its app. The app is easy to use, and customers can apply for a two-wheeler loan directly from the app. Customers can also check their loan eligibility, calculate their EMI, and track their loan application status.

HDFC Bank offers competitive interest rates and flexible repayment options, making it a popular choice among customers. The app also provides features like the EMI calculator, loan eligibility calculator and an option to apply for a loan renewal.

ICICI Bank App

ICICI Bank is a well-known lender in the two-wheeler loan market segment. The ICICI Bank app offers customers the convenience of applying for a two-wheeler loan from the comfort of their homes. Customers can check their loan eligibility, calculate their EMI, and track their loan application status from the app.

The app also allows customers to access their loan account details, make online payments, and request for disbursement of loan amounts directly into their accounts.

Customers can also benefit from the ICICI Bank’s tie-ups with several dealerships, offering them easy and hassle-free loan disbursement while purchasing a two-wheeler.


In conclusion, getting a two-wheeler loan has its pros and cons. Borrowers must consider their financial situation, income source, and repayment ability before opting for a loan. The eligibility criteria, flexibility of loan terms, interest rates, and time to disbursal must also be taken into consideration. It is advisable to compare the offers from different lenders before making a final decision on a loan. Borrowers should also ensure that they can maintain a repayment schedule to repay the loan on time without incurring any penalties or additional charges.

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