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Bike vs Car Loan: Which one to choose?

Bike vs Car Loan: Which one to choose?

Bike vs Car Loan: Which one to choose?

Two-Wheeler Loans Vs Car Loans

Looking to find the bike that just passed behind you, flashing with a racing “Vrooooo…m” sound is one of such incidents that make you wonder if you could own one such bike some day. Likewise, even when a car passes by, it makes you look in the direction twice, just to catch one glimpse of the glorious vehicle. Such moments make you relive your dream of owning your favorite vehicle, albeit from a distance. What if we told you having the perfect bike or car may be easier now with two-wheeler and car loans? Through this guide, we aim to explain how two-wheeler loans are different from car loans. By giving a detailed two-wheeler loan Vs car loan, we hope to help you figure which vehicle you could buy in the coming months.

Bike Vs Car Loan

A two-wheeler loan is much different from a car loan. The lender sees both the loans as two different types of investments. The price of a bike is generally less than that of a car. With the rise in fuel prices, common people have started using motorcycles more since it is a cheaper mode of commute. It has turned into a necessity now. Also, due to COVID-19 and the rise of home delivery-based jobs, the demand for motorcycles has increased and the default rate has gone down. All these factors have made a two-wheeler loan process simpler than a car loan process.

Factors that Differentiate Two-wheeler Loan Vs Car Loan

  • Several factors make a bike loan different from a car loan
  • The eligibility criteria for a bike loan are different from that of a car loan
  • The repayment tenure of a bike Loan is different from that of a car loan
  • The interest rate charged in a bike loan is different from that of a car loan, though the rates are not fixed It varies as per the lender
  • The loan amount sanctioned for a car loan is usually much higher than that of a bike loan

Let's understand the different factors in detail now: Eligibility Criteria

  • The eligibility criteria for a car loan are more extensive than that for a bike loan. If you apply for a car loan, the lender will check your credit history, past repayment pattern, history of past loans, defaults, stability of the income, etc. But, availing bike loan is quite easy. The application process is simple and you can avail bike loan at ease.

Repayment Tenure

  • The repayment tenure of a bike loan is less than that of a car loan. It is seen that generally, the repayment tenure for a bike loan is 2-3 years, which is less compared to a car loan, which can go on for nearly 5 years; though the tenure depends on the lender and can also be extended. The car’s age at the time of the purchase (+) loan’s tenure should not be more than 10 years (in special cases, 12 years).

Interest Rate

  • The interest rate charged in a two-wheeler loan is generally less than that of a car loan. Having said that, in some cases, the interest rate charged on the bike loan can be more. The same lender can charge different two-wheeler loan interest rates for different bike manufacturers. It is seen that the interest charged on premium bikes is less than on general category bikes.

The similarity between Bike and Car Loan

Though there are many differences between bike and car loans, there are many similarities as well. The documents required for the loan processing are more or less the same. The main documents required are salary slip, income proof, bank statement, proof of residence, identity proof, PAN Card, etc. Both car and bike loans are secured loans. Unlike a personal loan, which is collateral-free, bike and car loans are secured. So until and unless you make the final payment, your bike or car will be owned by the lender.

How to get a Two-Wheeler Loan?

Now that you have learned the difference between a car and a bike loan, let’s learn how to apply for a two-wheeler loan. The process of applying for a two-Wheeler loan can be different for different lenders, but still, the basic process remains the same.

The steps to apply for a two-wheeler loan are:

  • First, fill out the loan application form with all your details and the bike details you want to buy.
  • Your personal information will include your name, age, occupation, etc. Keep the original documents to validate the details filled in the application form.
  • Check for your eligibility and loan tenure from the bank representative or online. The eligibility and loan tenure will differ as per the lender.
  • Submit the loan application. Now with digital banking, the loan gets processed in minutes. The next step is to get your loan approval letter from the lender. The loan approval letter is the confirmation that your loan is granted.
  • Now it’s time to get your bike. Go to the dealer with the loan approval letter and get the bike you always wanted.


Bike vs car loans are different but still similar in many aspects. If you are planning to buy a bike, then first start researching the lenders that are offering the best interest rates in the market. Interest rates vary with the loan tenure. So try to adjust the tenure of the bike loan accordingly. Likewise for buying a car. Whether you buy a car or a vehicle, it is a moment to celebrate; enjoy your new purchase!

Get a two wheeler loan at low interest rates