What Are The Differences between Two Wheeler Loans and Personal Loans?

The best option between the two loans depends on the borrower’s situation. Read on to know the difference between a 2-wheeler loan and a personal loan at IIFL Finance.

21 Dec,2022 18:00 IST 1235
What Are The Differences between Two Wheeler Loans and Personal Loans?

People often turn to banks, NBFCs, or online lenders to fulfill their financial needs–some out of desperation, while others out of wise financial decisions. Sometimes, it can be challenging to differentiate which loan to avail of and when. Here’s the difference between a two-wheeler loan and a personal loan.

What Is A Personal Loan?

A personal loan is helpful for various purposes. You can use it to consolidate your debts, renovate your apartment, or plan your dream wedding. Banks, NBFCs or credit unions offer personal loans. Like any other loan, personal loans must be paid back over time, usually with interest.

What Are The Differences Between Personal Loans and Two-Wheeler Loans?

Avail of a personal loan to cover emergencies without a reason for the loan. On the other hand, two-wheeler loans are an easy option for those who want to purchase the two-wheeler of their choice. Significant differences include the following.

• Interest Rate:

Personal loan interest rates are higher than motorcycle loan interest rates. Therefore, you should use them only in emergencies.

• Loan Amount:

Maximum personal loans available are Rs. 5 lakhs, and a two-wheeler loan range between Rs. 25,000 to Rs. 25 lakh per your requirement. The vehicle's value decides the bike loan amount, and a fixed down payment is associated with these loans.

• Approval Time:

Personal loans are usually approved within 24 hours, while bike loans take 4-5 business days.

• Eligibility Criteria:

Personal loan eligibility criteria differs from a bike loan. You can check your bike loan eligibility. Documents required for a personal loan include pay-slips for the last six months, bank statements for the previous six months, proof of address, and proof of identity.

Documents required for a motorcycle loan include identity proof, address proof, pay-slips for the last three months, bank statements for the previous three months, and income tax returns for the last two years.

Know more about personal loans vs two-wheeler loans in the subsequent sections.

Zaroorat aapki. Personal Loan Humara
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Personal Loan vs Two-Wheeler Loan


Personal Loan

Bike Loan

Use case

For any legal activity

Specifically used for purchasing a two-wheeler

Loan amount

Depends highly on the lender. It can range between Rs.5,000 to Rs. 5 lakh

Depends on the bike’s price

Down payment/ collateral

No down payment or collateral is required

Lender might ask 10-12% down payment, and the bike in question is considered collateral

Interest rate

Starts at 16% p.a. (vary from lender-to-lender)

Starts @9.55% p.a. (vary from lender-to-lender)

Loan tenure

Typically, up to 5 years

May extend up to 7 years

Eligibility criteria



Disbursal time

Approval and disbursal can be completed in less than 48 hours

May take up to a week

Which Is A Better Option Between A Personal Loan and Two-Wheeler Loan?

Personal loans are easy, but interest rates can be higher than bike loans. Bike loans have longer repayment terms, but the bike may remain in the lender's possession unless you make payments.

The best option between the two depends entirely on the borrower financial situation. For example, a personal loan is better if you need urgent credit to buy a bike with minimal paperwork. However, a bike loan might be a good choice if you want a more extended repayment period and don't want to provide collateral (the bike in question).

Know your financial situation and goals clearly to make an informed decision.

Avail Of A Personal Loan From IIFL Finance

IIFL Finance provides safe, quick, and hassle-free loans at affordable rates. The processes are swift, with minimal paperwork, instant transfers, competitive interest rates, and flexible repayment schedules.

So, avail yourself of the benefits and apply for a personal loan with IIFL Finance today!

Frequently Asked Questions

Q.1: What minimum down payment is required for a two-wheeler loan?
Ans: Based on the lender, the down payment can range between 10-30% of the two-wheeler’s value.

Q.2: How is a personal loan different from a two-wheeler loan?
Ans: A personal loan is an unsecured loan that is applicable for any purpose. A two-wheeler loan is specifically designated to purchase a two-wheeler that typically acts as collateral in the loan.

Q.3: When should I opt for a personal loan?
Ans: You can apply for a personal loan for any purpose and at any time. You can take a personal loan to consolidate your other debts, plan a wedding, cope-up with an emergency, or buy a motorcycle. You must do a cost-benefit analysis and know your financial conditions and goals to choose between two types of loans that serve the same purpose.

Zaroorat aapki. Personal Loan Humara
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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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