HDFC Bank Personal Loan vs Bike Loan: Which is better for your needs? | Mint

Loans are a convenient way of getting financial assistance if you are in an emergency and need quick cash or if you want to buy your dream vehicle but are falling short of funds. If planned properly, loans can help you achieve financial independence so that you can fulfil your dreams by planning your finances smartly. 

If you are planning to buy a two wheeler for yourself and are considering borrowing a loan, it is important to understand the clear difference between personal loan and two wheeler loan so that you can make the right choice.

Understanding HDFC Bank personal loans

HDFC bank personal loan is an unsecured loan which provides quick cash for all your personal needs. These loans are offered to you based on your credit worthiness as well as your overall profile. These loans do not require collateral and can be availed with minimal documentation, hence, these types of loans are offered with higher interest rates as compared to other loans offered in the market.

HDFC Bank offers personal loans with interest rates starting from 10.85% per annum with loan amounts up to 40,00,000. You can avail these personal loans with repayment tenures up to 5 years. You need to have a minimum monthly salary of Rs. 25,000 and need to be between the age of 21 to 6o years in order to be eligible for the loan. HDFC Bank offers personal loans to both salaried as well as self employed individuals. However, in order to be eligible, you need to have a stable income as well as you need to follow the age, credit score and other eligibility criteria set by the bank.

Understanding HDFC Bank two wheeler loans

HDFC Bank offers two wheeler loans so that you can fulfil your dream of getting yourself a two wheeler and elevate your lifestyle. These loans are also unsecured and do not require collateral. However, in this case, till the time you do not payback the loan, your two wheeler will be under the name of the bank and if in case you fail to repay the loan on time, HDFC bank can seize your vehicle. This loan can only be borrowed to buy a two wheeler and can not be used otherwise as compared to personal loans.

HDFC Bank offers rack interest rates starting from 14.5% which can vary according to the model and variant of the vehicle. The maximum amount which can be borrowed for this loan is the on road price of the vehicle with a maximum repayment tenure of 3 years. You can apply for this loan if you have a minimum salary of Rs. 10,000 and are between the age of 21 and 65 years. Two wheeler loans are offered to both salaried and self employed individuals.

Which one should you choose?

If you are not sure about your vehicle purchase and want to keep your spending options open, then you should go for a personal loan as it provides you with the flexibility of borrowing the money for any personal reason. However, if you are sure that you require the loan amount only to buy a two wheeler, then you can consider getting a two wheeler loan. 

You can evaluate the EMIs using an EMI calculator and compare the two loans so that you can get the best deal for you. Two wheeler loans will attract the risk of losing the vehicle’s ownership if you fail to repay the loan on time.

In conclusion, irrespective of any loan, you must first evaluate the affordability and understand your financial situation and whether you can afford the loan or not. With this you can avoid any unnecessary debts and financial burden through which you can make informed decisions and become financially independent.

(Note: Raising a loan comes with its own risks. So, due caution is advised)