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Bike Loan vs Cash Payment - Which is Good Option to Buy Bike?

Buying a bike is an event full of excitement as you browse images of different bikes, read specifications and look at the price tag. After all, most of us would love to own the most expensive bike available in the market, but, it is our budget that is the main differentiator. In fact, one of the biggest debate at the time of buying a bike is – should I use my savings or should I opt for a bike loan.

Here, we are looking at bike loan vs cash payment.

Pay EMI or use your Savings

The main argument in the bike loan vs cash payment debate lies in which one to opt for. If you plan to use your savings, it means that you may not have enough money in your account to meet other expenses in the future. On the other hand, if you take a loan, it means that for the tenure of the loan, you have to make monthly instalments or EMIs. In both cases, you have to have a financial plan in place.

Save or Buy Now

Not many of us have savings we can use to make purchases of the bike of our choice. It is then time to decide, should I wait for 12-18 months, save up enough to buy a bike? Or, should I invest in a bike now, and make the payments over a fixed tenure.

Both the options are viable, but, keep in mind – for the former, you may have to settle for a bike that is not the latest in the market. Additionally, taking a loan means paying an EMI or paying the penalty on missing an EMI. Use the bike EMI calculator to know the instalment so that you are prepared. All you will need to do is select a loan amount, add in a rate of interest, starting at 7%* minimum, and loan tenure to know an approximate amount you will have to keep aside every month.

Ease of using Funds or Going for a Loan

Taking a loan is not as difficult as some people make it out to be. As long as you meet the lender’s eligibility, have a good credit score and submit all the documents asked for, it is very easy to apply for and get a loan sanctioned. Using savings, on the other hand, does not have any such hassles. Always take bike insurance so that your services and repairs are covered.

Making a Choice

Deciding the outcome of the savings vs bike loan battle is one that you have to take for yourself, as the points mentioned above are generic and may not fit the bill for your unique requirement. The debate cannot be answered by anyone other than yourself! What we can tell you is that if you have the cash to spare, think of buying the bike without a loan. On the other hand, you do not have access to such large amounts of money, but you have a steady income, then a bike loan is a right path for you.


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