Buying a bike with EMI paid from either a credit card or with a two-wheeler loan provided by a bank or an NBFC (Non-Banking Financial Company) will have its own sets of advantages and disadvantages. You can pick which is better based on your personal requirements.
If you want a long tenure to repay the loan, then a two-wheeler loan would be a better idea as they offer tenures up to 4 years. Some banks even offer up to 5 years, but it is not very common. EMIs paid from credit cards have to be repaid within 2 years. That is the maximum tenure that is offered.
If you want to repay the loan in a very short duration, then EMI paid from your credit card would be sensible as the interest rates for a two-wheeler loan can go up to 17% based on the individual’s credit profile whereas the first few months of interest rates on EMI paid from credit card are comparatively lower than longer tenures of 1 to 2 years for the same. You can then opt for a tenure of a few months and close the loan soon. Whereas, in a bike loan, you will have to pay pre-payment charges if you wish to close your loan earlier than the tenure decided upon.
Interest rates are much lower in the case of a bike loan as they begin at just 9%, whereas EMI on credit cards begin at around 13% and increase with a longer tenure chosen.
Also, two-wheeler loan amounts are generally inclusive of the cost of registration and insurance cover which is an added benefit for the customer.
If you do not have a good credit score, then an EMI paid from a credit card would be a good idea as a two-wheeler loan can be rejected if one’s credit score is very poor. A loan rejection can further negatively impact one’s credit score.