Fullerton India Credit Co. Ltd. is Now SMFG India Credit Co. Ltd.

5 Common Bike Loan Myths You Should Ignore

Published on Sept 15, 2022Updated on Jul 17, 2023

5 Common Bike Loan Myths You Should Ignore

In today's exploding population, wherein traffic congestion is increasing, footpaths are getting narrower, and public transport is getting crowded,  a bike seems like a convenient mode of transport. A car is expensive, has issues with regards to parking space and is not always fuel efficient. Thus, a bike or two-wheeler can be considered to be the most feasible, and economical mode of transport. Bikes are the mode of transport affordable by all income groups.

To make things simpler for the common man, there has been an introduction of bike or two-wheeler loans. SMFG India Credit’s bike loan interest rates are considered to be low and more affordable. To get a clearer understanding of your overall expenditure you can make use of the bike loan EMI calculator. 

However, people are often faced with several misconceptions regarding a bike loan. Let us take a  look and get a clear understanding of the 5 most common myths about bike loan that you should ignore.

1. High Interest Rates

The interest rate applicable on bike loans is not expensive as the loan is backed by an asset or collateral (the bike that is purchased acts as collateral). In case, one is not able to pay the monthly EMI or defaults, the lender has the ownership right to repossess the asset for recovering their dues. The credit risk in the case of a bike loan is lower. It means that the interest chargeable is low. Also, other factors such as the good credit profile and credit score of the borrower help lower the interest rate chargeable.

2. The Credit Score is the ultimate Deciding Factor

It is assumed that if you have a high credit score, then you will definitely get a loan. Only up to an extent should one believe in this truth. The credit score is one of the factors that helps understand if you are eligible to get a loan. The concept of a credit score comes into the picture at the processing stage of your application. The primary aspect taken into consideration before your credit score is your age, income & existing debts. In some cases, lenders will also consider the location of the loan applicant. If they do not provide services in that particular area, the application will be rejected. In general, an overall risk assessment is conducted to understand the profile of the borrower. Depending on your repayment capacity, the loan amount is decided upon.

3. Lengthy And Slow Process

It is a myth that getting a bike loan is a lengthy, slow or tedious process. Normally there are 3 parties involved in the process. They are:

  • The borrower
  • The bike dealer
  • And the lender

In today’s time getting a bike loan is just a few clicks away. An online application needs to be filled with the requisite bike loan documents. Providing that you match the required criteria and have provided all the required documents, the lender will complete the verification process within 48 hours* and upon success, the funds will be disbursed. 

Must Read: 5 Factors that Affect Two Wheeler Loan Interest Rates

4. Only First-Hand Two-Wheelers Are Considered

The most common myth when it comes to bike loans is that the same applies only to first-hand bikes. A person purchasing it from another person and not a bike dealership is considered to be a second-hand sale. It is cheaper than a first-hand bike in most cases. Lenders may approve bike loans on used bikes that are in good condition, however only if the purchase is being brokered through an authorised dealership. The interest rates on used bike loans are also usually much higher. If you need funds to purchase a bike from a friend or associate, it is advisable to go for a personal loan instead.

5. Not Affordable

Bike loans not being affordable is an absolute myth. A bike loan can be taken by individuals who have an income of a minimum of INR 15,000 per month (this criterion may vary between lenders depending on their policy). The EMI repayment scheme can be customized as per your requirements making the whole financing process more systematic and easy. 

6. Low-Interest Rates can be a Trap

Low-interest rates capture the eye but they may be a trap. It is strongly advisable to read the terms and conditions of the loan such as interest rate charged annually, EMI amount, and tenure to understand if the loan is being offered at a suitable rate.


Two-wheelers are definitely making people’s lives simpler. Do not believe in myths as they are meant to disregard facts and discourage the public.

Become a proud owner of a bike with SMFG India Credit’s bike loan. Get maximum loan-to-value, flexible repayment terms, longer tenure and at attractive interest rates. Check the free online EMI calculator to get an estimate of your monthly EMI payments.

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us

Was this helpful?

Yesyes vote
Nono vote
Sorry about that
How can we improve it: