Are you wondering if you should use your credit card to purchase a two-wheeler? Don’t worry. You aren’t the only one. Most buyers face this dilemma as paying through credit cards has its advantages and disadvantages. So, let us look at a detailed account of when it’s advisable to get a two-wheeler on credit cardand when it’s not.
Pros of using a credit card
1. Pay off EMIs quickly
Opting for credit card EMIs to finance a two-wheeler purchase is ideal when you’re looking to repay instalments quickly. Most credit card issuers provide tenures of up to 2 years. Hence, buying a bike on credit card will help you pay off EMIs and clear your dues quickly.
2. Improve your credit score
Did you know that credit bureaus consider your credit card transactions while calculating your CIBIL score? Yes! Besides, your credit card usage does not include interest costs as long as you pay your outstanding bill in full by the due date. This means, if you want to improve your credit score, buying your bike through a credit card can is an excellent solution.
When you make timely credit card EMI payments, you successfully boost your CIBIL score and qualify for future loans easily. However, you must avoid exhausting over 30% of your credit limit. This is because it can negatively impact your CIBIL score.
Additional Read: CIBIL Score for Vehicle Loans
Cons of using a credit card
1. High interest rates
While credit cards can help you repay EMIs quickly, they also incur higher interest rates. Credit card EMIs can entail a 14-18% interest rate, along with processing fees which vary depending on your card issuer and tenure. Besides, with a smaller tenure, you may be required to pay bigger EMIs which can take large chunks from your monthly income.
On the other hand, you can get a two-wheeler loan at significantly lower rates between 10-13%. With Tata Capital, you can avail of bike finance with an attractive rate starting at 10.75%. Moreover, with loan tenures of up to 5 years available, you can comfortably repay your loan with smaller instalments.
2. Get a better loan offer
If you have an excellent CIBIL score, preferably 750 or above, you can qualify for a loan that finances 100% of your purchase costs easily. What’s more, you can even negotiate loan terms to secure more attractive bike loan interest rates and flexible EMI tenures.
Additional Read: 5 Habits to Have to Get yourself in the above 800 Credit Score Club
As you can see, getting a bike on your credit card has its pros and cons. Your final decision must depend on your repayment capacity, financial fitness, choice of bike, CIBIL score, and more.
If you are looking for bike finance at attractive loan interest rates, come to us at Tata Capital. Get up to 100% funding on your ride with flexible EMI plans and extended tenures. We offer quick and easy processing so that you can bring home your dream bike hassle-free.
You can also use our two-wheeler loan EMI calculator to check your monthly instalments and interest amount in advance. So, why wait anymore? Click here to get two-wheeler finance today!