Better option to buy the bike: EMI paid from credit card or two wheeler loan

Buying a bike with EMI paid from either a credit card or with a two-wheeler loan provided by a bank or an NBFC will have its own sets of benefits and drawbacks. You'll pick which is best based on your personal requirements.

If you liked an extended tenure to repay the loan, then a two-wheeler loan would be a far better idea as they provide tenures up to 4 years. Some banks even offer to 5 years, but it's not quite common. EMIs paid from credit cards need to be repaid within 2 years. That be the maximum tenure that's offered.

If you would like to repay the loan during very short duration, then EMI paid from your credit card would be sensible because of the interest rates for a two-wheeler the 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 cards are comparatively less than longer tenures of 1 to 2 years for the same. You'll then choose a tenure of a few months and shut the loan soon. Whereas, during a two-wheeler loan, you'll need to pay prepayment charges if you would like to shut your loan before the tenure decided upon.

Interest rates are much lower within the case of a two-wheeler loan as they start at just 9%, whereas EMI on credit cards begin at around 13% and increase with a longer tenure chose.

Also, two-wheeler loan amounts are generally inclusive of the value of registration and insurance cover which is another 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 is often rejected if one’s credit score is extremely poor. A loan rejection can further negatively impact one’s credit score.