Re: Duke 200 is it a best choise?

Query Approved

Re: Duke 200 is it a best choise?

I can provide my inputs for the second part of your query.
I just took a personal loan to get a bike, couple of reasons.
1.Two wheeler loan is fixed rate(interest starts lower ~7.5% and above), that is you will be paying the same EMI every month until the end of the loan amount.
Personal loan is floating (mostly and interest starts higher ~12.75% or higher) and EMI reduces on a monthly basis. They almost come to similar total cost to pay back.
2. In personal loan you don't have to surrender your bikes documents, this will be useful if are thinking of selling the bike before the end of EMI period.
3. Personal loan can be topped up later on, of in case you needed more money for something else.
Personal loan is easy to get, since banks are interested in it.
That's more than a couple of reasons, but if I have been wrong please forgive me.

Re: Duke 200 is it a best choise?

Correct me, if I am wrong. But EMI by the very nature of it won't reduce in any kind of loan unless, of course you pre pay some amount. EMI remains same for the entire duration of loan.

Second, personal loans are costlier because it is not backed by any security and should one default, bank has lesser options in getting it back.

Only problem with a bike loan would be that you would be unable to transfer/sell it easily. Other than, it would be more prudent to go with a bike loan.

On the other hand, might I suggest that if you have a FD with a bank, then take a loan against it. Banks typically give around 90% of the FD amount. This is without any jhanjhat and your loan would be typically processed in a day. Interest rate would be 1% but you won't get any interest on FD.

Re: Duke 200 is it a best choise?

That is true, the EMI you pay won't reduce, but the amount that goes into the loan repayment increases on a monthly basis and at the last EMI, it will be entirely the loan and there is maybe a few rupees of interest only.
As per the banks calculation, the fixed rate and their floaty rate came to more or less the same amount.
Biggest advantage as per me would be that it can be topped up rather than applying for a loan again and bike can be sold with no worries of NOC.

Re: Duke 200 is it a best choise?

Guys, sorry for the delay but i came across few of my friends who said vehicle loan is better any how we are not going to sell the vehicle within 2 years span.

And personal loan interest rate is higher than vehicle loan which is 10-11 %. and nowadays we are getting floating interest in it.

so i am thinking of going for a bike loan. but my doubt is weather to go for a duke or something else?

Re: Duke 200 is it a best choise?

Some correction on this: The personal loan is not floating rate. Floating rate means the interest rate can go up/down as per the prevailing RBI lending rates. What you meant was "reducing balance". Again, fixed rate and reducing rates have nothing to do with how good that loan is. "Fixed rate" is just another way of representing the effective interest rate. A reducing rate of 12% is equal to almost 7% on fixed rate. So, a figure of 7% is quoted to the customer to make the interest rate look smaller.

All loans: bike/personal/home are on reducing balance type. If you took a loan of Rs 1 lac for 3 years at 12%, your EMI is Rs 3,321. In the first EMI, Rs 1000 is the interest part (1,00,000*12%/12) and the remaining Rs 2321 (3321-1000) goes towards principal payment. Next month, Out of the 3321 EMI, interest part is Rs 977 (97,679*12%/12) and remaining 2,345 (3,321-977) goes towards principal payment. If you see here, the interest "reduced" from Rs 1000 to Rs 977 in the second month, and hence the name "reducing balance". If you add up all the interest payments in 36 months and calculate the effective rate, you arrive at "fixed balance" interest rate.

I hope that was not too technical :P