Why a Personal Loan is Beneficial to Purchase a Bike Above 350cc in 2025

With the new GST reforms set to be implemented from September 22, bikes over 350cc will now fall under the 40% GST slab, significantly increasing their cost. This is where a Personal Loan can help you finance the purchase of a premium motorcycle with benefits like its unsecured nature and no end-use restrictions. In this blog, we will explore how a Personal Loan can help you secure your dream bike even with the increased cost of acquisition. Read on to know more! 

Benefits of a Personal Loan to Purchase a Premium Motorcycle
 

Personal loans offer several benefits over traditional financing options when it comes to funding the purchase of your dream motorcycle. The following are some of the most compelling advantages of a Personal Loan:

Complete On-Road Financing
The most significant advantage of using a Personal Loan for bike purchases is the ability to secure 100% of the on-road cost. Unlike traditional motorcycle financing options, personal loans are not restricted to the bike’s ex-showroom value. You have no expectation of a down payment, and you can apply for a loan amount that covers the ex-showroom price, the 40% GST, road tax, and insurance.

Also Read: Instant Personal Loan to Buy Used Bike

No Collateral Requirement
Personal loans are unsecured financial products, meaning they do not require you to pledge any asset as security. A bike loan being a secured financing option is certainly easier to get approval for, but the ownership is never truly yours until you pay off the loan in full.

With a Personal Loan, there’s no hypothecation, i.e., the lender has no claim on your motorcycle. Your Registration Certificate (RC) is free from any bank’s lien, giving you complete and undisputed ownership from the first day. Additionally, if you decide to sell the bike later, you can do it without needing a ‘No Objection Certificate’ (NOC) from a lender, which simplifies the resale process significantly.

Funding Freedom for Accessories
A premium motorcycle experience goes beyond the machine itself, with riding gear and accessories helping to complete the look. A personal loan’s flexibility accommodates this reality with ease, thanks to no end-use restrictions. You can apply for as high an amount as you want to and use any remaining amount to invest in high-quality safety gear, performance enhancements, or touring accessories.
Plus, being able to bundle up all your expenses into one loan with a consolidated monthly EMI amount makes financial management simpler. Your savings stay intact for other financial goals or emergencies while you affordably fulfil your dreams of owning a bike.

Also Read: Your Wallet Will Thank You: Complete Guide to What's Getting Cheaper from Sep 22, 2025

Simplified Process and Quick Disbursal
The application and approval process for a Personal Loan has been simplified with digitalisation of loan processes by almost all lending institutions in India. In addition, the documentation required is often simpler, focusing primarily on your KYC and income verification rather than vehicle-specific documents.
Digital-first lenders can approve and disburse the loan amount directly to your bank account, often within 24 to 48 hours. This makes a Personal Loan a more convenient choice when it comes to funding the purchase of a 350cc plus motorcycle. 

Predictable Repayments and Flexible Tenures
Personal loans provide stability and control over your financial planning. Most personal loans come with a fixed rate of interest, meaning your EMI amount remains constant throughout the loan tenure. This protects you from market fluctuations and makes budgeting easy. 
You can also choose a repayment tenure that suits your financial comfort, typically ranging from 12 to 60 months. This allows you to balance the EMI amount with the total interest you will pay over the life of the loan.

Understanding the New GST Reforms

While potential consumers would normally turn to motorcycle financing options to fund the purchase of a brand new two-wheeler, recent GST reforms have led to a steep hike of the price of larger motorcycles, making personal loans the more ideal option. Post the GST Council meeting in September 2025, the GST on a bike above 350cc is a flat rate of 40%. This change will come into effect from September 22, 2025.

To illustrate, consider a premium bike with an ex-showroom price of ₹4 Lakh:
●    Ex-Showroom Price: ₹4,00,000
●    GST at 40%: ₹1,60,000
●    Price Before Registration: ₹5,60,000

This ₹1.6 lakh tax component must be paid upfront and makes loan acquisition expensive due to an increased overall amount and down payments. 

Also Read: Administrative Structure of GST in India

To Conclude

The 40% GST may seem like a barrier to getting a premium bike, but a Personal Loan can help you navigate this obstacle conveniently. You can get the amount you need instantly, with a practical repayment structure. Since it is unsecured, you don’t have to worry about losing ownership of your bike either.

With an amount of up to ₹50 Lakh, a Personal Loan from Poonawalla Fincorp can turn your dream of owning a high-end bike into reality. Apply with a 100% digital process and get the funds you need without any delay!

Frequently Asked Questions 

What is the exact GST on a bike above 350cc in India for 2025?
Motorcycles with an engine capacity greater than 350cc are subject to a 40% Goods and Services Tax (GST) as per the new GST reforms.

Why is a Personal Loan a better option than a two-wheeler loan for expensive bikes?
A Personal Loan is more favourable because it can finance the bike’s full on-road price, including the 40% GST, minimising your upfront down payment. It is also an unsecured loan, so your bike is not held as collateral.

What is ‘hypothecation’ and why is it important to avoid?
Hypothecation is when a lender has a legal claim on your vehicle until the loan is fully repaid. Avoiding it means you have full ownership from day one, don’t risk losing your bike upon failure to repay the loan, and can sell the bike without needing the lender’s permission.

Can I get 100% financing for a bike with a Personal Loan?
Yes, subject to your credit score and eligibility, you can get a Personal Loan that covers 100% of the bike’s on-road price.

What is the typical tenure for a Personal Loan for a bike?
Personal Loan tenures generally range from 1 to 5 years, allowing you to choose an EMI amount that fits your budget.

How long does it take to get a Personal Loan?
Leading NBFCs with digital processes can approve and disburse a Personal Loan in as little as a few hours to 2-3 business days after successful verification of documents.