The benefits of zero down payment two-wheeler loans
Article by Drivio | 29th Apr 23
A zero down payment two-wheeler loan will help you purchase a bike without making an upfront down payment. The bank sanctions 100% of the price of the two-wheeler, which gets converted into easily manageable EMIs.
Worried about arranging a lump sum amount to make the down payment on your new motorcycle? Well, reputed banks and NBFCs have come up with zero down payment two-wheeler loan facilities! Just as the name suggests, you need not make any upfront payment when you purchase your motorcycle. Sounds interesting?
In this article, you will get to know the loan benefits of these financial privileges which don’t require you to make any down payment. So, if you are in a financial crunch and not in a position to shell out the down payment to purchase a new bike, simply get a zero down payment loan.
A motorcycle is a necessity today, considering that it serves as an economic and fast mode of transportation. Why delay your dreams of purchasing a two-wheeler just because you don’t have a sizable amount to pay at the beginning?
What is a zero down payment loan for two-wheelers?
Before understanding what a zero down payment loan is, let’s take a look at the concept of down payment.
When you purchase a two-wheeler by taking a bank loan, the lender finances 70% to 85% of the price of the motorcycle. You need to pay the remaining 15% to 30% of the value upfront. This amount, which you need to fork out before the lender finances the rest is known as the down payment.
If you have a decent credit score, some banks and NBFCs may finance up to 90% of the loan amount. This leaves just 10% of the purchase value of the bike to be paid as down payment.
Now, if you qualify for a no down payment loan , you need not pay any upfront amount to the lender. This implies that your bank or NBFC will finance 100% of the price. You simply need to pay the EMIs every month throughout the loan tenure.
Usually, financing institutions charge a processing fee while disbursing a no down payment loan for motorcycles. Some banks club this amount into your liabilities, and you simply need to pay small, manageable EMIs every month.
What are the features of a two-wheeler loan?
Let’s take a look at the features of a zero down payment loan for a two-wheeler.
1. 100% financing
There’s no upfront payment for the borrower to shell out with a no down payment loan. You simply need to have a decent income flow and credit score to qualify for this type of loan. So, even if you start using your motorcycle after purchasing it from the dealer, you need not pay anything at the beginning. The loan sanctioned for you will cover the entire cost of the bike.
2. Small processing charge
Most types of loans come with a small processing charge. The facility available with reputed banks and NBFCs is that they include this processing fee into the loan amount. This way, you need not stress yourself financially at the outset. Usually, the processing charge is very small, and calculated as a percentage of the entire loan sanctioned. Dividing this amount over two to four years, the monthly share looks manageable.
3. Convenient EMIs
One of the best loan benefits of a no down payment loan is the small monthly instalments you need to pay. Usually, bike loans come with a tenure ranging from 2 to 5 years. In case you are having other ongoing liabilities, it’s wise to choose a longer tenure, like 4 to 5 years. This way, you can split your liabilities into bite-sized EMIs. Just like a normal two-wheeler loan, zero down payment motorcycle loans also bring you this privilege.
Qualifying for a no down payment loan doesn’t require any additional documentations. You need to furnish your salary or income proof, residential proof, identify proof, credit score, and a few other documents. Some banks and NBFCs even don’t ask for your credit report since a bike loan is unsecured. It’s easy to acquire a zero down payment loan to finance your motorcycle since there’s no complex documentation or screening process involved.
5. Low interest rate
Typically, reputed banks and NBFCs provide low-interest two-wheeler loans with 100% financing to eligible owners. The rate of interest ranges from 7% to 25%, or a little beyond this bracket. Having an excellent credit score with low credit utility might qualify you for a low interest rate.
6. Sizable loan amount
Well, if you want to purchase a luxury or premium bike, a zero down payment can help you! Depending on your income and financial stature, banks might agree to fund sizable amounts as loans. Given that premium bikes are costly, the down payment would also be higher. However, with a no down payment loan, you need not pay this upfront amount.
What are the benefits of a zero down payment two-wheeler loan?
Have a look at the loan benefits of a motorcycle financing with zero down payment.
- You need not worry about putting aside funds or saving money to purchase your two-wheeler. The creditor will sanction a loan that covers the purchase price of the vehicle. You simply need to pay off the EMIs every month.
- Acquiring a zero down payment two-wheeler loan ensures that your cash flow isn’t disturbed.
- Given that most lenders process two-wheeler loans with zero down payments online, you can quickly get the amount disbursed to your account.
- You need just a few documents to obtain a no down payment loan.
Owning your bike shouldn’t be a distant dream anymore! If you are facing financial crunches to accumulate funds for the down payment, simply ditch the process by obtaining a zero down payment loan. Reputed banks and NBFCs are offering low-interest no down payment loans with flexible tenures. Depending on your cash inflow, you can customize the loan and pay off the EMIs without any stress.