How Does Zero Down Payment Two Wheeler Loan Work - Explained!
New Delhi : Two-wheelers can cost anywhere from ₹30,000 to more than an eye-watering ₹80 Lakhs. The majority of individuals looking to purchase a two-wheeler opt for commuter or naked bikes in India. On the other hand, young adults and adventure seekers opt for cruiser, sports, or tourer bikes, which can cost around ₹2-5 Lakhs. Thus, depending on your proclivity and need, you might have to spend a considerable amount while purchasing a two-wheeler. Considering this can be expensive, 75 percent of prospective bike owners in the country apply for two-wheeler loans to finance their purchases. Individuals also use two-wheeler loan calculators to arrive at repayment terms that are convenient for them.
You can approach NBFCs, banks and captive finance companies to avail of a two-wheeler loan. Typically, lenders offer 65 - 90 percent of the on-road price of the two-wheeler as the loan amount. However, certain lenders – mainly non-banking financial companies (NBFCs) – offer up to 100 percent funding of the two-wheeler’s on-road price. This amount also covers additional fees such as RTO and insurance premium charges, and you won’t have to spend any money from your pocket.
What is a down payment on a loan?
When you make any high-value purchase, such as a two-wheeler or even a house, you are required to make a certain payment upfront. When it comes to two-wheelers, different lenders have different margins – usually around 15 - 30 percent of the bike’s on-road price – that the prospective bike owner needs to pay upfront. This is known as a down payment; that is, the difference between the bike’s cost and the loan amount approved by the lender. Usually, the higher the cost of the two-wheeler, the greater the down payment required.
Let us take an example to understand this concept. If you are purchasing a two-wheeler costing ₹2 Lakhs and the lender covers 85 percent of the on-road price, you have to pay the remaining 15 percent. This translates to ₹30,000. This is the down payment you have to make while purchasing the vehicle.
What is a zero down payment bike loan?
Certain lenders cover the two-wheeler's entire cost, including the registration fees and insurance premium charges. In such cases, you won’t have to worry about liquidity or arranging for additional funds. This is known as a zero down payment bike loan, as you won’t have to make any down payment. By paying a nominal processing fee, you can avail of funds covering the vehicle’s on-road price.
Features and benefits of a zero down payment bike loan
● 100% financing - When you get access to a zero down payment bike loan, you won’t have to worry about arranging additional funds to purchase the vehicle. The loan amount will cover the entire cost of the two-wheeler.
● Convenient EMIs - You can repay the loan amount in bite-sized monthly installments. You can use a two-wheeler loan calculator to find the most convenient EMI amount and tenure. Additionally, the repayment period ranges from 12 months to 60 months.
● Pay only the processing fees - While availing of a zero down payment bike loan, you only have to pay a nominal processing fee.
● Minimal documentation - You must provide basic KYC documents, such as your ID, address, and employment or income proof.
● Nominal interest rate - The interest rate is marginal and ranges from 6.85 percent to 28.3 percent.
● Significant loan amount - You can also get access to a significant loan amount, which can go up to ₹30 Lakhs.
Eligibility criteria for getting a zero down payment bike loan
Before applying for a zero down payment bike loan, it is important that you check the eligibility criteria. The common criteria include the following.
● Age - You should be at least 21 years old (18 for certain lenders) and at most 65 years by the end of the loan tenure.
● Credit score - Most lenders require applicants to have a good credit profile and a minimum credit score of 750.
● Income - You should earn at least ₹12,000 per month. However, this can vary from lender to lender.
● Employment status - You should either be a salaried employee or self-employed. You should also have a work experience of at least one year.
● Residence - You should be residing in the same city for at least one year.
Calculating repayment terms after getting a zero down payment bike loan
Before applying for a zero down payment bike loan, you can use the two-wheeler loan calculator – which you can find online – to calculate the repayment terms. Changing the repayment tenure and interest rate variables will give you different EMI amounts. You can then find the ideal loan amount, interest rate, and repayment tenure combination and apply for the two-wheeler loan.
How to apply for a zero down payment bike loan?
Several lending entities offer up to 100 percent funding of the vehicle’s on-road price. Once you find the lending institution that offers the best terms, you can apply for the bike loan in the following manner.
Step 1: Visit the lender’s website or visit their office
Step 2: Fill out the application form if you are applying for the loan online
Step 3: If required, upload the KYC documents
Step 4: Submit the application form, and a representative from the lending entity will get in touch with you
Step 5: The lender will verify your loan application and will let you know about its approval status
Whether you want to purchase a super bike or a normal commuter bike, you can apply for a zero down payment bike loan to finance the purchase. Visit Bajaj Markets and apply for a two wheeler loan, and benefit from nominal interest rates and quick loan disbursals. You also get up to 100 percent funding of the vehicle’s on-road price. Simply use the two-wheeler loan calculator to find the best repayment terms and get access to the loan amount.
