How to Avail Bike Loan without Down payment?

There are two groups of people in India who travel by two-wheelers: the first group chooses a bike because it is economical and practical, and the second group chooses bikes because they love to ride on them. For both groups, buying the best bike or scooter can be difficult because you have to choose the two-wheeler that best suits their needs. Sometimes, you may not have enough funds to buy the one you like. If you plan to buy a bike of your choice but don’t have adequate finances, then you should consider taking a bike loan with low interest and affordable EMIs. This way, you are not forced to send out your entire savings as equated monthly installments. Usually, you are required to make a 15-20% down payment. Both banks and private lenders offer bike loans at affordable interest rates, which you can choose as per your convenience.

A large number of people in India explore the possibility of getting a bike loan without a downpayment. Very few lenders offer this facility, and you have to negotiate really hard to get approval. For a bike loan without a down payment, you must have a good credit score and an excellent payment track record for your ongoing loans. However, as advice, it is always advisable to make some kind of down payment for the bike loan, as it reduces the burden in the long run. It also helps to keep the EMI lower for the loan term.

Reasons Lenders don’t give bike loan without a downpayment.

Several lenders are also wary of approving loans without a downpayment. It gives lenders extra assurance, and they feel more secure about the borrower’s repayment capacity.

  • In case the borrower defaults on his bike loan, the loss for the lender is less, as the outstanding amount is lower.
  • If the borrower pays about 20% or more towards the downpayment, it means they are more invested in the bike and will make EMI payments on time.
  • The loan account can be closed with the sale proceeds in the case of a downpayment.

Some private lenders offer as much as 95% financing on two-wheelers, which means you just have to make a nominal down payment to avail the loan. You can always do thorough research about the lenders who offer this facility.

How to Choose a Bike Loan

A downpayment is an investment, which, as mentioned above, means a lower EMI. However, a down payment is not the only criteria that banks look at when approving a loan.

Here are the steps you need to follow:

  1. Research the lender – you don’t always have to choose a bank. There are NBFCs that offer loans with more flexible terms and conditions.
  2. Check out the interest rates. You have to remember that a bike that costs more may attract a higher interest rate.
  3. Choose a reputable lender that offers the loan at the lowest possible interest rate.
  4. Use the bike loan EMI calculator to check the repayment amount.
  5. Approach the lender – discuss options with and without a downpayment.
  6. Check your eligibility and collect the documents you need to submit.
  7. Apply for a loan.

If you get a lender who offers 100% financing for a bike, it will avoid the hassle of making a down payment, but you must carefully read his terms and conditions and ensure that you get the best deal in terms of interest rates and low-cost EMIs. Another thing you must remember for zero down payments is that your EMI will increase as the total amount taken on the loan increases. It is thus essential to judge your capacity for repayment while choosing bike finance.

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