Monday, February 6, 2023

Can I Buy A Bike Without A Down Payment?

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According to research, the Indian two-wheeler market is expected to reach 26.6 million units by 2025. With market players introducing new and more attractive two-wheeler models equipped with the latest technology and affordable prices, the two-wheeler market is expected to grow at a compounded annual growth rate of 18.6% during 2022-2027.

Purchasing a bike can be a massive upfront expense, and individuals are more inclined to apply for a loan to fund the purchase of their bikes. However, in most circumstances, if a person wants to buy a two-wheeler, they must make a down payment ranging from 5% to 20% upfront. The financing institution funds the balance amount. However, a down payment can also be inconvenient for the buyer and appear as a substantial cost.

Zero Down Payment Two-Wheeler Loan – An Overview

In a zero down payment two-wheeler loan, the financing institution covers the entire purchase cost of the bike without the buyer having to shell out any funds from their pockets. Applicants only have to pay up to 3% of the loan processing fee.

Like any other loan, applying for a zero down payment comes with the responsibility of repaying the loan promptly. Miscalculations of the principal amount or tenure can lead to troubles. Loan applicants must understand how much loan they can afford and select a repayment tenure that makes the EMIs manageable. A two wheeler loan EMI calculator is an effective tool that helps applicants understand the value of their future monthly instalments. Using the calculator, loan applicants can analyse if the EMIs are going out of budget or if they should narrow down/extend their tenure according to their requirements. 

Applicants applying for a zero down payment bike loan must meet the eligibility criteria and present the necessary documentation to qualify for the loan approval. Here is a deep dive into the essential things to remember while applying for a zero-down payment bike loan.

Eligibility Criteria

The eligibility criteria to qualify for a two-wheeler loan without a down payment is given below

  • Status of Residence – Indian residents can avail the loan.
  • Age – Loan applicants must be at least 18 years old at the time of application and 65 years old at the end of the loan period.
  • Nature of Employment – Salaried/self-employed individuals.
  • Minimum income requirements – Salaried applicants must attain an annual income of Rs. 96,000, and self-employed individuals must generate a minimum profit of Rs. 1,20,000 to qualify for the loan.
  • Credit Score – Applicants with a good credit score show a greater potential to qualify for the loan. A higher credit score is likelier to receive more attractive offers. Here are some key things to remember about credit score while applying for any loan: (i) A credit score within the range of 300 to 599 is considered poor, (ii) A fair credit score ranges between 600 and 749, (iii) A good credit score lies between 750 and 900.

Documentation

Applicants must prepare the following documents before commencing the application process.

  • Identity Proof – Voter ID, Adhaar Card, PAN Card, passport and driver’s licence qualify as valid ID proofs.
  • Address Proof– Applicants can submit the following documents for address proof: passport, Adhaar Card, Voter ID, LIC Insurance, Ration Card, Utility Bills, and Driver’s Licence.
  • Proof of Income – Income tax returns/salary credit in the bank account or payslip suffice as proof of income.
  • Proof of Ownership – Applicants can show recent land/building/house tax receipts.

Conclusion

Applying for a two-wheeler loan is the most ideal way to fund the purchase of a new bike. The best bike loan comprises an affordable loan amount, low-interest rates and an appropriate repayment schedule per the borrower’s requirements. Applicants no longer have to worry about an upfront cost while applying for two-wheeler financing. A zero down payment bike loan comes with no initial upfront cost, and the financing institution lends the borrower 100% of the two-wheeler’s cost.

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