3 Things to Know About Down Payment of Bike Loan
No other vehicle can match the style and thrill of riding a bike. It is not only stylish and fast but also compact, which allows you to make your way through heavy traffic conditions smoothly. Whether you are a college-going youngster, an adventure-lover, or a working professional, you may get access to your dream bike by taking financial help from a bike loan.
You will find hundreds of lenders offering bike loans out there. They finance a significant percentage of your bike’s price and the remaining amount you have to pay as a down payment. However, you will also find many lenders offering bike loans without any down payment. When you apply for a zero down payment bike loan, you get your bike without paying a single rupee from your pocket.
The lender funds 100% of the bike’s price as a loan, which you can repay in easy EMIs over your loan term. Sound too good to be true? They truly exist. However, before applying for a bike loan, know these three essential things about bike loan down payment.
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What is a Bike Loan Down Payment?
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Down payment is the initial contribution you pay from your pocket towards your bike purchase. Most lenders offer a significant percentage of the bike’s price as a loan, and the borrower pays the remaining amount as a down payment.
For instance, if you buy a bike worth ₹ 1,00,000, you pay ₹ 10,000-20,000 as a down payment, you will borrow the remaining ₹ 80,000-90,000 from the lender. However, many lenders offer zero down payment (100% financing) bike loans to eligible applicants these days. In such loans, the lender pays the entire bike’s price without you making any down payment. Use a bike loan EMI calculator to calculate your EMIs and choose a suitable repayment tenure.
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Factors Affecting Bike Loan Down Payment
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Bikes are the most common transportation mode in India. When you approach a lender to avail of a bike loan, the down payment you make depends on the following crucial factors:
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- The bike’s cost
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- The bike’s make and model
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- The applicant’s repayment capacity
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- The applicant’s credit history
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- Previous relationship with the lender
Although most lenders calculate the amount based on the bike’s price, your loan eligibility depends on your repayment ability and your credit history. When availing, you may need to pay 10-20% of the bike’s worth as a down payment. Asking for a down payment is the lender’s way of minimising lending risk. Besides that, making a bigger down payment minimises your debt burden and makes repayments more manageable.
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Pros and Cons of Zero Down Payment Two Loan
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Although zero down payment loans sound too good for a bike buyer, you must know the pros and cons of this kind of arrangement:
Pros of Zero Down Payment Bike Loan:
You don’t need to save any money to buy a bike. The lender finances the entire vehicle’s cost, which may repay in easy EMIs using a bike loan EMI calculator.
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- Your cash flow remains unaffected.
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- Loan processing needs minimal documentation.
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- You may borrow a loan amount according to your needs.
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- You get flexible repayment terms to pay off your loan.
Cons of Zero Down Payment Bike Loan:
Borrowing the entire bike’s price as a loan means a higher loan amount, which leads to increased interest outgo. The less you borrow, the less interest cost you have to pay. You will need to adjust the EMIs in larger EMI amounts or longer repayment tenure, both of which increase your loan cost in the long run.
How To Apply for a Bike Loan?
To apply for a bike loan, get in touch with the lender’s customer representative to check your eligibility for a zero-down payment bike loan. Visit the lender’s website or download their loan app to fill up the application form, enter the required details, and scan and upload the required documents. These often include your identity, income, and residence proofs. Use a bike loan EMI calculator to select a repayment term suitable to your repayment capacity. Once submitted, you will get your loan approval or rejection within seconds and get your loan disbursal within 24 hours.
With such easy availability of bike loans, you may buy your dream bike and repay its price in manageable EMIs. Use the information given above to borrow a bike loan and make a suitable down payment based on the bike’s price and available savings.
Also Read: What is the Interest Rate on Home Loans?
