How many times have you hung on to an advertisement showcasing the latest two-wheeler model which literally seems like a realistic version of your dream bike? If you are truly attracted to a specific vehicle to the point of purchasing it anyhow, a zero down payment bike loan is exactly up your alley. Regardless of whether or not you have adequate savings, availing of a two wheeler loan can prove to be the most suitable financial solution provided you can work out certain aspects. 

Because this financial product does not require you to make any upfront payment, it minimizes the monetary strain associated with such a purchase. However, it is governed by some factors, which play a crucial role in its approval and disbursement. Since understanding these benchmarks is imperative, you must ask yourself the following questions – 

Am I creditworthy? It is your credit score that reflects your creditworthiness, wherein the higher the score, the better is your creditworthiness and vice versa. Get in touch with CIBIL to find out your credit score, and having done so, assess your position. A good score would not just render you eligible for the zero down payment bike loan, but also put you in the lender’s good books. Hence, you would be better poised to seek a lower bike finance interest rate, or negotiate on the loan amount. 

How should I tackle the interest rate? Treat the bike loan interest rate as you would a surgeon’s opinion because this factor has a direct bearing on the monthly installment. Ideally you must seek interest rates on two-wheeler loans from at least 5-6 lenders so as to be able to conduct a comparison. On their part, lenders assign an interest rate after gauging a horde of factors and your capacity to repay the loan. 

Check with your existing lenders if they provide lower interest rates under the loyalty scheme. You can also make inquiries regarding pre-approved loan offers which come with low-interest rates, or wait for the festive season when most brands offer discounts. 

What about the additional charges? In the absence of any standard regulation, this aspect varies from one lender to another. Therefore, as far as this aspect is concerned, the onus of making inquiries depends solely on your initiative. Points you must inquire about pertain to the following – 

  • Whether or not the lender would levy a processing fee for the loan application;
  • If there would be any foreclosure charges in case you wish to pay the remaining amount in one stroke;
  • Penalty that the lenders would levy in the unlikely event that you miss an EMI;

Seeking clarification on these points would render you aware of the fine print associated with the bike loan, which otherwise you might have missed. 

Is there a limit on the amount that I can borrow? Since it is a zero down payment bike loan, the amount you borrow would cover the entire cost of the two wheeler. The only word of caution in this context pertains to ensuring that you do not over-borrow and increase your financial liabilities. Therefore, tempting though it might be to seek an amount which is more than the purchase value, you must stick to the cost, bearing the repayment terms in mind. 

Also, plan out your repayment schedule beforehand so as to enjoy the benefits of the loan and not regret it later. 

Which documents will be required? The most reliable source for checking eligibility and documentation is the lender in question. To this effect, you can either visit the lender’s facility in person and hold a personal discussion regarding the eligibility criteria and requisite documents, or check their online website. 

Nowadays all financial institutions maintain a prominent presence and provide detailed information on their portals. So, on accessing the website, check the relevant sections and subheadings to glean information and clear your doubts. 

Can I choose the type and tenure of the loan? Although two-wheeler loans come under the unsecured category, sometimes lenders might ask you to pledge a collateral if you insist on a really low interest rate. A poor credit score and defaults in previous loan repayments might also cause lenders to seek a collateral in lieu of the loan. 

Tenure for repaying the two-wheeler loan ranges between one and four years, and you can select the duration as per convenience. 

Final thoughts

Educating yourself on these aspects prior to applying for a zero down payment bike loan is akin to being safe rather than being sorry. At the end of the day you will have purchased a two-wheeler without disturbing your savings and at terms that remain financially favourable in the long run. Courtesy of a suitable bike finance interest rate, your monthly instalments would remain well within the budget, thus eliminating the need for any further financial adjustment.

Having accrued the benefits of the two-wheeler loan, you would be well-placed to travel comfortably through the peak-hour traffic and save on time and resources. In addition you will have gained protection against contagions by avoiding the public transport.