You may be planning to buy a bike but facing a financial problem. Paying the whole amount upfront would be difficult for you, so you have decided to apply for a bike loan. Usually, you have to make a certain amount of down payment and borrow the rest from a lender. In case, paying the down payment is also not possible for you, you can get a loan equal to the entire amount, i.e, the price of the bike. This is known as zero down payment loan and certain lenders offer this. Read on to important facts about bike loan without down payment and how you can avail it.
A zero-down payment on bike loan may involve certain processing fees and other charges but the lender would offer the total price of the bike as loan. You can apply for bike loan online, as the process is comparatively easier than offline method.
The benefits of a zero down payment bike loan or 100% financing loan includes:
You do not have to arrange funds for purchasing a bike. If you want to save your earnings at certain point of time, the zero down payment option would be great for you.
No effect on liquidity
Your liquidity will not get affected. Since you have to make the down-payments from your savings, a 100% financing bike loan would not drain your savings.
No risk of losing the down payment
You do not face any risk of losing the down-payment if you fail to pay the EMIs (equated monthly instalments) during repayment. If you apply for a loan with down-payment, there is a risk that you will lose the down-payment if the lender claims ownership of the bike if you fail to repay.
For a zero down payment loan, your loss will only be the instalments that you have paid, and no other lumpsum amount when you applied for the loan.
The eligibility for bike loan without down payment generally includes the following and may vary between lenders:
- You have to be at least 21 years of age to apply for this loan.
- You have to repay back within a certain maximum time duration. It is usually before your retirement if you are a salaried individual.
- You can avail the loan if you are salaried or self-employed. However, it would be easier for you to get the loan if you are salaried as you have a fixed cash-generating capability.
- You cannot get the loan if you have recently started working. The minimum requirement for a job duration may be one year or more.
- If you are self-employed, you have to stay in the same business for at least two years or more. If there are breaks in the business, then the lender may deny your application.
- You have to stay at the current address for at least a year. If you have just moved in from another location and applied for the loan, chances are that it would get rejected.
- You have to disclose details related to all your previous and existing loans. The lender uses these details to find out your credit worthiness.
- If there were any cheque bounces from your account within the last one year, your application can get rejected.
For a bike loan without down payment or a 100% financed bike loan, you do not have to make any upfront payment. This is convenient as you can purchase a bike if you require it urgently but do not have the required fund at that moment. The procedure is also easy as you just have to meet the eligibility criteria. There is no risk of loss of any lumpsum amount in this type of loan.