Should You opt for Zero Down Payment Two-Wheeler Loan?

Zero down payment two-wheeler loan – how good an option is it?

Many a times we need to take a loan to get a two-wheeler for use. That is referred to as a two-wheeler loan, simply. Now, when you wish to pay nothing upfront and still get the loan, that is possible with the zero down payment option. That way, the loan provider will also take care of any remaining payments (5% - 15% that is paid as a down payment) and you will be left with nothing to pay for now, except the loan processing charged maybe.

Now, opting for this kind of option gives you benefit in the present, but will definitely cost you more in the long run. It is important to make an informed decision here.

Zero Down Payment Two-Wheeler Loan

When you are eligible as per a zero down payment two-wheeler loan lender (bank), you get to enjoy the respective benefits also. When this happens, the bank pays the entire amount of the bike or the scooter, while you are saved from shelling out any money.

Eligibility Criteria Required

The eligibility criteria can be differing for different banks, but the general criteria would be as follows:

• Your Income: The income is expected to be a minimum gross income of Rs.84,000 in a year when you are salaried. If you are self-employed, the amount can be Rs.72,000
• Your Creditworthiness: As with loans, banks and lenders usually prefer to check your credit score first. They want to know how creditworthy you are to determine the risk attached with the lending.
• Whether or not You're an Existing Customer: Being an already customer at the bank can benefit you through cheaper interest rate for the loan.
• Age: The age needs to be between 21 years and 65 years.
• Your Residential Status: The given residence should be in use for a year at least. Relevant documents need to be submitted if not.
• Your Working Status: Lastly, you should've been working for at least a year.

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Why One Prefers a Zero Down Payment Two-Wheeler Loan?

One may prefer this option for the following benefits:

• To preserve savings: When you are short of funds and have made savings that you do not want to disturb yet
• For Instant ownership: When you are seeking immediate ownership and can't wait for down payment
• For Accessibility: When you consider it an ideal option, such as in case of students, salaried people, etc.

What are the Benefits of Zero Down Payment Two-Wheeler Loan?

Here is how the option can be beneficial:

• First and foremost, you need not pay anything initially
• Get the bike for use
• Even own the bike as your own
• Quick approval when you meet the eligibility criteria
• There can be flexible EMI options too, though that depends on factors like your income
• You get time to arrange funds for the bike loan payment later on
• You are saved from making a huge payment in the very beginning

Hence, there can many advantages to be enjoyed.

What are the Drawbacks of Zero Down Payment Two-Wheeler Loan?

You also need to be aware of the shortfalls that come with the option:

• Your total repayment amount increases further
• Each EMI might be a higher one
• The financial burden is more in this case
• There is relief in the beginning, but it can be financially stressful later on
• The rates of interest charged are also higher, one other factor that enhances your repayment amount/EMI
• Extended EMIs may also come with longer tenures and thus extended obligation of repaying for the two-wheeler

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So, Should You Apply for Zero Down Payment Two-Wheeler Loan?

Know that there is some documentation requirement also that comes with this type of loan. One can apply for the same at banks. NBFCs, dealership financing as well as online loan aggregators.

However, the main question is whether you should go with the option or not.

• You need to decide carefully by assessing your financial situation and what you expect it to be in the near future.
• Take into consideration all the pros and cons.
• Go through all details of the agreement made.
• Also ensure that there are no other charges to be made by you.
• Check your eligibility.

Basically, it should fit your budget after you know all the terms and conditions.

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