What You Must Know About Bike Financing as 0 Interest Two Wheeler Loan

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Bike purchase comes off easy if it is backed by a suitable financing option, not only easing your funding woes but also allowing the purchase of suitable bike model. Several different types of bike loans are available today to suit individual borrowing requirements for two-wheeler purchase. Lending institutions provide these advances with attractive features like affordable interest rates and flexible repayment tenures. Individuals also seek out 0 interest two wheeler loan for easy funding, which might, however, be a myth as lenders are sure to levy interest at a minimum rate on these loans.

In place of it, you can, nevertheless, look out for alternative funding options for bike purchase like zero down payment bike loans. These advances are evolved forms of bike financing that allow you to raise 100% funding of the bike’s cost without any LTV deduction. Let’s check out in detail about how these bike loans work.

How Does a Zero Down Payment Bike Loan Work?

To understand the working of a zero down payment bike loan, you must first know how a tradition two wheeler loan works. So, when borrowing funding for bike purchase, the lender will provide an LTV of between 70 and 95% of the bike’s current market value as financing. The remaining amount would be met by the borrower in the form of down payment made to the seller.

So, in case the bike’s cost is Rs.50,000 and the lender provides financing only up to 90%, you will receive a loan of up to Rs.45,000 only. You would need to meet the remaining amount of Rs.5,000 as down payment from your pocket.

Contrarily, in a zero-down payment bike loan, the need for such upfront payment is eliminated altogether. The lender thus provides a 100% LTV, financing complete price of the bike as a two-wheeler loan. You can find such bike financing in most cities of India as zero down payment two wheeler loan in Chennai,, Kolkata, Ahmedabad, and many more.

The borrower needs to repay the advance through standard EMIs payable as per schedule throughout the loan tenure. As the financing value under this loan arrangement is high, the financial institution undertakes a greater risk of lending. These loans may thus attract a tad higher rate of interest, which is of course negotiable if you hold a borrowing profile with a high creditworthiness.

To hedge for the higher risk undertaken, the lending institution also lays down stricter eligibility requirements for the borrower to meet. 

Eligibility Requirements for 100% Bike Finance

While the eligibility factors for the advance remain the same, the borrower needs to meet a higher threshold under the following aspects to avail funding.

• Income
• Age
• Occupation
• Work experience and stability

The minimum requirements under these factors may vary from one lending institution to another. It is thus wise that you check with your lending institutions the specific eligibility requirements that you need to meet to avail funding.

Importance of Credit Score in 100% Bike Finance

As mentioned earlier, the lender undertakes a higher degree of risk when providing 100% bike financing to the borrower. To make for such risk undertaken, it reflects on the eligibility requirements. So, even though as secured loan options bike loans may not carry a mandatory credit score requirement, you would be needed to hold a minimum credit score of 700 to avail 100% bike finance.

Credit score is a decent indicator of your past credit history and financial discipline followed, thus allowing lenders a peek into your credit habits. It thus helps determine the overall risk associated with a borrower and allows the lender to determine terms of the loan accordingly.

While availing 0 interest two wheeler loan might not be possible, you can always negotiate for lower rates on interest on your 100% bike finance with a few things in place. Choose a loan amount lower than your maximum availability, opt for a shorter tenure for repayment, and provide all income documents when applying for the advance for a leverage to interest rate negotiation.