Owing to their high prices, most individuals prefer purchasing motorcycles with loans. This allows them to pay for their two-wheeler gradually without bearing much financial burden. The only major payment individuals need to make when taking a motorcycle loan is its down payment. However, there is a type of loan through which one can get a motorcycle without making a down payment. Such loans are known as 100% financed loans or zero down payment loans.

What are zero down payment loans?
Usually, when one applies for a loan to purchase assets such as a bike or a car, one is required to make a down payment.

In the case of a motorcycle, this down payment can be a certain percentage of the vehicle’s total amount. The individual can then get a loan for the remaining amount, which they must repay over the opted tenure. In the case of zero down payment loans for a motorcycle, an individual is not required to make this down payment. Instead, they can get a loan for the full amount of the bike. This takes away a lot of the financial burden of making an upfront payment. The only upfront payment that the individual will have to make in this case is the loan processing fee, which is usually up to 3% of the loan amount.

Eligibility criteria for a motorcycle loan without a down payment
While a motorcycle loan without a down payment does seem like a convenient option, it does have eligibility requirements that individuals need to meet to obtain it. These requirements include the following:

Citizenship and age
Firstly, the individual needs to be a citizen of the country and has to be over the age of 18. Some lenders may even require the applicant to be at least 21 years of age. Along with that, the loan also has a maximum age limit. To be eligible for a zero down payment for a motorcycle, an individual must be under 65 years of age. However, some lenders also have a slight change in this requirement, where they require the individual to be under 70 years of age by the end of the loan tenure.

Employment
One of the great features of this loan is that both salaried and self-employed individuals can apply for it. But there are certain requirements that need to be met. Salaried individuals must have work experience of at least one year, while self-employed individuals need to have been in their current business for at least one year. Some lenders even take this up a notch, as they require salaried individuals to have been employed with their current employer for at least six months. Similarly, some lenders require self-employed individuals to have been in their current business for at least two years.

Income
The applicant’s income requirement also slightly differs between lenders. Usually, lenders require salaried individuals to have an annual income of at least 84,000 INR and self-employed individuals to have an annual income of at least 72,000 INR. Again, this figure may change depending on the lender.

Credit score
To be eligible for a zero down payment motorcycle loan, an individual needs to have a good CIBIL score. CIBIL score is a credit rating system that  ranges from 300 to 900, where a score of  750 or above is considered the best-case scenario. If an individual’s credit or CIBIL score is between 700 and 750, it is still considered good. It is important to note that most lenders will only offer a motorcycle loan to an individual with a good credit score. A good credit score also means the individual will be offered a low-interest rate on their loan. This is because it reflects that the individual does not fail to repay their debt on time. If an individual has a bad credit score, they may not be able to get a zero down payment loan.

How to get motorcycle financing with a low credit score?
Individuals with a credit score below 600 may not be able to get a motorcycle on credit without a down payment. It becomes especially difficult for individuals with a score of around 550 or less. In such cases, one can obtain a motorcycle loan in the following ways:

Get a co-signer
One way individuals with a bad CIBIL score can get a motorcycle loan is by getting a co-signer. If they get a co-signer who has a good credit score, the lenders will consider the co-signer’s credit score and history and offer a loan based on it.

Negotiate with the lender
An individual can also try to negotiate with the lender to offer them a loan at a considerable rate. It can also help to check with several lenders nearby and negotiate with them. One can then compare the rates and terms offered by the different lenders and apply for a loan with whoever offers the most favorable terms and interest rate.