5 Hacks To Quick Car Loans With Zero Down Payment

Introduction

You need to buy a car and you don’t have any cash right now out of your savings to spare for your purchase. What do you do? Postpone buying your car and pay at higher interest rates in the future or avail yourself a 100% loan on your on-road price of the car, a car loans with zero down payment? The better option depends on your urgency in buying a car. Although paying a down payment is beneficial for getting a loan at lower interest rates, it is not always a mandatory option.

But this could mean that you will have to pay a bit higher interest rates than you could have gotten with a 20% down payment. However, even if you push your car to another year when you have saved some amount for your down payment, there is no guarantee that you are getting a better deal in the future than the one you will be getting now.

What Is A Down Payment On An Auto Loan?

Down payments are the percentages paid upfront on the vehicle at the time of the purchase. It determines the loan amount you will be sanctioned for the rest of your car expenses. Car loans with zero down payment are not hard to find, however the components and risks should be acknowledged.

For example, if the car you are buying costs around 10 lakhs, a down payment of 2 lakhs is a 20% down payment on the car. And if you have a car you can trade in when you are buying a new one from a dealership, you can add the trade-in value to the down payment of your car without taking any additional money from your bank account. The larger the down payment the more benefits. However if you don’t have the cash to make a down payment, sit tight and keep reading!

Car Loans With Zero Down Payment

An auto loan where the buyer is not required to pay any amount from his bank account but takes the whole expense in a loan is known as the zero payment car loan or zero down auto loan. Hence an alternate term “100% finance”.

So, what do you need to know about a car loans with zero down payment?

First and foremost, it is highly beneficial only if you have a good credit history and CIBIL score that you apply for the car loans with zero down payment. Moreover, ask the bank or the lender about the processing fee while availing of the zero down payment auto loan. Make sure your banker is looped in with the price of the car, and remember that the more the cost, the less the chances of your approval. Therefore, make a reasonable bargain on the car and your budget before shopping around.

5 Ways To Get An Instant Approval On Car Loans With Zero Down Payment

Many banks offer this option. By submitting requirements documents online, you can receive an e-approval while the bank processes the loan application. However, the value of the car should be preferably less than your net annual income so that you are not stressed out to pay more than you are capable of at the end of every month.

Whether you choose HDFC, ICICI, or Axis for your zero-payment auto loan, here are some things you should do before you talk with a prospective lender:

Boost your CIBIL score

If your credit score is 700 or above with no negative loan repayment history, your lender may keep trust in your clean record to waive your down payment without raising interest rates or EMIs. Even if you have a score above 600 and below 700, you are still lucky to escape a down payment, but not so much when it comes to interest rates and EMIs.

However, a score below 550 is considered poor and the lender may not have the same trust in you as he would with a cleaner record. Sometimes, a guarantor might help you out in such situations by bringing back the trust in your capabilities but that differs from lender to lender and you will need to negotiate with your bank or lender on their terms and make a bargain.

Therefore, it is highly beneficial for you in the long run if you have a good or excellent credit score. Clearing your bills, debts, and balances would help you to boost your credit score and stay financially safe down the road.

Cut down costs on add-ons

This is another factor that car loans with zero down payment might be rejected. Adding more features on top of your car that you may not even benefit from is another reason why lenders may not be approachable towards sanctioning 100% financing.

When you are planning to cut down your down payments to zero, a lower loan on your car will be easier and more beneficial to repay the amount in a shorter tenure.

Trade-in value

As mentioned earlier, if you have a car you can bring in for a trade-in with your new car, you can altogether jump a break on your down payments by adjusting the amount from the trade-in to the down payment required. This is the best option to consider if you have the opportunity.

Not only are you benefiting from your previous car before it depreciates even further but you are even saving a lot of money on your new car with this method.

Consider a cosigner

Low credit score, questionable credit history, and unpaid debts. Still, if you want a 100% loan on your car, consider your luck by bringing in a cosigner who can vouch for your credibility. However, let the cosigner know what they are getting into. A family member, friend, or a well-wisher, would be responsible for the loan if you are unable to pay it, therefore you should have a mutual trust with the cosigner before you take them with you to a lender.

If not anything, you have one final option left.

Save for a down payment

Yes, if nothing is working out for the better, saving for a down payment and then going for the car of your dreams is a good deal. Chart out a plan, budget your car, calculate the down payment percentage, talk to your lender, and get the best deal on your car.
Doing this takes time, but it will not restrict you to smaller budgets, you will be able to get a higher loan if you are paying a down payment and even reduce your LTV ratio and thus the risk of the lender.

The Bottom Line

Getting car loans with zero down payment is easy but several key factors make the lender able to trust you and your repayment capabilities. Factors such as credit score, credit history, employment stability, cosigner, and repayment capabilities take on a larger role in the bigger play.

Planning is the most important part of your purchase, your capability and your lender flexibility are what is most important in a healthy financial future. Therefore, before shopping around your options let us do your research for you. Get you the best deal on your requirement and save you some burden on your economical health.

If you are still unsure how, give us a call at Blue Carz and schedule a free consultation with our representative to find the best car loans with zero down payment. The dedicated relationship manager will also take you through the process of buying a car at the best rates possible, even with a poor credit score. Get discounts on your loan with our leading partners, HDFC, SBI, Kotak, Axis, ICICI, and more! Grab your benefits today.