Buying a bike or scooter on a two-wheeler loan has become quite common today. Many lenders offer easy financing options, allowing you to purchase your dream vehicle without paying the full amount upfront. However, the down payment you make at the beginning of the loan plays a crucial role in determining your financial burden.

Let’s understand the four key ways a down payment affects your two-wheeler finance.

1. Lower Loan Amount, Lower EMIs

When you apply for a two-wheeler loan, the lender finances a major portion of the bike’s cost. However, the amount you borrow depends on the down payment you make. A higher down payment means you borrow less, leading to smaller Equated Monthly Installments (EMIs).