Motorcycle Loans And Financing

Motorcycle financing is similar to car financing for loans or large purchases. Before you sign on the dotted line for a loan for your new or used motorcycle, you’ll want to consider the factors listed below.

Types of Motorcycle Financing
The primary types of financing for motorcycles include:

Dealer Financing: Oftentimes, you can get a loan directly from the dealership. These motorcycle loans are typically backed by the manufacturer or a bank.

Personal Loans: You can use a personal loan from a bank, credit union, or online lender to finance your motorcycle.

Credit Cards: You could use a credit card for your motorcycle purchase (assuming you have a high credit limit on your card), but this type of borrowing often has higher interest rates than other financing options.

Interest Rates On Motorcycle Loans
The interest rate on your motorcycle loan will depend on a number of factors, including: current interest rates, your credit score, your loan amount, the length of your loan, and your lender. It’s crucial to shop around and compare interest rates. Sometimes, motorcycle companies will offer promotional rates, which can help lower your interest rate.

Term Length Of Your Motorcycle Loan
Motorcycle loans typically range from 12 months to 84 months. A longer-term loan can mean lower monthly payments, but it also typically means that you’ll pay more in interest over the life of the loan.

Down Payment On Your Motorcycle Loan
Most lenders require a down payment for a motorcycle loan. Typically, this is a percentage of the motorcycle’s purchase price, that you’ll need to pay upfront. A larger down payment can reduce the loan amount (and monthly payments) and potentially help you get a better interest rate.

Fees and Extras On Motorcycle Loans
When you’re shopping for motorcycle financing, be sure to ask about any additional fees, such as loan origination fees or early repayment penalties.

Credit Score Requirements For Motorcycle Loans
Your credit score plays a huge role in the type of financing you can get and the interest rate that you’ll be offered. In general, the higher your credit score, the lower your interest rate. And with a higher score, you’ll have an easier time getting approved for a motorcycle loan. There are “bad credit” motorcycle loans, but try to avoid taking on a loan with an exorbitant interest rate.

Pre-approval For Motorcycle Loans
You might want to get pre-approved for a loan before shopping for a motorcycle. This will give you an idea of how much you can afford, and it can also streamline the purchasing process.

Used Motorcycle Loans
A motorcycle loan for a used bike might come with a slightly higher interest rate compared to a new one, because used motorcycles are considered riskier assets for lenders.

Insurance Requirements For Motorcycle Loans
If you finance your motorcycle, the lender will typically require you to have comprehensive and collision insurance, in order to protect their collateral in case of an accident or theft.

Default On A Motorcycle Loan
If you fail to make the required payments, your lender could repossess your motorcycle. This can have a devastating impact on your life, your financial health, and your credit score. Before you borrow money for a motorcycle, be sure that you understand the terms of the loan, that you can afford the monthly payments and that you could sell the bike if you had to!

See related topics:
Motorcycle Insurance
Motorcycle Insurance Companies