A motorcycle purchase can be a thrilling experience, however, it’s also a major financial investment. It’s a good idea to be patient when looking at all the financing options, so that you make an informed decision.
If you’re not buying the bike in cash, you’ll have many other options to obtain the money you require. So, whether you’re using the new bike as your primary means of transportation, or you’re taking it for a few rides on the weekends and rides, you can relax knowing you’ve found the best deal that is good for your pocket.
Motorcycle Financing
It is not recommended to use an auto loan to finance the purchase of a motorbike, however you have a few alternatives. Here are four of the most commonly used methods to purchase a motorcycle:
- Motorcycle loans – Motorcycle loans are loans offered by a number of banks, credit unions and online lenders that specialize in financing the purchase of motorcycles.
- Personal loans – Personal loans are loans that are not secured which can be used to make any purchase that is major. Many people use them to reduce debt, while some use for home improvement however, they could also be used for the purchase of the latest motorcycle.
- Dealership financing – Sometimes dealerships may have their own lending parners or you may even be able to get a motorcycle loan directly through the dealership itself.
- Manufacturer financing – Similar to financing at a dealership, manufacturers also partner with financial institutions to offer motorcycle financing.
Personal Loans
The majority of personal loans that are unsecured offer motorbike financing, even though they aren’t specifically advertised as a motorbike loan. A lot of lenders take this type of loan to be is a “major purchase.” You could use the loan money in the same manner as things like a wedding or a trip.
One of the advantages of taking out an unsecure personal loan to purchase your motorcycle is that you usually receive your money directly to your account at the bank. This helps negotiate with the seller as you’re basically the cash buyer. Additionally, it gives you a wider range of options to purchase a secondhand motorcycle.
You can also apply the funds to finance equipment as well. Be sure to estimate the amount you plan to spend on accessories so that you can include them in your loan amount.
Dealership Financing
Both manufacturers and dealerships generally offer financing for the motorbikes they sell. Make sure you compare options prior to signing the contract to make sure it’s one of the best loans that you can qualify for.
There are some considerations to think about when considering the manufacturer or dealer financing. This is what you should think about to consider for each.
Dealerships generally partner with the manufacturer or with another lender outside to fund your bike purchase. While they may not have the same requirements that other banks, the rates of interest are usually more expensive. Additionally, you’re adding on an intermediary, which usually will increase the amount you be paying over time since another person will be getting some of the profits from your deal.
But, they often have promotions that can work for your benefit. It is advisable to look around and don’t make a decision too quickly, to ensure you’ll be able to find a decent deal.
Manufacturer Financing
Manufacturers usually partner with a particular bank or credit union to assist customers in financing their bikes. They can offer rates that are competitive, however you’ll see that the lowest rates for loans are reserved for higher-end motorcycles, and for smaller term repayments.
That’s why it’s crucial to think ahead and evaluate the loan options available to ensure you’re getting the most favorable rates and terms for the bike that you are looking for.
Here’s a list for motorcycle manufacturers that provide in-house financing:
- Harley-Davidson partners with Eaglemark Savings Bank.
- Kawasaki partners with Citi Retail Services, Synchrony Bank, and Sheffield Financial.
- Ducati uses Ducati Financial Services.
- Triumph partners with FreedomRoad Financial.
- Yamaha partners with WebBank.
- Honda uses Honda Financial Services.
- BMW uses BMW Financial Services.
- Suzuki partners with Sheffield Financial.
- Indian partners with Evergreen Bank Group.
- Aprilia partners with Sheffield Financial.
- KTM partners with FreedomRoad Financial and Synchrony Financial.
How Do Motorcycle Loans Work?
The loans for motorcycles allow you finance the purchase of a new motorcycle when you don’t have money available. As with any loan, the rates of interest and the terms of loans for motorcycles vary widely, and depend of the loan provider, amount of the loan as well as your credit score, and many other factors.
The availability of secured motorcycle loans is popular, however it is also possible to get non-secured loans for motorcycles.
What’s the Difference Between Secure and Unsecure Motorcycle Loans?
Secured motorcycle loans require the car itself to be registered as collateral. That means in the event that you do not meet the payments, and are not able to satisfy any of the refinancing options offered by the lender then the lender takes possession of the vehicle.
The secured loan for motorcycles can usually have lower interest rates because the lender takes lower risk due to the collateral being used to secure the loan.
Unsecured motorcycle loans do not require security to qualify, which means that should you not pay your loan on time, you won’t lose your motorcycle. But, interest rates are higher for loans that are not secured as well as you’ll need to have a credit score of 550 to secure a loan at favorable rates and conditions.
The availability of secured loans is wide and you can visit a lender online to get prequalified and learn more about the rate and terms that are offered to you in relation to your credit score.
Motorcycle Loans Vs. Auto Loans:What’s the Difference?
Many lenders don’t consider the motorbike as a kind of vehicle to be an auto loan that is traditional. So, you might need to consider other than traditional auto lenders in order to get an auto loan.
Since they are usually considered to be recreational vehicles, you might find them eligible for recreational loans, the same as you would get for a boat or an RV.
Expect to see motorcycle loan rates a bit more expensive than car loans irrespective of the kind of financing you select. The lender you choose the loan’s term could be different.
The maximum loan for motorcycles is usually approximately 72-months (6 years) and many auto lenders will let you finance your car for as long as the amount of 84 month (7 7). The specifics are, naturally, dependent on the lender you choose and the bike you choose to purchase.
Certain lenders allow additional items to be added to the loan, while other lenders don’t. If you’re looking to purchase to purchase any of these items determine the way you’ll cover them prior to the time. This is something you’ll want to take into consideration when deciding on a financing plan to ensure you’re able to afford everything you require and be on the road immediately.
What are Motorcycle Loan Rates?
The rates advertised for motorcycle loans are not the same, but the current rates typically range between 5 and 36% for loans that are not secured that are made through online lender. Secured loan rates are likely to be lower than rates offered for loans that are not secured however your credit union or bank might permit you to avail of lower rates.
The best loan option for you is a matter of comparing options Make sure to examine the various motorcycle loans offered by different lenders.
How Long are Motorcycle Loan Terms?
The majority of motorcycle loans come with repayment terms of 2 to 6 years in total. In most circumstances, the terms are available in 36, 48 and 60 months. While it is tempting to spread your monthly payments in order to reduce them, bear in mind that interest charges are more expensive the longer your term is.
FAQs
What credit score is needed to buy a motorcycle?
The loan application process will be evaluated based on a variety of factors, including factors like your score on credit, your credit history, and income. Credit scores are crucial if you’re seeking an unsecure loan, therefore it’s a good option to boost your credit score prior to applying.
In order to be eligible for a loan that has competitive interest rates, you’ll probably require good to excellent credit. Credit score ranges vary among the three major credit bureaus. However, good credit generally is between 670 and 850. However, the lowest advertised interest rates as well as the most favorable loan terms are only available to those with high to very good credit.
- 800-850: Excellent credit
- 740-799: Very good credit
- 670-739: Good credit
- 580-669: Fair credit
- 300-579: Poor credit
If you aren’t able to meet the required credit score to qualify required for loans that are competitive however, the good thing is that there may still be alternatives for you. Certain lenders, particularly those on the internet, are experienced with lending to those who have bad credit.
The truth is that people with poor credit scores be forced to pay higher rates and less options in terms of loans and lenders.
Can I get a motorcycle loan with bad credit?
Although your credit scores needed for the loan can differ between the lenders of motorcycle loans however, you can obtain one even if you have bad credit. There are lenders that provide poor credit loans, however keep in mind that having a low credit score can mean that the options are all with a high rate for personal loans.
It’s a good idea to obtain a report of your credit score from any than the 3 major credit bureaus. This will allow you to know your credit score and move closer to getting the required credit score for any loan.
Where can I get a motorcycle loan?
The possibility of getting a motorcycle loan is available through certain banks, manufacturers of motorcycles and credit unions, as being online lenders. Spending time and searching around to investigate your options could aid you in locating the best rates on motorcycle loans that are that are available to you
Do banks give loans for motorcycles?
It is indeed possible to obtain a motorcycle loans from a bank. Certain banks offer motorcycle loan products and rates for personal loans which can be used to fund the purchase of a motorcycle.
You can contact your bank and obtain credit approval for rates that are competitive quick, based the credit scores of your clients.
Bottom Line
Finding the most suitable motorcycle loan does not have to be a hassle. There are numerous options to find the best type of motorbike financing you require.
Before you head to the dealer, you should research some alternatives, so you are armed with as much knowledge as you can. Once you’ve found the best motorcycle financing rates and you’ll be able to take off on your new bike and ride with absolute peace of mind.
