While many factors determine whether or not you qualify for a motorcycle loan, including your credit history and personal assets, there are also plenty of options when it comes to the type of financing you can get. You can find loans from large banks, small community banks, online lenders and credit unions, with some offering same-day approvals and competitive interest rates.
One of the first things you should do is shop around. While some dealers offer in-house financing, which may be convenient, they often have higher interest rates than you can find elsewhere.
The term of your loan is another factor that can impact the cost of financing a motorcycle. Typically, you can find loans with repayment periods between three and five years, with longer terms resulting in lower monthly payments but more expense over the life of the loan.
Whether you want an unsecured or secured motorcycle loan rates can also have an effect on the amount of money you’ll have to pay back. Secured loans are tied to an asset like a vehicle or property, which the lender can repossess if you default. Unsecured loans, on the other hand, are based solely on the lender’s estimation of your creditworthiness and do not require that you register any assets in your name.
You should also consider the type of bike you’re buying, as some manufacturers offer in-house financing at low rates on select models. Generally, these loans are only available through the dealer where you’re buying your motorcycle from and have certain limitations, such as not financing bullet bikes or dirt bikes.
As you browse, check with your local bank or credit union because they may have special motorcycle loan deals or offer loyalty perks for customers who choose to finance through them. It’s also a good idea to check your own credit before you apply for any new loans, as it can help you catch errors or fix issues that could prevent you from qualifying. Some lenders, such as LendingTree and Southeast Financial, let you pre-qualify for loans without affecting your credit score.
Some banks and credit unions have specific motorcycle loans designed for borrowers who have excellent credit. Others, such as Regions, lump motorcycle loans with RV financing and have more general lending requirements, such as a high credit score and debt-to-income ratio. Credit unions have more flexibility when it comes to lending, though, and some, such as NASA Federal Credit Union and Digital Federal Credit Union, have special programs that include motorcycle loans with lower APRs than their standard personal lending rates. You’ll have to be a member of the credit union to qualify for these deals, but it’s worth checking out the rates offered before you buy your next ride.