Motorcycle Loan Interest Rates

One of the first things you may notice about loans for motorcycles is that the interest rate is higher than for a new or used car loan. The reasoning behind this is simple: most motorcyclists have cars that they drive as their primary means of transportation, while the motorcycle is an additional way to get around town. Although there are people who only have motorcycles as their primary means of transportation, lenders generally view motorcycles as fun extra vehicles. For this reason, lenders attribute more financial risk to motorcycle loans. After all, if a motorcyclist is having trouble paying bills, which loan will he or she pay on first: the primary family car or the motorcycle? In the vast majority of cases, the borrower will allow a motorcycle loan to go into default long before missing a payment on the family car. Consequently, folks who seek motorcycle financing will undoubtedly notice the higher interest rates offered for the loans. Don't let this stop you from shopping around and trying to find the very best interest rate possible.

Your First Motorcycle

When you decide the time has come to finally fulfill your dream and finance a motorcycle, you need to realize that there is much more to purchasing a motorcycle than the purchase price. You must purchase safety equipment such as a helmet and protective gear. You will need insurance for the motorcycle just like you would for any other vehicle. You may be able to get a discount on your insurance if you take a motorcycle safety course, but these courses cost money too. You will also have to pay for any registration, taxes, and titling fees for your new motorcycle. In most cases, these additional costs cannot be rolled into your motorcycle loan, so you should have the money available to pay for these expenses out of your own pocket. You will want to consider all the additional costs associated with buying your motorcycle to make sure that you have the money necessary to enjoy your bike – and afford to keep it.

Motorcycle Loans And Bad Credit

People with bad credit can obtain motorcycle loans, but just like auto loans these types of loans will have a much higher interest rate than motorcycle loans for people with excellent credit. Credit problems such as delinquent accounts, bankruptcy, or no credit history will all raise interest rates and make obtaining financing difficult in some cases. There are lenders who specialize in things like bankruptcy motorcycle loans, but just because a lender specializes in bad credit motorcycle financing does not mean that the interest rates will be lower or the application process any easier. If you are unable to obtain financing through a traditional lender, you should conduct an Internet search to find lenders who specialize in motorcycle loans for borrowers with bad credit. Even though you have bad credit, it does not mean that you should pay an application fee, origination fee, or closing fees. Look for a lender that does not charge unnecessary fees, and if necessary get a co-signer to bring the interest rate down.

Honda Motorcycle Financing

If you are planning on buying a Honda motorcycle, you may want to consider obtaining financing for your purchase directly through Honda. You don't necessarily need to obtain financing through Honda because you can get your loan through any other lender before you ever head to the dealership. Honda does not allow applicants to apply for Honda motorcycle financing through their website prior to buying the motorcycle, but you can print out the application and fill it out before going to the shop for the motorcycle. Having the application already filled out when you arrive at the Honda motorcycle dealership will save you a little bit of time, but you will still need to await a response from the finance department before you know if you are approved or not. Don't allow the financing process to stop you from negotiating the best price for your motorcycle purchase. Even if you use Honda for the financing, you should still spend some time trying to bring the cost of the motorcycle down.

Guaranteed Motorcycle Financing

If you have bad credit and have been turned down for financing in the past, you may wonder how some companies can advertise guaranteed motorcycle financing. The truth is that these companies will indeed offer motorcycle loans to people with bad credit, but the terms they offer can be so outrageous that they simply aren't reasonable. Sometimes the interest rate will be so ridiculously high that even applicants with the worst possible credit shouldn't accept the loan. Other times, the lender will approve the applicant with the contingency that the applicant will supply a large down payment, even though the majority of applicants with bad credit do not have access to substantial down payments. Not all lenders use these tactics, but some motorcycle lenders who claim to be able to finance absolutely anyone will employ these tactics when necessary.

You should know that you can probably find a motorcycle loan even if there are some dings on your credit report, but the worse your credit is the higher your interest rate will be. A bad credit motorcycle loan may also contain extra fees or have an extra long amortization. Always read all the documents before accepting a motorcycle loan, and never allow yourself to feel as though a lender is doing you a favor by approving you for a motorcycle loan.

Find Motorcycle Financing

If you decide to buy a motorcycle and need financing, you should take some time to shop around for the best interest rate available to you. Just like with auto loans, different lenders offer different interest rates at different terms, and it is truly worth it to spend the time finding a low interest rate because it will save you plenty of money over the life of the loan. Although motorcycle financing interest rates are generally higher than interest rates for new and used cars, if you have excellent credit you will be able to find a reasonable interest rate. You can check with any lenders that you currently do business with, or you can use an interest rate comparison website like BankRate.com to find the best loans available in your area. There are also a few companies which act as motorcycle loan brokers; you fill out an application through the company and then they turn around and send the application out to multiple lenders to find the best interest rate. You should not have to pay for using this type of service, but be leery of giving your personal information to companies with which you are not familiar.