Whether you want to buy a new or used motorcycle, shopping around for the best loan rates is a must. A few factors will determine your rate, including your credit score, your debt-to-income ratio and the type of motorcycle you purchase. You can use online calculators to find out how much your monthly payments might be and how long you might have to repay the loan.
To get the lowest rates, you should have good to excellent credit. Lenders will look at your credit history to see if you’ve paid back previous loans on time. To improve your chances of approval, you should do what you can to make sure your credit score is high enough before you apply for a motorcycle loan.
Some lenders offer unsecured personal loans motorcycle loan rates for those with bad credit, which may have lower interest rates than secured loans. To qualify, you should have a FICO score of 690 or higher and prove that you can afford your debt payments.
Another way to secure a low motorcycle loan rate is to make a substantial down payment on the bike. This shows the lender that you’re a serious applicant and can handle a larger payment. Some lenders also offer motorcycle refinance options, which can help you save on the interest you’ll pay on your old loan.
A motorcycle loan lender will also look at your other debt and expenses to determine whether you’re able to afford the loan. For instance, some lenders require a debt-to-income ratio of less than 36%, meaning you’re paying at least 36% of your income towards debt payments each month.
You’ll also want to consider the total cost of the motorcycle you’re buying, including things like insurance and protective gear. These costs can add up, but it’s worth considering them when shopping around for a motorcycle loan.
Many motorcycle dealerships offer financing, which can have different rates than independent lenders. For example, Harley-Davidson offers dealer financing with rates starting at 3.75% over seven years for new motorcycles. However, dealership financing may only be available for specific models and have other restrictions.
If you’re unsure of which lenders to consider, you can prequalify for a motorcycle loan by entering basic information such as your name and employment status. Some online lenders also allow you to prequalify without affecting your credit score.
When you’re ready to apply, the lender will ask for more details like your annual income and current debt balances. They’ll then compare this information with your credit report and other eligibility criteria to decide if you’re approved for the loan amount you requested. You should be notified of the decision within a few hours or days, depending on the lender. If you’re rejected, you can look at other options for a motorcycle loan or try to improve your credit score before trying again. If you’re accepted, you can start the process of buying a motorcycle that fits your needs and lifestyle.