If you are interested in purchasing a motorcycle, it is important to be aware of the financing options that are available. Many financial institutions offer motorcycle loans, and the specific terms and interest rates will vary by lender and credit union. The best place to start is with the financial institution where you already do your banking, as they may offer special motorcycle loan promotions and terms. It is also a good idea to save a down payment, which can help reduce the amount of money you will need to borrow and lower your monthly payments.
Before you apply for a motorcycle loan credit union, you should crunch the numbers and determine what you can afford to spend on the bike, including the purchase price and any other costs like protective gear and insurance. This will give you an estimate of how much you need to finance, which can help make your search for the right motorcycle more focused. Once you know how much you can afford, it is helpful to compare motorcycles and pricing information online to see what different makes and models are available for your budget.
You should also be familiar with your credit score and what it means for you when it comes to securing financing. Credit scores are used to predict your likelihood of repaying a debt, and the higher your score, the better your chances of getting a favorable lending deal. It is also helpful to review your credit reports and check for errors that might be hurting your score. You can also take steps to improve your score before you need to use a loan, which could increase the likelihood of approval and make it easier to manage your repayment obligations down the road.
Credit unions, which are nonprofits that provide their members with a range of benefits, often have more competitive motorcycle loan rates than banks and other lenders. They are particularly competitive when it comes to refinancing existing loans.
The lender will use your credit report to decide what rate you qualify for and the terms of the loan. Your credit score and other factors will determine your overall creditworthiness, but a credit union can be flexible on its underwriting criteria.
Another option is to shop with a loan marketplace, such as LendingTree, which can connect you with multiple lenders at once. This can be a useful tool for those with less-than-perfect credit or those who do not want to spend time shopping around for the best rate.
Manufacturers of motorcycles sometimes offer their own financing, such as Harley-Davidson, which offers low interest rates on new and used bikes. These are secured loans, meaning the lender has a lien on your bike, and it can repossess it if you fail to meet the repayment terms of your loan. This type of financing is less common, but it can be an excellent way to get the bike of your dreams without breaking the bank in the process.