Tips on getting a good bike loan

Nowadays, by the mere mention of any kind of a loan people shiver and turn their heads away. They are left behind with the impression that it is a never ending circle they can be stuck in. Yes, any kind of a loan is risky and hard to hold on to, but for most of the people which live their lives with lungs full and indulge themselves from time to time, this shouldn’t represent an obstacle or a blockage, but a method to help them fulfill their dreams. The procedure of applying for a bike loan does not differ much from the car loan application. The main difference is the risk that banks put on it. Motorcycles are more often crashed or stolen than the cars are, therefore banks are often setting higher demands before the approval. This way they are securing their loan. Applying for a bike loan can be stressful and tiring, but there are ways to make this process much easier. Here are some tips you should keep your mind on.

Check your credit report

You need to keep your mind on the fact that you are NOT applying for a personal loan or a car loan. These are similar to the bike loan, but you need to remember that this is a HIGH RISK loan. If you are stuck with some high credit debt or you have any inaccurate information in your credit report you WILL be declined. Then the banks will often offer you personal loans which have higher interest rate and higher taxes. If you have any debts make sure you repay them. It is also advisable to keep some money on your opened accounts. Lenders (banks) love unused money. Run a thorough check of your credit report and if you find any inaccuracies make sure you report them on time, so they can be fixed before you turn in your application for a bike loan.

Be aware of your budget and it's limits

I am well aware of that most of you motorcycle lovers would lie to ride Dodge Tomahawk V10 (>550 000 $), but your budget limitations are such that you couldn’t even afford a Vespa Scooter. Be aware of your limits. Before applying for a bike loan chose wisely. It is not only important to buy the motorcycle that you want, but also a motorcycle that you can afford. If you go way over your head, you will get stuck with monthly payments that will overwhelm and burden your budget significantly. This is a high risk loan so often the penalties for skipping payments can be severe (as in larger interest rates or tax penalties). If you want to buy a better bike but currently cannot afford that loan amount, it is advisable to wait a while and save up money. This way you will be much closer to that awful “NEEDING-GETTING’’ scale.

Understanding the loan procedures

People who are getting a bike loan for the first time and have no experience in that procedure will be exposed to the risk of getting a lame deal. You should not be afraid to ask around and spam with questions considering the loan. The information you collect and experienced advices that you adhere will help you greatly along the way and will liberate you from the stress and fear of the unknown. The lack of information can and most probably will lead you to increasing your monthly payment due to higher interest rates. It is important to stick to your budget limit and thus avoid loaning more money than you ACTUALLY NEED.

Keep your eyes open for other factors as well

There are various factors that can help you on our choice of the right bike loan that will most fit your budget. For instance, laziness is your worst enemy. Before submitting a form of application for a bike loan, you need to check AT LEAST three of your nearest banks for quotes. By this “at least three” I meant that is recommended to check more, and not only banks, but community lenders, credit unions and credit card companies as well!!! There are three important factors for a loan:

1      Interest rate

2      Monthly payment

3      Loan length

You know you got the best deal when you have the loan that has the lowest interest rate, low monthly payment and shorter term of repayment. This way you will not end up overpaying your bike. Compare quotes, negotiate and inform yourselves on time. After all it is one of your greater milestones in life. Consider these options and study them well, and in no time, you will have the most fulfilling satisfaction of boasting to the car drivers who will envy you for your parking options. 

5 Steps to the best motorbike loan

It is well known fact that financial institutions take your credit score into consideration before approving a motorbike loan. Nevertheless, many people disregard this, although it impacts the term of their motorbike loan as well as the interest rates assigned to the loan.

If you are aiming for lower motorbike loan rate, it is of great importance that you consider your credit report as a picture of a risk you can represent to your lender. Your credit score is basically a benchmark which is used to evaluate and assign a risk factor to you. This affects you when applying for any loan, as well, and especially a motorbike loan, being this is a high risk loan. Factors of your credit alter your credit score every day. Before engaging in a motorbike loan, review these five steps that are adduced. They are designed to help you improve your credit score and as a conclusion lead you to the best motorbike loans with lowest interest rates.

Watch your debt

This is a very important factor. Although banks are competing to loan you money and get more clients, they are aware of the risks that defaulters bring. You should always keep your account balance under 35% of your credit limit. Many financial institutions take credit card debts as risky and may not easily approve your motorbike loan. Even if they approve, you may be certain that you will not get the best rate on it. Here is an example. If you have a credit card with a limit of 10 000$ you should keep your debt below 3 500$ when applying for a motorbike loan.

Make your payments on time

Regular payments provide you a positive score in your credit report. Motorbike lenders don’t like people with debts. It’s that “LATE” notice in your credit report that raises your interest rate. Be very cautious of this. Make your payments on time, at least a few months before applying for a bike loan. This will give you more time to gather up some money to have a bigger equity in your car as well. If you have a period of time with no debts and no stray and unpaid bills it will be shown as a big plus in your credit report and will increase your credit score.

Establish your credit early

Time is an essential factor of your credit report. Thus, it is advised to start your credit build early. Having one or two credit cards can help you greatly in that. There is a catch in this. If you have small and frequent purchases and, most importantly, a positive balance at the end of the month, this strategy is set to succeed.  Lenders love their clients with unused money on their accounts. You should always keep your oldest account. As we mentioned, the length of your credit history can gather more facts and bring you to positive score and that makes a great difference in your approval for a motorbike loan.

Avoid excessive credit inquiries

When you apply for a motorbike loan, it is normal that you will be asked for a driver license or SSN (social security number), so the lender can perform a credit inquiry. If you do this on more places than one, it will bring a negative score in your credit report. Compare prices and offers at your bank as well as dealerships and other financial institutions. When you find the one that soothes you THEN apply for a motorbike loan.

Check your credit regularly

Online credit check is now available and offered by many creditors. Make sure you check it frequently (at least once a month), so you can perceive and point out any inaccuracies that you might find. If you find any inaccuracy, contact your creditor immediately for the repair and reevaluation, so that it would not grant you negative points in your credit report.

Remember, credit score is by far the most important thing you should always keep your wits about. Many people are afraid of loans because they cannot handle their money well. If you have your credit score taken care of, you will open many doors in your life. Loans are meant to help people fulfill their dreams and should not be considered a necessary evil. Review these steps thoroughly and you will be on the right path for buying your dream bike in time. 

What You Should Consider Before Applying for a Motorbike Loan

There are various ways to finance your motorbike loan. You can either do that through the dealership or any financial institution such as banks, credit unions, etc.

Bank motorbike loans are often better than the dealership. However, this may not always be the case. If you are looking for the most convenient choice, you should let the dealer organize the motorbike loan for you. This is the easiest way, if you are already at the motorbike lot, purchasing it. On the other hand, if you are looking for a better deal you shouldn’t consider this.

Getting a motorbike loan resembles the process of getting a car loan. Only thing that differs here is that not many banks will approve it, since this is a high risk loan. Motorbikes often succumb to thefts and crashes. Yet people often chose motorbikes over cars because they can travel the same distances faster for significantly less gas. Even though motorbike loans are more available now, some banks still refer to it as a specialty loan.

First thing you need to do is to ask for your credit report. Never apply for any loan without checking it. This is by far the most important document for this action. According to the passed Fair Credit Reporting Act, many creditors are obligated to provide your credit report to you. This service is free once a year. On top of that report you will find your credit score which is presented with a number from 1 to 1 000. If you have your credit score over 695, you can be sure that you will have no problems in obtaining a motorbike loan. However, if your score is under 695, you should consider either improving it or qualifying for a personal loan. Personal loans are an option, but their interest rates are higher, thus they are not specialized loans.

Before applying for a loan you should consider what motorbike you wish to buy, as well as its price. Take in consideration any add-ons you are willing to purchase, such as item enhancements, motorbike wear and gear and/or tools. This is an example of the most common mistake:

• “Can you tell me how much money would you need us to lend you for a motorbike you decided to buy?”
• “I don’t know. I haven’t thought of it yet. Probably around 10 000$.”

DO NOT EVER TRY TO GET A MOTORBIKE LOAN WITHOUT KNOWING EXACTLY HOW MUCH MONEY YOU ACTUALLY NEED! If you do this you won’t be stuck with excess money which, due to interest rate, increases your monthly payment.

Do not go shopping for a motorbike at the dealership before consulting your bank or a financial institution in which you are applying for a loan. There is a good reason why people have aversion to dealerships. Their financial services offer “good rates” and “special offers and promotions”. Some of these promotion researches show that the interest rates are great… for the first 12 months. After that they go way up and you might find you overpaid greatly. It is a salesman gimmick they are using, hoping you will be overexcited and buy a motorbike without thinking long term. When asking about your motorbike loan in your financial institution you should keep these questions in mind:

• “Is the interest rate fixed or does it vary over time?”
• “Will the interest rate change in time for ANY reason?
• “Do you have to pay any administrative fees and taxes?”
• “What are their prices?”
• “What are the penalties for skipping payments; let us say…… a month or two?”

Nowadays online banking became very popular, so the financial institutions are improving it every day. You can skip some administrative taxes and fees by applying for a motorbike loan online. Terms of repayment for motorbike loans purchased online vary from 12-36 months. There are some extreme cases where the end term can reach up to 72 months. Yet again you should keep in mind the history and status of your lender.

• “Do they have good customer service?”
• “Will they be able to give you good advice and instruction in times of need for it?”
• “Do you have a possibility of choice on what date will your repayments will begin and end?”
• “Can they automatically deduct the payments from your account, making the whole repaying process simple?”
• “Will you have a possibility of an online check?”

Getting a motorbike loan does not necessarily always have to be a tense process. It can actually be a benefit for you in a lot of ways.  The research will always do you good, plus you are upgrading your credit report. And in the end, you will have your dream bike roaming and traveling down the open road… am I right?