Motorcycle loans are installment loans that allow you to cover the costs of a new or used bike and repay it in monthly payments over a fixed repayment term. Most loan amounts are based on the purchase price of the motorcycle, and repayment terms typically range from two to seven years. When you have a motorcycle loan, the lender will register themselves as a lienholder on the title and can repossess the bike if you fail to make your monthly payments. As with most types of loans, your credit score will play a big role in how much you can borrow and what your interest rate will be.
You can find motorcycle loan credit union at many financial institutions, including the bank where you have your checking and savings accounts and credit unions. Some banks may offer special interest rates and terms on motorcycle loans to account holders, and credit unions typically have lower rates than other lenders, especially if you’re a member.
Once you’ve determined what type of loan you need, you should calculate the amount you can afford to borrow, which will depend on how much your bike costs and your current budget. Consider not only the cost of the motorcycle but also any additional costs you may incur, such as protective gear, insurance or motorcycle classes. Once you have a good idea of what you can afford, you can start shopping for the best deal on a motorcycle loan.
If you’re a first-time buyer, it’s a good idea to save for a down payment to reduce the amount you have to borrow and minimize your total debt-to-income ratio. It’s also a good idea to comparison shop different makes and models to find the one that meets your needs and fits within your budget. Getting preapproved for a motorcycle loan can help you shop confidently, as it will tell you the interest rate and payment term you’re likely to be approved for.
While you can get a motorcycle loan with bad credit, it’s important to take the time to improve your credit score before applying. You can do this by reducing your debt, paying your bills on time and keeping credit card balances low. Once your credit score is higher, you’ll be able to qualify for better loan terms and potentially save money on the life of your motorcycle.
While you can buy a motorcycle with a personal loan, it’s typically a better option to get a motorcycle loan from a credit union or other financial institution that’s tailored for motorcyclists. This is because these loans are designed to protect you from the risks associated with riding a motorcycle, and they typically come with lower interest rates than personal loans do. For those with poor or no credit, a CU SoCal Credit Builder loan can be an excellent choice to help you build your credit history and purchase a motorcycle in the future.