Financing Your Bike

What you need to know

You may find your options for motorcycle financing are very limited compared to a home mortgage or used car loan. Why is this? Simply put, there’s unfortunately not a lot of money to be made in motorcycle loans compared to the average risk they represent. (especially when the borrower has less than perfect credit. )

Home loans are easy because they backed by the real estate for which they were borrowed and car loans are big enough loans to allow the lender to make enough money to justify the risk. Credit cards are somewhat easy to get because the card company will set your maximum based on your risk level, usually starting most borrowers at $500 – $3,000 spending limit. Most motorcycles unfortunately fall smack in the middle of those two categories. Wouldn’t it be nice if you got offers for a new motorcycle loan in the mail everyday like you do home refinance and credit cards?

Don’t worry – just because there’s not tons of them out there, it is possible for most anyone to obtain the financing they need. Just remember, the greater the risk to higher your interest rate will be so be prepared. The most important thing to know is YOUR SITUATION and the right place to start! Starting your search for a loan can totally blow your whole chance by flooding your credit report with a bunch of inquiries. This is a bad thing.

Your Credit Score

If you don’t already know exactly what your credit score it and what it on your credit report, this is where I suggest you start. It is far too common that when you rely your lender to inform you of your credit they will exaggerate and harp on anything bad, regardless of the issue, when it was or what’s been demonstrated since then and will charge you a higher interest rate than you deserve.

Example: You could have 5 years of great credit history and a bad mark or two from an old account you did not even know of. When the lender asks you, “what about this late payment on your department store card” and you say “HUH???”, the lender immediately is going to think, “cha-ching, add another point to the interest rate”. What if he asked you about that and you said, “well that is from 5 years ago, is only for $89 and I’ve actually been trying to get those guys to send me details of the claim so I can get it cleared up and have yet to receive anything.” (or if the situation is far worse like a repo or something you can at least be prepared to offer details of why it happened then and why it won’t happen now).

There’s also a very good chance there’s things on your credit report you are not even aware of! Knowing what’s on there is there only way to clean it up.

Bottom line is if you have excellent credit then you need to start immediately at your best rate lending source. If you have bad credit then starting with a “good credit only lender” is only going to make your chances that much worse. Lots of recent credit inquiries on your report is not good so it’s best to start where you think your chances are best!
Refinancing

Motorcycle refinancing can be a simple task and, in nearly all cases is a chance for you to save time and money. Because you are paying off an existing loan from a different lender it will have a lower APR (annual percentage rate / interest rate). Therefore monthly payments will be lower as the interest has dropped. This can allow you to pay off your loan sooner as installments would be smaller.
What to look for when refinancing your motorcycle loan

When looking at refinancing find a company who can give you lower interest, lower monthly payments and where you can pay off your loan sooner without the worry of prepayment penalty fees.

Refinance as early as possible. Soon after you obtain the loan is a good a time as any – because most of the interest is paid in the early payments. While refinancing your loan later on in the loan period won’t save you as much money as refinancing earlier, you should still be able to save money nonetheless.
What to do when refinancing

The first thing to do when you want to refinance your motorcycle is to call the people your loan is currently with and ask for the motorcycles loan payoff amount.

Then find a finance company who is offering a lower APR rate than what you are paying now.

When you apply make sure the spelling on the application is exactly the same as your last loan as this is how they identify and find your loan.

All vehicle information must be correct – this is so the company can price the vehicle. You will need the year and model of the motorcycle and the VIN Vehicle identification number. This can be found on your registration.

You will need to refinance a loan worth more than $7500 – otherwise it it not worth the time of the refinancing company to do any lesser amount. The loan must also be an approximate amount of the vehicles value.

Motorcycle refinance loans should be approved within an hour, you should then get instructions on how to pay off you existing loan.

You will need to tell the current owner who the new lien owner will be and that they will have to send the title to them not you. There may be a fee to transfer lien holders but depending who you refinance with that could be the only fee.

Your loan can be entirely refinanced within 2 days.
Benefits of refinancing Motorcycle Loans

You can’t refinance your motorcycle loan through the same company who is financing your existing loan, as there is no incentive for them to refinance your loan as they would earn less money off you.

Benefits of refinancing your motorcycle loan include a lower APR, no frustration over dealer financing, approval is usually within the hour as long as its in business hours, and no hidden fees, and no prepayment penalties.