Brake for Motorcycle Loans

Get financing for a motorcycle, sport bike, moped or scooter

Getting a Motorcycle Loan

Four wheels move your body, but two wheels move your soul. When you’re ready to join the culture of the bike world — whether it’s the cruisers, the tourers, the off-roaders or the scooter and moped riders — the fact is that bikes cost money, and getting a motorcycle loan might be the best way to join the wave.

Motorcycle loans are similar to car loans, but there are enough differences to warrant some research before you apply for a loan. By choosing the motorcycle lender that’s right for you, you can save money on your ride.

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Loan Term

24-72 months

Interest Rate

4.5% to 10%

Down Payment

10% to 20%

Types of Motorcycles

There are a variety of motorcycle types available, so think about why you want to ride. Do you want to cruise the highways in comfort on a touring bike or boost your gas mileage on your daily commute?

For Commutes and Road Trips

  • Chopper
  • Cruiser
  • Standard
  • Touring
  • Trike

For Tracks and Trails

  • Dirt Bike
  • Dual Sport
  • Off-Road
  • Sport Bike
  • Super Sport

For Commutes and Fuel Economy

  • Moped
  • Scooter
  • Underbone

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Motorcycle Financing: Risk vs. Reward

Although there are similarities between motorcycle and car loans, lenders see two big differences.

1. High Risk

Accidents happen. From a lender perspective, a car accident is much less expensive than a motorcycle accident. Statistically, bikes are totaled more often, and so the lender loses its collateral for the loan, which increases the chances that the loan won’t be repaid.

2. Luxury Buy

Lenders view a motorcycle as a luxury purchase rather than necessity. In general, you ride only on good-weather days and only for part of the year. Bikes are stored during the winters and rainy seasons. If a borrower falls on hard times, he’s more likely to keep up payments on a vehicle — a necessity for getting to work that can be used year-round — as opposed to the motorcycle.

Because motorcycle loans are riskier for lenders, interest rates tend to be higher and loan terms tend to be less favorable when compared to auto loans.

Motorcycle Loans for Those With Bad Credit

If you have bad or no credit, you’ll have a tougher time qualifying for a motorcycle loan. You have two main options.

  • Offer a larger down payment. Plan to offer at least a 20 percent down payment. The worse your credit is, the more you may need to put down.
  • Improve your credit. Get a copy of your credit report from the credit reporting bureaus. Dispute any erroneous information.

Motorcycle Loan Rates and Terms

Rates and terms on motorcycle loans can vary widely depending on a number of factors.

Loan Term

Generally speaking, the longer the loan, the higher the interest rate; the shorter the loan, the lower the interest rate. Lenders find shorter loans less risky, which means a lower interest rate for the borrower.

Borrower’s Credit Profile

The borrower’s credit can have a significant impact on the overall cost of the loan. Borrowers with lower credit scores and more existing debt face higher interest rates and less favorable loan terms because they represent a greater risk to the lender.

Down Payment

The amount of money the borrower puts down on a loan can have a large impact on the interest rate, as well as the length of the loan term. If you want a lower interest rate or a longer loan term, offer a larger down payment.

Refinancing a Motorcycle Loan

Refinancing a motorcycle loan may save you money if your new loan has a lower interest rate. You also may be able to lower your monthly payment by refinancing. Either way, your first step should be to compare lenders to find the one that offers the lowest interest rate. Some, but not all, lenders may require an appraisal of your motorcycle.

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Types of Motorcycle Financing

Credit Card

Many manufacturers and dealers offer branded credit cards that can be used to purchase motorcycles. Although using a credit card is perhaps the easiest way to purchase a motorcycle, it also can be one of the costliest, as credit cards tend to have higher interest rates than other financing options, especially if you have less-than-stellar credit. A secured loan that uses your motorcycle as collateral may offer better rates. Always check the fine print on credit card offers.

Bank or Credit Union

Although motorcycle loans are not nearly as ubiquitous as car loans, many banks and credit unions offer loans geared specifically toward motorcycle purchases. National banks and credit unions may be more apt to offer motorcycle loans than local lenders, but be sure to shop around and find the lender offering the best rates.

Dealer Financing

Motorcycle dealers may offer in-house financing or partner with a third-party financial institution to offer loans. Dealers often offer enticing promotions, such as no interest for a set period of time. Regard these promotions with a skeptical eye, however. For example, some loans offering zero-interest for a set period of time revert to a high interest rate if you’re late on a payment. Or the interest rates skyrocket after the introductory period ends. Be sure to read the fine print before signing a loan agreement.

Personal Loan

If you take out an unsecured personal loan to purchase a motorcycle, you don’t have to offer up the motorcycle as collateral. That can be good for you, because if you fail to repay the loan in the future, the bank can’t repossess your bike. Unsecured loans typically have higher rates than loans that are secured by collateral, however.

Used Motorcycle Loans

When looking into used motorcycle loans, keep in mind that the financing may be more expensive. Compared to buying a new motorcycle, you may need to make a larger down payment, and pay a higher interest rate.

This is because the lender’s risk increases the more mileage a motorcycle has on it. Additionally, motorcycle depreciation can vary widely. Desirable brands, such as Harley Davidsons, retain their value better than other models, for example. Use a tool such as Kelley Blue Book to look up the value of any motorcycle you’re planning to purchase.

Keep the following additional points in mind when shopping for a used motorcycle.

  • Examine the vehicle identification number (VIN) carefully. Scammers may try to alter the original VIN to hide the fact that a motorcycle’s been stolen or involved in a major wreck.
  • Take the motorcycle out for a test ride. Make sure you’re comfortable riding it and ensure it runs well.
  • If the seller is a private party, ask permission to take the motorcycle to a reputable mechanic who can accurately assess its condition.

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