Everything You Need To Know About Motorcycle Loans
Need a ride sooner rather than later?
Need a ride sooner rather than later? We get it and we have the solution! Whether you’re purchasing a Scooter, Harley Davidson or a Sports Bike, we can get you out on the open road faster than you can say Kawasaki!
Why choose LoanOptions.
No matter your reasons, it’s important to do your research on what loan suits you best. And everybody knows that research takes forever! With LoanOptions you can compare and find the best loan for you within seconds! The bike buying journey should be a fun one, stress free and with all the information at your fingertips. Cuz that's the way it should be!
A motorcycle loan is a speciality loan to get your dream two wheels off the dealership floor and onto the open road.
To secure or not to secure your loan, that is the question! If you don’t know what those words mean when they pop up in our comparison tool, you’d better read on and learn quickly!
A secured loan uses the asset being purchased, in this case the car, as security for the loan. If you the borrower can’t repay the loan, the lender can reclaim the asset to cover the costs. Although if the sale of the asset doesn’t cover the full amount owing, the borrower must pay the difference.
The benefits of secured loans is that they usually result in achieving a lower interest rates, due to the lower risk factors from a lenders point of view
In an unsecured loan scenario the lender does not use any assets as a security (no collateral). This comes with a higher charge interest rates when compared to secured as the risk is more for the lender.
These types of loans are not generally for cars, because you can usually save money by using the vehicle as security. Some situations that an unsecured loan might be useful for a car, is if the car being purchased is not an acceptable asset for that specific lender, if the asset is too old or even if you wish to borrow more than the actual purchase price by a substantial amount to cover costs or customisations to the car.
When getting a motorcycle financed, going for a newer model tends to net you a better interest rate. Newer motorcycles are less likely to break down, are easier to service, and tend to go for more at auction than fossils.
On the other hand, lenders like to slap on premiums on loans for an older bike, leaving you with a hefty loan that’s comparable to financing a new motorcycle, despite the base cost of the old model being cheaper.
This all changes if the motorcycle you’re looking to finance is ancient enough to be a collector’s item. Some lenders will still treat the classic motorcycle’s age as a liability, but there are lenders who have special offerings for vintage vehicles that will be more advantageous.
including Banks, non-bank and private lenders!
When it comes to which lender to choose, you’re spoilt for choice. Banks, non-bank lenders and private lenders generally offer secured loans, and their rates can vary from being competitive to very expensive. Dealers also offer finance, but would you ask your salespeople about financing? That's what we thought…Jump onto our loan marketplace and find out for yourself!
Length of the Loan.
The shorter your loan period, the less total interest you pay. However, as you need to pay more each period, it might not be feasible to make the loan as short as possible. Striking a balance is key. Aim for a loan agreement that allows you to comfortably make your repayments whilst minimising the interest. Be aware of any fees or charges for paying out your loan before the agreed period, as this can blow out your costs. LoanOptions reveals hidden fees and gives you confidence that you are getting the best deal.
While you don’t want to pay off your new purchase immediately (why are you here otherwise?), the bigger the deposit upfront, the lower your repayments and interest over time will be. Putting down at least some deposit can also help secure you a lower rate with certain lenders. Finding the right loan option could mean more savings for you!
What’s a balloon payment?
Some motorcycle loans offer balloon payments or residual payments. This means you pay off part of the loan with smaller regular repayments followed by a final large lump sum (this is the balloon bit). At this point, if you can’t afford to pay off the balloon, you can either trade the bike back in, or refinance the balloon amount with a new interest rate. Going for a balloon gives you more financial freedom, but given the daunting task of repaying it in one go, you’re likely to end up refinancing, which will increase the total amount you have to pay off.
Interest in Interest.
You hear it everyday on your TV, news feeds, and radio. But what of it? The best thing to remember is to research, research, research! Shop around to make sure you’re getting the best deal and tailor your loan agreement so that the repayment levels and interest rates suit your circumstances. And you can do that with Loan Options that compares over 60+ lenders instantly, so you know that you are getting the best!
What is Refinancing?
Feel like you're not getting the best deal? The loan market has changed for the better, and if you have an existing loan you can revisit to see if there are any new or competitive offers out there. The future is transparency! This is an attractive option for those that feel they might not be on the best interest rate, or maybe the repayments are a little too high. It’s also an opportunity to revisit the correct loan term to be selected and any other ideal features you wish to have on the loan.
Insurance is a MUST for a secured loan–no lender will provide funds or settle the loan without it. When you take out insurance for your motorcycle, market value isn’t always enough, so try to find comprehensive insurance that offers agreed value. In some instances, the loan balance may reduce SLOWER than the value of the car. This can create a risk of there being a shortfall if something went wrong.
The devil is in the details, and it can be more than a pain if you do not read the fine print properly or if not all associated fees are brought to your attention as a borrower.
Ask yourself these questions:
Are there any entry or exit fees?
What are the late repayment fees?
Are there fees for paying your loan off early?
Are there any other added costs that could come up?