If someone is ready to buy a motorcycle, they can take out a motorcycle loan and receive a lump sum of money upfront to pay for their bike. Then, they’ll repay what they borrowed over time through fixed monthly payments or installments over an agreed-upon term.
So what is the typical term for a motorcycle loan? In most cases, it’s anywhere from 12 to 60 months. While a longer term means lower monthly payments, it will cost the borrower more in interest over the life of a loan.
Let’s take a closer look at motorcycle loans and how they work.
Where to Get Motorcycle Loans
Fortunately, there are several places people can turn to for a motorcycle loan, including:
- Online lenders: Online lenders offer different types of personal loans including motorcycle loans. Since they have low overhead costs, they often offer low rates and a fast application and funding process.
- Banks: If someone is already a customer at a specific bank, it may make sense to work with them for a motorcycle loan, especially if they can lock in favorable rates and terms.
- Credit unions: While it’s essential to join a credit union to take out a motorcycle loan through it, doing so comes with benefits like personal service and lenient qualification requirements.
- Dealerships: If someone purchases a bike at a dealership, they might be able to apply for financing through them.
How to Get a Motorcycle Loan
These steps can help an aspiring motorcycle owner secure financing for a new or used bike.
- Check credit: Before applying for a motorcycle loan, they should know where they stand credit-wise. This can give them a good idea of what types of lenders and loans to look for. They may Visit AnnualCreditReport.com to check their credit reports for free. It’s important to dispute any errors or inaccuracies that may exist.
- Decide on lender type: As mentioned above, motorcycle loans are available through banks, credit unions, online lenders, or dealerships. Each option has its own pros and cons that should be considered before choosing a lender.
- Shop around: Next, it’s time to research and find the various available lenders and loans. When comparing motorcycle loans, prospective borrowers should focus on factors like interest rates, terms, fees, and customer service.
- Apply: Once someone decides on a lender and loan, they’ll need to apply. Most lenders will let them complete the application process online through their website. They should be prepared to share details like their desired loan amount, the cost of the motorcycle, their Social Security numbers, and their monthly income.
- Get funded: Upon approval, they’ll need to wait for their funds. If they went with an online lender, the money might be in their account via direct deposit that same day or within 24 hours. Funding through a bank, credit union, or dealership might take a few days or weeks.
The Bottom Line
There’s no denying that motorcycle ownership is exciting. But it can also be expensive, which makes a loan a great option. Banks, credit unions, online lenders, and dealerships offer motorcycle loans. Before a motorcycle owner signs on the dotted line and commits to a loan, they should explore all their options to find the ideal interest rate and term for their unique situation.
About OneMain Financial
OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.