More Than a Ten Speed - Motorcycle Loans

Motorcycles are such an enormous part of American culture, filled with connotations of rebellion and the freedom of the open road, that it is natural for many people to want to ride one.  When you get the urge to ride a motorcycle, you can talk to one of your friends and see if he or she will loan you one.  This is called a motorcycle loan.  Then again, you might decide that you would actually like to own a motorcycle.  You want to feel the wind in your hair through any gaps in your helmet, and you want to experience the open road for yourself.  Unfortunately, you may not have quite enough money to pay cash for your new motorcycle.  In this case, your best bet is the other type of motorcycle loan: a financial one. 

Do Your Homework First

If you decide to purchase a motorcycle and need a loan, it is important to do research before applying for a loan and definitely before you actually go to a motorcycle dealer.  Figure out what kinds of motorcycles you can reasonably afford without breaking the bank.  Find out where you can get the best price for the motorcycle you are looking for. 

Even more importantly, shop around for the right motorcycle loan.  There are many types of loans out there, and getting the wrong type of loan can cost you a lot of extra money in the end.  Your credit score and income will affect what type of loan you qualify for.  It may not hurt to check your credit rating through www.annualcreditreport.com (the official website for obtaining the free annual credit report you are guaranteed by law) before falling in love with a motorcycle, as your rating will greatly affect both your ability to qualify for a loan as well as your ability to make the payments.  Some companies may offer you a loan despite a weak credit rating but will charge interest rates that will significantly drive up your monthly payments. 

Choosing the Right Loan

If you have a strong credit rating you may find yourself facing all kinds of loan offers from all kinds of sources.  This is why it is so important to shop around.  There’s no other way to know whether or not you are being offered a good loan.  When you’re at the motorcycle dealer it’s too late to shop around.  The dealer will generally have either their own financing available or a set of banks that they work with who can provide loans. 

If you’ve done your homework, however, you’ll be aware of other options and you will know if you can get a better deal on a loan elsewhere.  You need to consider the down payment each type of loan requires.  You also need to consider if the loan has any extra fees with names like “administrative fees,” “final sales fee,” or anything else.  These don’t have to be deal breakers, but make sure they are comparable to the fees associated with other loans.  You also need to consider the interest rate being offered, and be wary of loan terms you are unfamiliar with.  Some types of loans will keep charging you interest even if you pay off the principle loan amount early.  You should also be wary of variable rate loans that start off low but can go up later in the life of the loan.  Choose your loan carefully, and you can enjoy your motorcycle and the extra money you have saved.