True two-wheelers fans will tell you that this ride is the most exciting thing you will experience. Wind in your hair, freedom, and long drives through fantastic landscapes, what more could you ask for? Maybe that’s enough to think about buying a motorcycle and boosting a dose of adrenaline in your life.
While this idea sounds good, the execution is not always simple. Motorcycles, especially those intended for long trips and road trip adventures, are pretty expensive. So, of course, the best option is if you actually have enough money for this purchase and it doesn’t burden your budget. Since that’s not a typical case, you need alternative ways of financing.
Considering a big purchase such as a car or a motorcycle, it may be best to apply for a loan and avoid paying this high cost at once. These are usually short-term arrangements that need no collateral, i.e., the two-wheeler you buy is a pledge that you’ll settle your obligations on time. So before deciding on motorsykkel lån, you should think about the pros and cons of this option.
Should You Lend Money to Finance Motorcycle Purchase?
Loans can be a lifesaver when you’re facing financial problems. Many deals are available with competitive interest rates and are affordable for the average salaried professional. You can apply even if your unemployed, provided you have any other income.
Two-wheeler loans are convenient and offer easy repayment options. That’s probably not a necessary purchase but pleasure or fulfillment of your dreams. If you can afford it, go for it. But it’s essential to understand the lender’s terms and conditions before applying.
Motorcycle loans require no down payment, but you might need a cosigner. But lending money for this purchase ‘takes’ your two-wheeler as a pledge. That differs from regular personal loans, which are unsecured arrangements, meaning you have no collateral.
Different lenders have different lending terms and limits. These are something you must accept but not at all costs. The point of borrowing money is that repayment shouldn’t burden your finances. So if you plan to buy a motorcycle this way, make sure you choose the right loan based on your financial situation and needs.
Simple Application Process
The Internet and modern technologies have eased the life of modern man. For example, just a few mouse clicks have replaced long lines and hours of waiting to get a job done. Likewise, lenders rely on online tools, enabling quick and easy applications and procedure completion.
The process of applying for a motorcycle loan is relatively simple. You can save time and money by doing so on the lender’s website. The procedure is quite straightforward, but you must take care of the details. Even a typo can cause your application to be denied.
The procedure starts with filling out a simple form and attaching the required documents. Once you’ve done that, you should wait for a decision in the next couple of days. Most lenders have sped up the procedure, so you can get your approval or denial letter on the same day.
Motorcycle loans are available through many sources, including banks, private lenders, car dealerships, and financing platforms. Just make sure you do your homework and research your options. Only that way can you avoid scams and data misuse.
These loans are typically secured by the motorcycle you’re buying. As such, the lender can repossess our two-wheeler if you default on debt repayment. You can look for unsecured personal loans if you don’t want that risk. These don’t require collateral but typically carry higher interest rates than secured loans.
While traditional lenders like banks may charge high-interest rates and fees, credit unions typically offer better rates and terms. They are more likely to understand your financial background and provide a financial arrangement that fits your needs.
Motorcycle loans offer the benefits of affordable monthly payments and flexible terms. However, rates vary depending on the loan type, borrowed amount, and personal credit history. The latter information is easy to check, so lenders can do it quickly and answer your query on the same day.
It’s also possible to obtain pre-approval online. One of the advantages of this procedure is to get an idea of the amount you want to borrow, your interest rate, and the payment schedule. That will give you confidence when shopping for the best loan offer. Besides, pre-approval speeds up the approval process even more. So once approved, the funds can be in your bank account on the same day.
Few Requirements Needed
The application process is fast and convenient, and lenders usually have only a few requirements. One of them is an excellent credit score. The best way to determine it is to check your credit report. Eventually, you can correct some mistakes and improve some parameters in it.
Lenders need your credit report to evaluate your finances and spending habits. Aside from credit history, lenders will also check your DTI ratio. If this parameter is high, you will be less attractive to lenders and probably turned down. On the other hand, if you have a low debt-to-income ratio, it’s more likely that you’ll make on-time payments.
On the following page, find more tips on improving your credit score:
Flexible Lending Terms
When comparing loan terms, the key is to shop for repayment options that suit you best. The rates depend on your credit score at the time of application and may change. So look for negotiable deals, as these allow you to pay off a loan with less interest.
If lenders find you trustworthy and reliable, that can bring extra perks and make your loan an even better deal. For example, some banks offer promotional rates as low as 1.99%. These can be even lower during special events and holidays. But these terms may not be available for everyone, so if you have good credit, you should shop around before choosing a lender.
You Can Apply with a Bad Credit Score
Many lenders offer motorcycle financing but won’t even consider applicants with bad credit. If you’re among them, that limits your choice. So you might be tempted to accept any loan deal and make a mistake. Their terms are generally strict – a high-interest rate or a shorter repayment period.
It’s worth checking with your bank or credit union to find out their offers. Also, try looking at other lenders if your bank doesn’t approve you because of your poor credit rating. They may be willing to offer better rates to those with bad credit and less strict lending terms. However, don’t forget to consider the total cost of a motorcycle loan and the time it will take you to pay it back.
Disadvantages of Two-Wheeler Loans
Motorcycle loans can be a great way to finance a new two-wheeler. But there are several drawbacks to be aware of. Probably the most significant downside is the entire cost of this financial deal. Besides, two-wheelers depreciate quickly, so you’ll likely overpay your vehicle during repayment. Also, don’t neglect the risk of losing your motorcycle if you fail to repay your debt.
High Overall Costs
Two-wheeler loans are generally costlier than personal loans. For example, the repayment term for these financial arrangements can be one to seven years. At the same time, it’s usually one to five years for personal loans. Therefore, a longer repayment can result in lower installments but higher interest charges and overall costs.
As already said, motorcycle loans are mainly secured. The vehicle you buy is a pledge if you have difficulty repaying the debt. In case you default on payment, the lender will overtake your motorcycle. So you will be left without a vehicle and the money you’ve already paid.
There’s a chance to arrange an unsecured loan arrangement with your lender, provided you have an impeccable credit report. In that case, you don’t have to fear the motorcycle seizure if you are late or skip the installment payment. But be ready for a shorter repayment period and higher interest. These put you at a higher risk of default, so think carefully about this option.
A motorcycle is a great thing whether you use it for business or pleasure. There are many ways to afford this vehicle, and a dedicated loan is just one of them. You should decide on this financial arrangement only after carefully considering all pros and cons and finding the best deal.