Motorcycle Loan Rates
These days motorcycle loan rates have been climbing due to the banks not wanting to take any undue risks with their lending. The banks were burned badly during 2008 and 2009 and as a result have tightened up their lending policies a great deal which lasts until now and will probably continue for some time. Interest rates for the best customers have been at historic lows, and are just now beginning to rise as the economy improves and more people have jobs.
Generally speaking the interest rates (or APR) have been between 7% to anywhere as high as 15% – 20% all depending on what your credit rating is. If you’re serious about getting approved for a loan they need to consider your credit score first because that will ultimately decide your rate of lending (or cost of lending). With that said, I will try to make a qualified list of the different interest rates available for motorcycle financing. The higher your credit rating is, the better the rate will be your loan. Consumers with poor credit may have a more difficult time finding someone to lend them money for motorcycles or any other type of loan. The interest rate and fees may also be higher as well if your credit rating is not so good.
Current Interest Rates for Loans
At the time of his writing a secured motorcycle loan carries an interest-rate of approximately 9% give or take .15 to .30 percent depending on the lending institution you are using. Some lenders are more competitive than others at various times of the year. It also depends on how much money they have available to invest. If their customers have made a lot of deposits with them, they are anxious to get that money working and sometimes will give slightly lower interest rate loans, rather than have the money sitting around not earning income.
Now, if you have a poor credit rating you will be spending much more than that and if you are going for an unsecured loan expect the cost of funding to be close to 15% interest. As most consumers know, it is extremely important to maintain an excellent credit rating if you want to take advantage of some of the best interest rates that are available and save money as well.
There are many different factors involved when getting approved and these are some of the obvious factors;
- buying a new motorcycle from a dealer
- buying a used motorcycle from a dealer
- buying a used motorcycle from private owner
- what State you live in and what State you are buying a motorcycle in
- your personal credit score (or FICO)
- if you have a job and how much that job pays
- how much debt you have
- what kind of debts do you have (good or bad)
- if you have a cosigner
- if you provide collateral in the form of some kind of security asset
- your past spending and payment history
Actually, there are so many different factors taken into account when you get approved for motorcycle loan and your interest rate is going to vary wildly depending on your own situation. The state you live in can also have an impact on the interest rate that you pay.
So I know it sounds like a cliché, and you hear it all the climb from lending institutions, banks, and read it on web sites, but the truth is nobody can really tell you what you’re interest rate is going to be until a have all of your information. So don’t be thinking the banks are just being annoying and trying to get you obligated into financing by taking you down the garden path in the form of a full disclosure application form. They have to have all of your particulars before they can even guess what your cost of lending will be. After all they are only trying to protect their customers and maximize the amount of money they make. If they end up with bad loans because people are not repaying their loans, then they and their savings customers lose out.
You will notice that motorcycle loan rates are higher than car loans, motor home loans, and of course mortgage loans – this only makes sense because motorcycles tend to have a lot of wear and tear and a bad reputation for depreciation. More people have accidents with motorcycles as well. I know this is extremely annoying when you have somebody who’s been riding bikes their whole life and are hoping that they can maintain the value of their bike so that there is very little depreciation, especially with some of the high quality motorcycles on the market. But the reality, just like for cars that we purchase, motorcycles depreciate very quickly and lose their value the older they get.
You need to shop around and look for the lowest rate possible and I guess you are doing that by being on the Financing USA web site which is a good start. When you are considering finally getting your motorcycle loan comeback and check out some of the rates we are posting that particular day.
Safety Gear for Your Motorcycle
Consumers who are planning to apply for a motorcycle loan should consider including all of the accessories that they will need, unless they already have them. Items such as helmets, radios, leather protection in the event of an accident etc should be included as part of the loan. Don’t forget taxes on the purchase price along with insurance and processing fees. If you are upgrading your motorcycle with various electronics these should also be included in the final price. You will want to borrow the maximum you can to pay for all of the extras to ensure that you have all of the safety gear and extras that are needed for your motorcycle.
Most lenders also expect the borrower to have some of his or her own money in the deal as well. They are looking for borrowers to have at least 25% of their own money in the deal, since they believe that owners will take better care of their motorcycle as well as make a stronger effort to repay their loans. No one wants to lose some of their own money due to non payment and repossession costs associated with failure to repay the loan. Typically what happens in situations like this is that the lender will repossess the motorcycle and sell it. There are repossession costs, selling costs and processing costs which can eat up any equity that you might have in your bike. Always repay your loans on time to avoid these issues.
Thank you for your visit.