Please Note: Credit Union of Southern California does not offer Membership or loans to non-California residents (other than former CA residents who were already Members or Preferred Partner Members working in out of state locations).
Bad Credit Motorcycle Loans: How and Where to Get a Motorcycle Loan with Bad Credit
Looking to finance a motorcycle but worried about your credit? While having bad credit isn't ideal, it's still possible to get a motorcycle loan.
Get Started on Your Motorcycle Loan!
In this article we’ll explain how we can help to get a motorcycle loan with bad credit.
At Credit Union of Southern California (CU SoCal), we’ve provided low-interest vehicle loans to Southern Californians for over sixty years.
Even if your credit history isn’t perfect, don’t worry, because unlike a traditional bank, we don’t think that your credit score tells the whole the story. Come in and talk to us and let’s see what we can do!
Call CU SoCal at 866.287.6225 to schedule a free no-obligation motorcycle loan consultation, or apply online today!
What Is a Motorcycle Loan?
A motorcycle loan or motorcycle financing is used for the purchase of a used or new motorcycle. These loans are provided by credit unions, some banks, motorcycle dealerships, some manufacturers, and online lenders.
As with any loan, the higher your credit score the lower the interest rate will be. Having bad credit isn’t ideal, but there are many lenders who will approve a bad credit motorcycle loan.
Getting a Motorcycle Loan with Bad Credit
While it’s not impossible to get a motorcycle loan with bad credit, you’ll likely pay a higher interest rate on the loan amount. All lenders will look at various factors to determine your loan eligibility and your risk to the lender. People with lower credit scores are considered a higher risk to the lender, which is why they will be charged a higher interest rate to cover the cost of the risk. Be prepared for the lender to look at your credit score, credit history, debt-to-income ratio, current income, loan amount, and the value of the motorcycle.
Need to Improve Your Credit Score? Try a Credit Builder Loan
For individuals who need to establish or build credit, CU SoCal offers a Credit Builder Loan. The Credit Builder Loan is specifically designed for those who have less than optimal credit history, or no credit history at all, and who have time to work on building their credit. It comes with a 12-month term and no application fee. Learn more about CU SoCal's Credit Builder Loan
Don’t let a less than perfect credit score stop you from getting the motorcycle or vehicle you want. Read “How to Rebuild and Improve Your Credit Score,”
for valuable tips on improving your credit.
Check Your Credit Score:
Here are Tips to Get a Motorcycle Loan with Bad Credit:
All lenders will look at your credit before offering you a loan. Knowing your credit score before you speak to lenders will tell you where you stand. While there’s no minimum score requirement for a loan, the higher your score, the better loan terms you’ll be offered. Under federal law, you are entitled to a free copy of your credit report once every 12 months from each Credit Reporting Agency (also called a Credit Bureau). To request your credit report visit www.AnnualCreditReport.com.
Take Steps to Improve Your Credit:
There are ways you can start to improve your credit right away, like paying bills on-time, and paying down or paying-off credit card debt. For more tips read, “How to Rebuild and Improve Your Credit Score
” and “Eight Tips for Building Credit
Create a Budget:
Do you already have a monthly car payment, rent or mortgage payment, or other monthly debt that you pay? Add up your monthly bills and subtract your total outgoing payments from your monthly income to see how much you can afford to pay monthly for a motorcycle loan. You may find that you need to pay-down your current bills and debt in order to take on a new loan. It’s never a good idea to risk not being able to pay your monthly bills. Everyone should have saved at least six months of emergency funds saved up in case of a job loss. If you can’t afford to take on new debt, it’s time to save for a down payment.
Save for a Down Payment:
Having a down payment saved for any major purchase that requires use of a loan to complete the purchase is a smart idea. The larger the down payment you are able to make toward the purchase of the motorcycle, the less money you’ll need to borrow, the lower your monthly payments will be, and the more money you’ll save on interest over the life of the loan.
Consider a Co-signer:
Applying for a loan with a co-signer means both parties will share the responsibility of the debt. If you have bad credit, a co-signer will make getting a loan easier because the lender knows that if the primary signer isn’t able to make the loan payment, the co-signer will be responsible for paying. The co-signer should be fully aware that, because the debt is in their name too, they are responsible for repaying the loan or debt balance should the primary signer default.
Shop Different Lenders:
Credit unions, banks, motorcycle dealerships with in-house lenders, online lenders, and manufacturers will all offer different interest rates, even if the rate varies by just a few points. You’ll also need to decide on the term (length) of the loan that works best for you. Once you decide on the make and model of the bike you want, you’ll be able to shop with more confidence. After speaking to your current financial institution and a few dealers, you’ll see which loan will get you the bike you want at a rate and monthly payment you can afford.
Before you shop, it’s a good idea to check with the financial institution where you already do your banking to see if they offer a motorcycle loan and what rate is available to you. Getting a motorcycle loan preapproval will give you an estimate of how much money you can borrow and your monthly payments. Having this information will make shopping easier.
Where to Get Bad Credit Motorcycle Financing
Shopping for a motorcycle loan is much like shopping for an auto loan. We recommend starting with the financial institutions where you already have a checking or savings account, as there may be special interest rate and term promotions available to you through your current banking relationship.
Many, but not all banks offer motorcycle financing loans, though they may have higher rates than dealerships and credit unions. If you have an account at a bank, ask if they offer this type of loan and what the rate and terms are.
Loan interest rates are typically lower at credit unions than traditional banks. Credit Unions are non-profit organizations that reinvest their earnings into Member discounts, which means more savings for you.
These days it’s easy to find online lenders
who offer financing for new and used motorcycles. Some online lenders also offer loan refinancing.
Dealership financing can be convenient, but be sure to compare rates. Like auto dealerships, each motorcycle dealership will have different promotional offers. While a dealership may be a more convenient resource for getting a loan, the interest rates could be higher if the dealer adds fees to the rate quote provided by their in-house or affiliated lender.
Only two motorcycle manufacturers offer purchase loan financing directly from the manufacturer, these are Harley Davidson
will direct you to a dealership where financing can be obtained. Kawasaki
offers financing though a partnership with several different lenders.
Other Financing Options
If the above financing options aren’t available to you, there are other financing options available.
Credit unions and banks offer personal loans that give you money to be used for any purpose. While these loans may come with a higher interest rate than a motorcycle loan, it may be easier to qualify if you have bad credit. As part of the application process the lender will still look at your credit history and credit score, as well as your income and debt. CU SoCal offers several personal loan options
A Home Equity Line of Credit (HELCO) is a financing option available to people who own their own home. A CU SoCal offers a HELOC
that is a revolving line of credit that operates similarly to a credit card. You’re able to tap into it as needed by simply writing a check or transferring funds to another account. Using a HELOC requires that your home be used as collateral, so in the event you cannot repay the loan, the lender can put a lien on the home and in a worst case scenario you could lose the home for non-payment of the loan.
CU SoCal Motorcycle Financing
Credit Union of Southern California offers motorcycle loans to its Members. Loan features include:
- Up to 100% financing
- 84 month Maximum loan term for new and used motorcycle loans
- Fixed-rate financing
- No pre-payment penalty
- No loan application fee
- Quick pre-approvals and funding
Why Savvy Consumers Choose CU SoCal
For over 60 years, Credit Union of Southern California has been proudly serving the Southern California community. We provide our Members with checking and savings accounts, personal loans, auto loans, and other loan products with quick pre-approvals, no application or funding fees, and other unique advantages.
We are known throughout the area for our excellent Member service and we are proud to be serving the community where we work and live.
Apply for a CU SoCal Motorcycle Loan Today!
Please give us a call today at 866.287.6225 to schedule a no-obligation consultation with one of our vehicle loan representatives.
Get Started on Your Motorcycle Loan!