How to Finance a Motorcycle in 8 East Steps
If you’re looking to hit the open road in a brand new motorcycle, there are some important steps you should take before making your purchase, like creating a budget and getting preapproved.
While a low-end motorcycle can be relatively inexpensive $3,000 - $6,000, a high-end bike could cost $20,000 and up. Either way, you’ll likely need to apply for a motorcycle loan. In this article we’ll cover how to finance a motorcycle.
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 is the lower your interest rate will be; therefore, it’s best to ensure that your credit score is in the best possible shape beforehand.
Before you shop, it’s also a good idea to check with the financial institution where you already do your banking to see if they offer motorcycle loans.
Getting a motorcycle loan preapproval will give you an estimate of how much money you can borrow and what your monthly payment will be. Having this information will make shopping easier.
Motorcycle Financing Guide
CU SoCal is a leading lender for those looking for motorcycle financing. Here are 8 easy steps for getting on the road to motorcycle ownership:
Check Your Credit Score:
All lenders will look at your credit before offering you a loan. 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.
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 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 financing is a smart idea. The larger the down payment, 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.
Comparison Shop Different Motorcycles:
You may already know the make and model motorcycle you want to purchase and have an approximate cost, which makes price shopping easier. If you’re not sure which bike is for you, take the time to explore your options and test-drive various models.
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 and more of the details will fall into place. After speaking to your current financial institution, and a few dealers, you’ll be able to see which loan will get you the bike you want at a rate and monthly payment you can afford.
Motorcycle loan preapproval from a lender gives you the interest rate, payment term, and loan amount you’ll likely be approved for. This will help you shop with confidence. Getting preapproved is easy. You’ll provide the lender with your identification, social security number, and proof of income. The lender will likely do a “soft pull” of your credit to see your credit score, and use this information to provide you with an estimated interest rate and loan amount. Even with a preapproval you will still need to be approved for the loan in order to make the purchase.
Calculate Your Payments:
With a purchase price in mind, estimated interest rate, and a loan term in hand, you can use the CU SoCal Vehicle Loan Calculator
to calculate your monthly payments.
Make the Purchase:
Now that you’ve been shopping and comparing your options and the financing you’ll need, you’re ready to make your purchase. Congratulations!
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.
Where Can You Get 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.
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, vehicle 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.
APPLY FOR A MOTORCYCLE LOAN TODAY!