You are in the market for a motorcycle and are itching to go find the perfect one. You might already have your eye on a certain model or want to just find one that strikes your fancy at a motorcycle dealership. Before you start the hunt for the perfect bike it is best to get your financial ducks in a row.
Getting a motorcycle loan in a lot of ways is very similar to getting a car loan. The difference is you will find there are fewer financial institutions that are willing to give you their money for this purchase. Even though motorcycle loans are becoming more available some institutions still feel it is a specialty loan.
As with all loans you will want to find out your credit rating. Due to the Fair Credit Reporting Act (FCRA) it is free to check your credit rating at each of the three nationwide consumer credit reporting companies. These companies are Equifax, Experian and TransUnion. If you request your credit report these companies must provide you with a free copy once every 12 months.
With your credit report in hand you can make sure that everything is listed as it should be. If you have credit cards you no longer use listed you might want to call and cancel them so when you go for the loan they will not be able to say you have too much available credit out there. If the credit reports show debits that you have already paid in full, call and get the notice of delinquency taken off of the credit report. Take care of anything that might cause red flag when you go in to get your loan. You want to have the best credit score possible when you try to find your motorcycle loan.
When figuring out what you will need for your loan to figure in the cost of the other items associated with the motorcycle. Will you be able to afford the registration, insurance, maintenance and proper motorcycle gear to wear? This is why you need to get the best loan available to you so that you still have the money to cover these items as well as your loan amount each month.
Shop for a motorcycle within your loan amount or you will be disappointed. This is the reason that you go and find out what motorcycle loan is available to you before you start shopping. You would not want to have your heart set on a $25,000 model when all the financial institution will loan you is $10,000. And do not forget about the extra costs just discussed above.
Another reason to get a motorcycle loan before shopping for the motorcycle is that if you do not you might be talked into using the dealerships financial services. Dealerships on a whole do not give customers good deals on loan rates. Unless your credit is so bad you believe this is the only way you can afford a loan should you walk into the dealership ready to use their finance department.
Special promotional loans are a dealership gimmick. Another way a motorcycle dealership might try to talk you into using their finance department is with special promotions. These promotions might have an excellent rate for the first 12 months but usually the rates go way, way up after that period of time. The salesman is hoping you will be so excited by the motorcycle and the promotional deal that you will not think ahead for the long term.
When discussing a motorcycle loan with a financial institution ask questions about the loan like you would if you were attaining an automobile loan. Ask if the rate is fixed or variable? Would the rate change in the future for any reason? What are the administrative fees associated with this loan? Are there any penalties for paying the loan off early?
A few other questions to also ask could be what would happen when if you are late on a payment? Will the interest rate increase if payment is 30 days late? What about 60 days? You never want to be in this situation but it is important to ask because you never know what the future holds.
If you are unable to find a financial institution in your area with good rates on motorcycle loans a good place to look is on the Internet. It is becoming a popular and easy way to find a motorcycle loan or comparison shop for one.
Many online finance companies no longer require an application fee so you are saving already with this method. Some agencies might require a down payment either but it is always wise to put down some money if at all possible. Online loans have advantage such as usually have a lower APR. Shopping online saves you time because the approval process can be take as little as 15 minutes.
With the online loan application process you do not have to leave your home. Even better yet you will not have to deal with dealership's finance department because you already have your own set up. Dealers use their loan department as an extra way to make money. They know that people that use that department are usually desperate or making a spare of the moment decision and can be milked by the high APR.
Repayment schedules for online loans are usually 12 - 36 months. There are longer ranged loans, up to 72 months in extreme cases. Many finance companies use the simple interest method as a way to calculate your monthly payments. You never want to get a loan with the rule of 78 in which you are paying all the interest first. This will leave you upside down on your payments if you decide to sell the motorcycle before the end of your loan.As mentioned earlier look for a lender that does not have a prepayment penalty. You do not want to be stuck with an extra fee for being able to pay off your bike early.
Other items to keep in mind as you shop for your motorcycle loan are about the lender you are considering using. How is their customer service? Will they be able to help you if you have questions later on? How quick is their loan process and response time? Do you have a choice on how the payments are made? Can you pick the date on which the payment is due? Are they able to do an automatic deduction from your bank account?Will you have access online or on the phone to check on your loan through its pay off?
Getting a motorcycle loan does not have to be a painful process and it can actually be a positive for you. You get the motorcycle of your dreams and are able to build up your credit rating. If you do your research and find the loan best suited for you needs, do not overspend on your motorcycle and pay off the loan on time you are going to be sitting pretty. In the line of having your cake and eating it too you instead are able to have your bike and the money to ride it too.