Bike Loans - Low, Fixed Rate Bicycle Financing in 2023

A motorcycle loan is a type of financial arrangement that allows individuals to purchase a motorcycle by borrowing money from a lender. These loans are specifically designed to fund the purchase of motorcycles, including new or used bikes. The average motorcycle with low mileage costs anywhere from $3,000 to $6,000, with luxury bikes costing even more, according to J.D. Power. If you have dreams of buying your first or next bike but don’t have the cash to pay outright, a motorcycle loan could help you make the purchase. Compare the best options below.

Best Bike Loans offers

LightStream provides an attractive option for personal loans, especially if you have a strong credit history. With competitive interest rates and a lack of fees, it's a borrower-friendly choice.

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Pros and cons

Pros

No charges or fees.
Enjoy an interest rate reduction when you sign up for automatic payments.
Home improvement loans offer extended repayment terms.
Benefit from the Rate Beat program and Experience Guarantee.

Cons

The website does not offer a pre-qualification option.
A few years of established credit history are required.
Debt consolidation loans do not facilitate direct payments to creditors.

myAutoloan.com, established in 2003, operates as a direct lending marketplace that serves as an intermediary, gathering loan offers from up to four lenders on behalf of loan applicants.

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Pros and cons

Pros

Pre-qualification Options: Certain lending partners within the network offer pre-qualification using a soft credit check, allowing applicants to gauge their eligibility and potential loan terms without affecting their credit score.
Rate Discounts with Auto Payments: Some network lenders extend rate discounts to borrowers who set up automatic payments, potentially reducing the overall cost of the loan.
No Origination Fees: Applicants benefit from the absence of origination fees, eliminating an additional upfront cost often associated with loans.
Online Application: The platform offers a fully online application process, catering to applicants who prefer the convenience and accessibility of digital submissions.
Co-Borrower or Co-Signer Options: In nearly all cases, myAutoloan.com permits the inclusion of co-borrowers or co-signers, which can enhance eligibility and potentially secure more favorable loan terms.

Cons

Limited Geographic Availability: The service is not available to residents of Hawaii or Alaska, limiting access for individuals residing in these states.
Weekend Customer Service: Customer service is not accessible on weekends, which may inconvenience applicants or borrowers seeking assistance during these days.
Lack of Spanish Website: The platform does not provide a Spanish-language version of its website, potentially excluding Spanish-speaking individuals or those more comfortable navigating in Spanish.

PenFed's car buying service enables applicants to find a car online, request member pricing from a dealer, apply for financing online, receive approval, and then visit the dealership.

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Pros and cons

Pros

Multiple Pre-Qualified Offers: PenFed offers up to six pre-qualified loan options, each specifying the interest rate and payment amount for various loan terms. These pre-qualified offers are determined through a soft credit check.
Rate and Offer Consistency: The pre-qualified loan terms provided by PenFed remain consistent throughout the preapproval and approval stages, unless there are changes to the selected vehicle.
Online Car Buying Service: PenFed provides an online car buying service that streamlines the process of finding, financing, and purchasing a vehicle. This service may also offer potential rate reductions or cash bonuses.
Convenient Online Application: Borrowers can complete the entire loan application process online, from submission to document upload.
Seven-Day Customer Service: PenFed offers customer service assistance seven days a week, providing support when needed.

Cons

Credit Union Membership Required: To obtain a PenFed auto loan, individuals must be members of the credit union. Although membership is accessible, it is still a prerequisite.
No Automatic Payment Rate Discounts: PenFed does not offer rate discounts for borrowers who set up automatic payments, which some other lenders provide as an incentive for automatic payment scheduling.
Initial Application Requires Social Security Number: Applicants are required to provide their Social Security number as part of the initial application process, which may be considered sensitive information by some individuals.

Follow the tips below before borrowing:

Pay attention to annual percentage rates (APRs). A loan’s APR is a percentage that expresses how much you will pay annually on interest and fees. You can use a loan’s APR to calculate the cost of borrowing over time. This is an important factor to compare between loans.
Explore loan options before going to a dealer. Financing offered by a motorcycle dealership can come with an increased interest rate that’s higher than what you might get if you borrow money directly from a personal loan. Before visiting a dealership, check other loan rates because this will help you determine if dealer financing is the best option.
Watch out for add-ons and fine print. Dealers and lenders may offer extended warranties or charge miscellaneous fees like prepayment penalties if you pay off your motorcycle loan early. Reading carefully through the terms and fees of each loan can help you find hidden fees and pinpoint the most affordable deal.
Prequalify if you can. Many lenders now let you prequalify for loans without a hard credit inquiry, so you can check rates and compare costs without taking a credit hit.

FAQ

What Is a Motorcycle Loan?

A motorcycle loan is a type of installment loan that credit unions, banks or online lenders may offer. In some cases, financial institutions provide loans specifically for motorcycles, or you can use a personal loan to buy your bike. Aside from banks and credit unions, dealerships and manufacturers offer their own motorcycle financing options. For example, Harley Davidson provides financing for both new and used bikes, while Ducati provides flexible financing solely for new bikes.

How Do Motorcycle Loans Work?

Motorcycle loans can be categorized into two main types: secured loans and unsecured loans. Each type has its own characteristics and considerations:

Secured Motorcycle Loans:

Collateral: Secured loans require collateral, which in this case is the motorcycle itself. The motorcycle serves as security for the loan.
Down Payment: Some secured loans may require a down payment upfront, reducing the loan amount and the risk for the lender.
Lower Interest Rates: Secured loans typically offer lower interest rates compared to unsecured loans. The collateral provides assurance to the lender, leading to more favorable terms.
Risk to the Borrower: While secured loans offer advantages such as lower interest rates, borrowers should be aware that if they fail to make payments, the lender can repossess the motorcycle to recoup the loss.
Ownership: In some cases, the lender may hold the title to the motorcycle until the loan is fully repaid.

Unsecured Motorcycle Loans:

No Collateral: Unsecured loans do not require collateral, meaning the motorcycle is not used as security for the loan.
Higher Interest Rates: Due to the absence of collateral, unsecured loans typically come with higher interest rates compared to secured loans.
Credit-Based: Lenders rely more on the borrower's credit history and financial profile to determine eligibility and interest rates for unsecured loans.
No Risk to Ownership: Borrowers retain full ownership of the motorcycle from the beginning, as it is not tied to the loan as collateral.
No Down Payment: Unsecured loans may not require a down payment, but this can vary by lender and creditworthiness.
The choice between secured and unsecured motorcycle loans depends on your individual financial situation, credit history, and risk tolerance. Secured loans often offer better terms but come with the risk of losing the motorcycle if payments are not made. Unsecured loans provide more flexibility but typically involve higher interest rates. It's essential to carefully assess your circumstances and compare loan offers from various lenders to find the most suitable option for your motorcycle financing needs.

How to Get a Bike Loan With Bad Credit?

When you have a less-than-ideal credit history or no credit history at all, securing financing can be more challenging and often comes with higher costs. Lenders that specialize in serving borrowers with subpar credit often impose elevated interest rates, which may border on being predatory. However, there are strategies to enhance your loan options.

One effective approach is applying for a loan with a co-signer who possesses a strong credit profile. This can potentially lead to a more favorable loan offer because there is an additional person providing a guarantee of repayment. It's important to note that when someone co-signs a loan, they become financially responsible for the debt if the primary borrower fails to repay it. Therefore, it's crucial for co-signers to fully comprehend the risks associated with co-signing before committing.

One significant risk is that any late payments or defaults by the primary borrower will appear on the co-signer's credit report. This means that if you, as the primary borrower, miss payments or encounter difficulties with the loan, it can adversely affect your co-signer's credit history as well.

Tips for Comparing Motorcycle Loans

Check Your Credit Score: Start by checking your credit score and credit report. A higher credit score can help you qualify for better loan terms, such as lower interest rates. If your score needs improvement, consider taking steps to boost it before applying for a loan.
Research Lenders: Look for lenders that specialize in motorcycle loans. Compare offerings from banks, credit unions, online lenders, and dealerships. Each may have different terms and interest rates.
Interest Rates: Compare interest rates from multiple lenders. Even a small difference in APR can significantly impact the total cost of the loan. Keep in mind that rates may vary based on your credit score and the age of the motorcycle.
Loan Term: Consider the loan term that best fits your budget and financial goals. Shorter loan terms typically have higher monthly payments but lower overall interest costs. Longer terms result in lower monthly payments but potentially higher interest costs.
Down Payment: Determine the down payment you can afford. A larger down payment reduces the loan amount and can help you secure a better interest rate.
Fees and Charges: Pay attention to any fees associated with the loan, such as origination fees, application fees, or prepayment penalties. These fees can add to the overall cost of the loan.
Fixed vs. Variable Rate: Decide whether you prefer a fixed-rate loan, where the interest rate remains constant throughout the loan term, or a variable-rate loan, which may have a lower initial rate but can fluctuate over time.
Loan Preapproval: Consider getting preapproved for a motorcycle loan. Preapproval provides insight into the loan amount and interest rate you qualify for, making it easier to shop for a motorcycle within your budget.
Loan Terms and Conditions: Read the loan agreement carefully, paying attention to terms and conditions. Understand any requirements, such as insurance coverage, and the consequences of late payments or default.
Additional Benefits: Some lenders offer additional benefits, such as gap insurance, extended warranties, or roadside assistance. Assess whether these extras align with your needs and budget.
Customer Reviews: Research customer reviews and experiences with the lender. A reputable lender with positive reviews can offer peace of mind.
Negotiate: Don't hesitate to negotiate with lenders, especially if you have a strong credit history. You may be able to secure more favorable loan terms through negotiation.

By following these tips and comparing loan offers from multiple sources, you can make an informed decision when selecting a motorcycle loan that suits your needs and financial situation.