Auto Loan
Best Motorcycle Loans in May 2023
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Key Takeaways
A motorcycle loan might be a good option if you're thinking about buying a bike, whether it's brand new or used. If you qualify, low-interest financing from a motorcycle manufacturer may be a great prospect.
Although you can apply for a loan via a bank, a credit union, or an internet lender. Luckily, various types of motorcycle loans are available for new and old bikes. But the terms and interest rates each lender offers vary depending on your credit history.
The lender can take possession of your motorcycle in the event of nonpayment with a secured loan. This is not the case with an unsecured loan. With the right amount of research, you can get the best motorcycle loan with the lowest interest rate possible.
Some financial institutions, including banks, credit unions, and internet lenders, provide specialized motorcycle loans. They can be secured or unsecured, with unsecured loans often having higher interest rates. There are motorcycle loans that have strict requirements, such as requiring you to buy a brand-new bike rather than a used one.
Factors that can affect a motorcycle loan:
The process is just as any other auto loan you would apply for. After getting approved for a loan, you'll have to start paying it back right away with interest.
The only cost associated with a standard motorcycle loan is the interest. Annual percentage rates (APRs) can vary widely for each lender, with your credit history significantly determining which lender offers you the best APR. Individuals with poor credit histories may be required to pay annual percentage rates of 10% or higher.
Things may be different, if you opted a personal loan instead of a motorcycle loan. Personal loans for the purchase of a motorcycle may incur different fees, which are calculated as a percentage of the loan's total value. Personal loans typically have more expensive interest rates than motorcycle loans. Before applying for a loan, it is important that you read the application and terms thoroughly to learn about any potential fees.
| Lender | Estimated APR | Loan
amount |
Minimum
credit score |
|---|---|---|---|
| SoFi | 8.99-29.99% | $5,000 - $100,000 | None |
| LightStream | 6.94-29% | $5,000 - $100,000 | 700 |
| Upgrade | 7.99-35.99% | $1,000 - $50,000 | 600 |
| Upstart | 6.70-35.99% | $1,000 - $50,000 | 620 |
| PenFed Credit Union (Personal Loan) | 8.99-17.99% | $600 - $50,000 | 700 |
| Discover | 7.99-24.99% | $500 - $50,000 | 660 |
| Year | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | Prior to 2016 |
|---|---|---|---|---|---|---|---|
| APR% as low as (For up to 36 months) | 3.99% | 5.09% | 5.09% | 5.09% | 6.19% | 6.19% | 6.99% |
| APR% as low as (For up to 48 months) | 4.29% | 5.39% | 5.39% | 5.39% | 6.49% | 6.49% | Not Available |
| APR% as low as (For up to 60 months) | 4.29% | 5.39% | 5.39% | 5.39% | 6.49% | 6.49% | 7.99% |
| APR% as low as (For up to 66 months) | 4.79% | 5.89% | 5.89% | 5.89% | 6.99% | 6.99% | Not Available |
| APR% as low as (For up to 72 months) | 4.89% | 5.99% | 5.99% | 5.99% | 7.09% | 7.09% | Not Available |
| APR% as low as (For up to 84 months) | 5.89% | Not Available | Not Available | Not Available | Not Available | Not Available | Not Available |
Use our loan calculator to see how much will have to borrow and your monthly payments when buying a motorcycle.
Although the process of applying for a new or used motorbike loan is similar to that of a car loan, motorcycle loans operate a little differently.
Your credit report may have errors which impacts your credit score. A higher credit score helps getting a lower interest rate on your motorcycle loan.
Be prepared to provide verification of your income and other personal details. Similarly, give the model, year and the total projected cost of the motorcycle including the accessories (such a helmet and gloves) plus any applicable taxes and levies.
Apply to more than one lender so that you may evaluate each one individually. This makes getting a motorcycle loan comparatively easier.
Yes, certainly. One might receive a loan for a brand new or used motorcycle. Although, there will be a significant interest rate difference for financing a used motorcycle over a brand new one. APRs for used motorcycle loans are often higher than those for newer motorcycles.
Only the most recent models are eligible for financing from some brands. Yet some manufacturers, such as Harley-Davidson, provide unique financing options for pre-owned motorcycles.
You may get a motorbike loan or a personal loan for a used bike if you don't qualify for manufacturer financing and want to shop around for the best interest rate. Loans for used motorcycles are frequently provided on a no-collateral basis.
An outstanding credit rating is a prerequisite for the lowest interest rates. Borrowing money for a motorcycle is still doable even with a credit score as low as 600. However, you should know that the interest rate on your loan will be greater. Assuming you also fulfill the other requirements, you should expect your APR to go down if your credit score is anywhere between 670 and 850.
To get approved for a motorbike loan with reasonable interest rates, you need have decent to exceptional credit.
It is possible to get a motorcycle loan with bad credit. Here is what you should do.
Secured loans are common in banks and credit unions when you use your motorcycle as a collateral. This makes the interest rates lower, consequently making secured loans, those with lower interest rates.
Unsecured loans don't need collateral but instead look at your credit history and score. However, the interest rates can be higher as there is no collateral involved. Online lenders encourage unsecured loans, and they provide pre-qualification tools that show you a loan's potential amount, rate, and duration before actually pulling your credit.
When compared to the rates of both unsecured and secured motorcycle loans, the financing options provided by some motorcycle manufacturers are more attractive. Harley Davidson is considered to be one among the crème de la crème of motorcycles. And it can get expensive. For instance, at local Harley Davidson dealerships, you can inquire about available financing options. The company claims that financing rates for brand new motorcycles begin around 4% for a period of seven years.
Listed below are some of the most important aspects to consider when comparing motorcycle loans:
Lender requirements
Most lenders will base their decision to lend money to you and their interest rate on two main metrics: your credit score and your debt-to-income ratio. While some loan companies won't work with applicants with poor credit, others will. To some extent, the collateral backing a secured loan might make getting approved for the loan simpler than applying for an unsecured loan.
Annual percentage rate
The APR of a loan includes the interest rate as well as any other expenses. Many unsecured personal loans have interest rates between 6% and 36%; secured motorbike loans may have lower initial rates. In most cases, it makes sense to go with whatever loan has the lowest interest rate.
Repayment terms
Unsecured loans typically have a payback period anywhere from two to seven years, however the terms offered by individual lenders may vary. The interest you pay during the life of the loan is directly proportional to the length of time it takes to repay the principal. Make use of a loan calculator to determine a possible interest rate and monthly payment considering your credit history.
Other loan features
Different loans with similar interest rates may be differentiated by additional terms and conditions. It's possible to find a lender who will fund your loan the following business day and provide you with access to your credit score. Or provide you with a mobile app to oversee your finances. The lowest interest rate is still the most important factor, but these extras may make taking out and paying back the loan much less of a hassle.
A majority of the best motorcycle loan companies we researched offers financing on both new and used motorcycles for up to five years at competitive interest rates. Although you should consider the interest rates, loan amounts, payback periods, down payment requirements, and minimum credit scores offered by each lender. This can help you to narrow down the possibilities and get to the best options. You can use our loan calculator to get a better financial understanding.
A motorcycle loan might be a good option if you use a motorcycle almost daily. Motorcycle loan monthly payments might be difficult to juggle, so, if possible, try to pay cash for your purchase Motorcycles are often more affordable than cars, yet be expensive. Always look for the lowest possible rate with the shortest possible loan term.
There are a few significant distinctions between motorcycle financing and auto financing. Loans for motorcycles, are not always secured like auto loans. Additionally, the interest rates on unsecured motorcycle loans are often greater than those on secured loans because of the additional risk involved for the lender.
The lowest quoted interest rates include a 0.50% reduction for automated payments. And cover street bikes with a rate range of 6.00% to 6.75%. Interest rates for off-road bikes are higher, ranging from 9.60% to 10.10%.
The interest rates on motorcycle loans are an obvious target for criticism. Not in the long run, anyhow. Motorcycle loans are still available for 6.99-8.99% APR for those with good credit. That's not terrible, but inflation means prices remain high. And the motorcycle's retail price will also be reduced.
There is no particular best lender to finance your motorcycle loan. It depends on your requirements. For unsecured motorcycle loans, SoFi is the best. It’s LightStream, if you are looking for low rates. Upgrade and Upstart are some options if you have bad credit. But on an overall basis, Digital Federal Credit Union (DCU) is a decent option.
As a matter of fact, you can get a motorbike loan from many of the same places you can get a car loan, including banks, credit unions, online lenders, and motorcycle manufacturers themselves. Although not all vehicle loan companies can finance a motorbike, there are still several possibilities for consumers with varying credit ratings.
You should acquire a motorcycle loan from a lender that offers the best combination of cheap interest rate and flexible repayment options. Starting with a local credit union is a smart idea because of the cheaper rates and perhaps less onerous regulations.
Motorcycle loan rates are typically higher than auto loan rates as motorcycles may have a higher default rate than cars. A good rate for a motorcycle loan falls between 6% and 10%.