Motorcycle loans are similar to car loans, meaning the procedure involves the same steps. In more exact terms, as a borrower, you can opt for a secured or unsecured loan, taking into account whether you intend on using your motorbike as a guarantee or not. Moreover, you can choose from loan terms varying from one to seven years. This particular aspect depends on the lender. For instance, some lenders might agree on approving motorbike loans of up to $80.000.
Is a motorbike loan the right choice for me?
The fact is that, before you decide on a particular motorbike loan, it is recommendable you compare the alternatives you have available. Thus, consider the following tips when comparing motorbike loans.
The loan amount
The majority of lenders will typically establish a minimum and maximum loan amount. Thus, it is best to be sure that the lender will allow you to borrow the amount of money you actually require for purchasing your motorbike. This particular aspect is determined whether you choose to opt for a secured or an unsecured motorbike loan.
The term of the loan
The term of the loan embodies the amount of time you take the loan for. Once again, this can vary depending on the lender. If you opt for a fixed motorbike loan, the length of the loan will be between one and five years. On the other hand, variable rates encompass loans that last up to seven years.
Secured vs. unsecured motorbike loan
A secured loan means that you provide your motorbike or any other personal asset as a guarantee, in worst case scenario you default the loan. Meanwhile, an unsecured motorbike loan doesn’t encompass this guarantee. Each of these options presents its own set of benefits and side effects. Thus, it’s best you do your research before making your decision.
Interest rate options
The interest rate on the loan has a significant influence on the amount of loan. You have two options: fixed or variable interest rate. A fixed rate will remain the same throughout the entire duration of the loan while a variable rate is subject to a range of financial fluctuations that are bound to take place. See which one works best for you.
A wide range of lenders may charge the borrower with a bunch of additional fees such as ongoing and upfront fees. These are supposed to set up the loan and cover the costs of administrating your loan account. It is important you discuss this aspect with your lender so that you can get a bigger picture of the real cost of the loan.
The possibility of making extra repayments
One obvious method of decreasing the life of the loan is by making extra repayments, if your financial situation permits it, of course. If you anticipate that you will be able to make additional repayments throughout the duration of the loan, discuss this aspect with your loan provider and make sure this option will be available to you.