What are Motorcycle Loans?
Motorcycle loans are specialty loans or personal loans used to finance the purchase of a motorcycle or ATV. It is similar to a car loan – you apply for the loan, the lender extends funding, and you pay back in monthly installments with interest. However, the loan amounts for motorcycle loans are typically more minor compared to cars, trucks, or other vehicles.
Motorcycle financing, as motorcycle loans are sometimes called, is usually offered by some banks, credit unions, and online lenders. Depending on the lender, they can either be secured or unsecured, but unsecured motorcycle loans tend to have higher interest rates than secured ones.
So whether you seek to buy a brand new or used motorcycle, fund the manufacture of a custom bike, or perhaps you're simply looking to finance an antique or classic motorcycle restoration, a motorcycle loan can provide you with the financing you need.
What Is The Minimum Credit Score For A Motorcycle Loan?
Motorcycle loans generally do not have a fixed standard credit score, but they require you to have good to excellent credit scores to qualify for one with the best rates. According to Equifax – one of the three major credit bureaus, good credit scores range between 670 and 850. The following range of values will help you understand credit scores better:
- 800 to 850: Excellent credit
- 740 to 799: Very good credit
- 670 to 739: Good credit
- 580 to 669: Fair credit
- 300 to 579: Poor credit
A good FICO Score – the most popular credit scoring lenders use – ranges from 670 to 739. While a good VantageScore – another popular credit scoring created by Experian, TransUnion, and Equifax, the three national credit bureaus – ranges from 601 to 660. Lenders typically reserve the lowest interest rates and most favorable loan terms for people with very good to excellent credit, so endeavor to improve your record first before applying.
How to Get a Motorcycle Loan With Bad Credit?
To better your chances of getting bad credit motorcycle financing, here are some steps you should take:
- Know Your Credit Score
You're entitled to a free copy of your annual credit report from the three national credit bureaus – Experian, TransUnion, and Equifax. Check for your credit score in your credit report to have the correct information to use in your applications. Some lenders also perform a pre-qualification process to confirm your eligibility based on your credit score.
- Ensure That You Can Afford The Loan Repayments
Make an honest evaluation of yourself about how much you can afford to spend on a motorcycle and the loan amount you can afford to repay. Your income and budget must reflect your ability to meet up with the monthly amortizations. Anything short of that potentially puts you at risk of defaulting or debt.
Compare Loan Rates From Multiple Lenders
It's easy to want to settle for the first lender you see on Google but don't. Instead, cross-examine other providers and the rates they offer. Do your due diligence by reading the fine print, especially their interest rate, repayment terms, and reviews from past borrowers. You can apply for a motorcycle loan via our website at WeLoans.
- Be Wary of Bad-Credit Loan Scams
Many people will want to exploit your desire to get funding even with bad credit, so tread with caution when searching online. Some of such people include:
- Lenders that require you to pay upfront fees, which should have been deducted from the loan amount
- Lenders that don't have a Federal Trade Commission registration in your state
- Lenders that have an unsecured website
- Lenders that don't have a physical office address
- Build Your Credit Rating First
Getting your dream bike through motorcycle financing with bad credit might not come easy but working on rebuilding your credit history first will undoubtedly increase your chances. It may take a while, but you'll enjoy better loan terms with an improved rating.
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Bad Credit Motorcycle Lenders
Bad credit motorcycle financing costs more, but they are readily available from banks, credit unions and online lenders. Lenders that extend motorcycle financing with bad credit often charge exorbitant interest rates and fees. If you're in this situation, you must do your due diligence and compare rates to find a lender with favorable terms before signing any agreements.
To help you narrow your search, we researched some of the top bad credit motorcycle financing companies. We selected the best ones based on their interest rates, credit scores, available loan amounts, repayment terms, and necessary down payment requirements.
The motorcycle financing companies listed below are willing to work with bad-credit borrowers and offer some of the lowest starting APRs.
- Consumers Credit Union: offers new and used motorcycle loans with terms up to 60 months (five years), with APR offers starting at 4.90%. Requires a one-time payment to join as well as a $5 donation to the Consumers Cooperative Association and a minimum balance of $5 in your account.
- USAA: caters primarily to members of the military. You must be a U.S. military member, veteran, pre-commissioned officer or a spouse or offspring of one to get a loan with this lender. Their loans start at 5.49% APR for up to 72 months (six years).
- PenFed Credit Union: Pentagon Federal Credit Union is an open-charter organization and has one of the most laid-back membership requirements. They offer bad credit motorcycle loans starting at 5.99% APR for up to 60 months. Interested members must have a Social Security number or Tax Identification number and leave a minimum balance of $5 in their PenFed account.
- Motorcycle Lender: is a popular online motorcycle financing company that offers bad credit motorcycle loans starting at 6.99% APR for 36 to 60 months. They can also help you find no credit check motorcycle financing company near you.
Can I Get a Loan for a Used Motorcycle?
Most motorcycle manufacturers only offer to finance new models of motorcycles, but brands like Harley-Davidson offer special financing for both new and used motorcycles. You can also readily find motorcycle loans and personal loans for used motorcycles if you're not eligible for manufacture financing or want to compare rates from other lenders.
Used motorcycle loans tend to be unsecured, so lenders typically charge higher interest rates and lower loan maximums. You will also receive cash upfront without having to put up your motorcycle's title as security for the loan. Simply apply for the loan and get the funds deposited directly into your linked banking account within two days.
What to Do if You Can't Get Bad Credit Motorcycle Financing?
If you're unable to get a bad credit motorcycle financing, you can try any of the following:
- Pay with cash: if you're holding cash, you can go for a low-budget, used bike. You should be able to get a good used bike for less than $2,000, depending on where you live.
- Improve your credit: a low credit score is a no-no if you want to obtain a bad credit motorcycle loan. Carefully assess your credit report, dispute any false information and work towards building it up.
- Get a cosigner: a cosigner is someone with good credit who promises to take responsibility for payments if you're unable. Be careful, though, because your cosigner will be legally responsible for the debt, and any delay in repayments will adversely affect both of your credit scores.
- Tackle your debt: consult with relevant authorities like the National Foundation for Credit Counseling to help you initiate a battle plan to tackle your debt and create a realistic budget.