Motorcycle loan calculator

What is a motorcycle loan?

Motorcycle loans are a type of personal vehicle loans that are usually secured. This means that the motorcycle (new or used) purchased with the loan funds is used as collateral and becomes your property after the loan is repaid in full. The lender uses the collateral to reduce the credit risk and motivate the borrower to service the loan properly; otherwise, the property used as collateral may be sold back to pay the loan and foreclosure costs.

The terms of such loans depend not only on the lender but also on the borrower's creditworthiness. The higher the credit score, the better the terms, as a rule.

Before applying for a loan, make sure you know what you expect from your future vehicle. This includes determining the type of motorcycle. There are quite a few of them, and each has its characteristics.

• The street motorcycle is also an adventure motorcycle known for its ability to go fast on rocky surfaces and endure resistance and jumps. It is considered the golden mean between classic motorcycles and adventure bikes, as it has some space to store bags for trips and enjoy the roads, wind, and speed.

• The chopper motorcycle became iconic in the 1950s and is still popular. You know it from movies, TV, posters, and ads. It looks and feels extreme, thanks to the modified steering angle. This model is a chopped original motorcycle, hence the name of this model in the market. But the design of the chopper has influenced another brand: Harley Davidson. It is associated with travel, masculine power, and high-speed adventures.

• The cruiser motorcycle is designed for medium and low-speed rides for those who love comfort. This model is also suitable for long distances and road trips. Styles are different, of course, but the comfortably reclined seating position is the common feature. Usually, the seat is not high but padded. The seating position allows a good view.

• The Power Cruiser is designed for sporty driving and has incredible horsepower, powerful brakes, and suspension. In addition, the design allows you to feel the speed.

• Off-road motorcycles are not afraid of dirt roads, wild curves, and rough terrain. It can even take you to the mountains if you have enough power. This motorcycle is your companion for adventure.

• Enduro Bikes is a strong sports bike for the Enduro Championship with its tough challenges. First, it has stability for tricks, but it takes skills to make the most of this model. The second name of these motorcycles is endurance because they can travel long distances and have a large gas tank. But a big engine can cause one to be less maneuverable.

• Motocross motorcycles are somewhat similar to enduro motorcycles. However, these models are designed for sporting competitions where the goal is to do tricks, jumps, and tricky turns and stay on the track.

• We often see naked motorcycles on the roads. They have an upright rider position (unlike sport and traveling models). Usually, they do not have a windshield. Such models are a good solution for beginners and those not ready to invest large sums in buying and maintaining a motorcycle.

• Motor scooters are not taken seriously by some motorcycle enthusiasts. Still, they are a practical, reasonably fast way to get where you want to go within the speed limit in the city. Popular with men and women, scooters take up little space and are sold at affordable purchase and maintenance costs.
  If you are serious about clean energy and independence from gasoline, you can try an electric scooter and run it on electricity from a socket.

• If you want to travel long distances on your motorcycle, you should choose a model with good balance, a large tank, and plenty of storage space for things you need on the road. Such criteria apply to touring motorcycles.

Harley motorcycles belong to the chopper group but are always mentioned separately because their longevity has made them iconic. Moreover, spare parts are available, which is essential for maintenance, rather than buying new ones in case of damage.

The purchase of a motorcycle should be weighed based on market research and considering the following factors:

• riding experience;

• intended use (reaching places in the city, sports, travel, etc.)

• budget;

• preference for a new or used motorcycle;

• available space for storage.

When it comes to purchasing your motorcycle, one of the milestones is financing. If you have been planning the purchase for some time and have money saved up, you can either pay the entire amount in cash or make a good down payment.

If you pay cash, you will have a wide range of dealers to choose from because even though vehicle loans are a prevalent tool to make your dream come true, some dealers prefer cash or are willing to offer better terms if they receive a cash payment. Also, you would need to go through a credit check, and no approval process is required. The choice of dealer and preferred model is 100% up to you.

If your financial savings are insufficient to pay for the motorcycle model you want fully, you can apply for financing. Still, you must have a stable income to service the loan (this does not depend on the type of lender or loan product, as the money borrowed must be repaid anyway, and if it is not, you will always face consequences that are more expensive than the usual interest rates).

If you are thinking about a motorcycle loan, then there are such advantages as:

• you can use your purchase immediately, instead of waiting until you have saved the total amount to buy it yourself;

• you can pay small installments within the chosen payment term and credit period;

• when you repay the loan, you do not have to worry about losing it through repayment;

• your financial future in connection with the repayment of the loan is secured if you have taken out insurance against loss of job, life insurance, etc. (check directly with the lender for the list of required insurances).

And as always, there are some drawbacks to being a borrower:

• you would have another item in your current expenses until the loan is paid off;

• if you bought the motorcycle with a loan and not a personal loan, you are not the owner until you have repaid the loan in full;

• if you default on payments, the lender may charge higher fees, depending on the terms of your loan agreement and your willingness to cooperate and find solutions;

• there could be additional fees for registering the title (check the previous owner's title if you are buying a used motorcycle), appraising the used motorcycle, and preparing the legal documents to secure the loan;

• you'll have to wait for credit approval, and in some cases, if it does not happen quickly, you risk losing a good deal;

• the total cost of the loan includes title transfer fees,

• if your credit score is less than excellent and good, you should be prepared to pay higher interest rates on loan or work with lenders who are not focused only on excellent and good credit.

As always, when you apply for a loan, especially when you sign a loan agreement, remember that it is your responsibility to repay the loan and service it well. The market is full of different offers, but you need to find the one that suits your financial situation (bearable monthly loan payment, convenient down payment, competitive interest rate) so that the loan is easy to use and you can enjoy your purchase.

If you have such a possibility, take advantage of good investment advice. It will help you estimate all related expenses, non-taxable fees, and direct financing options, get detailed calculation results, choose a fixed or floating rate and loan terms, and understand your illustrative purposes. Only person-to-person work with the consultant gives personalized advice and fully calculated values with no additional fees.

Types of motorcycle loans

If we were to categorize motorcycle loans, they could vary by lender:

• bank;

• credit union;

• other financial institutions;

• dealer.

By type of motorcycle loan rates:

• fixed interest rate;

• variable interest rate.

By type of loan product used to finance your purchase:

• vehicle or motorcycle loan;

• personal loan;

• credit card funds;

• leasing;

By loan term:

• short-term;

• medium-term;

• long-term.

By type of collateralization of the loan:

• collateralized (where a property or other asset is provided as collateral);

• unsecured (no collateral is required, making it a less risky but usually more expensive financing product for the borrower).

There are also loans whose approval depends on a credit check, and those that do not require a credit check, the free credit score (or where any credit score is considered, including a zero).

And there is at least one more category to mention:

• financing a new motorcycle;

• credit for a used motorcycle;

• options with trade-ins principal balances;

As you can see, there are many categories and offers on the market. Therefore, there are many factors to analyze before you commit to the terms of a loan agreement. If you have a financial advisor, you should discuss financing options with them to professionally explore the big picture. For instance, calculating sales tax may be tricky, as well as the actual interest rate, including fees and total after-tax price. On the other hand, suppose you are relying on your own experience. In that case, you should take the time to determine your priorities, review your loan repayment and servicing options and market options and consider how they affect the total purchase price you can afford the amount of principal payments. Then you can choose the loan product that works best for you as a binding financing agreement. Do not forget to calculate the amount of cash you need, tax amounts, and other fees associated with the deal. Make a preliminary complete amortization schedule showing how payment affects your budget. Correct estimation would save you from making the mistake of too high a loan amount with unbearable monthly payments.

Why do you need a motorcycle loan calculator?

The motorcycle loan calculator is needed for information purposes. It allows you to visualize the numbers and the impact of taking out a loan on your personal or family budget. It helps you save time because if you make manual calculations and make a mistake, it would take longer to correct it. With the online calculator, all the formulas are already there. You just need to enter the correct data and compare the results.

Such calculators work around the clock, unlike some lenders' offices, and you can make estimates whenever it suits you.

You can check if you have enough cash for your expenses and test different repayment plans and the loan term. Most importantly, all these things can and should be done before you commit to the lender. You will get a clear picture of the amount available for your living expenses and your constant and variable expenses. It may be a red light or a green light, but you will understand if your expectations are realistic.

Another benefit of the loan calculator is that by choosing the right loan, you can protect yourself from future credit problems, at least to the extent that you can predict your financial future based on the information available to you now.

If you do not have a financial advisor, you can use a calculator to gain some new insights and implement new approaches to your financial planning.

Summarizing benefits of using a motorcycle loan calculator:

• you easily understand acceptable motorcycle purchase prices;

• total cost;

• annual percentage rate;

• easy calculating sales tax;

• monthly payment estimation;

• trade total loan balance, etc.

Note: A loan calculator is not intended to replace the professional services of accountants, investment advisors, and loan officers. There is a simple reason: the calculator relies on the data you provide and cannot verify your credit risk or the borrower's profile. In addition, if you have a variable rate contract, accurate modeling with the loan calculator is not entirely possible.

How to calculate motorcycle loan payments

A motorcycle loan calculator works quickly and efficiently. It depends on the functionalities that the lender developed for its online calculator. On average, you would be requested to provide the following information before you see your loan payments:

• price of the motorcycle;

• loan term;

• interest rate;

• down payment amount;

• sales tax (it can be optional whether to add tax amount into the loan).

In a few seconds after clicking the "calculate" button, you will get the results:

• affordable loan amount;

• monthly payment;

• sales tax;

• total loan cost.

You can print the results and see the formed table, graph, and preliminary payment schedule.

Some financial calculators offered by lenders allow for calculation for payment or based on expected motorcycle price.

More advanced financial calculators allow to:

• choose the type of motorcycle;

• desired accessories (tall windscreen, air reflector, backrest for rider and the passenger, etc.);

• model year;

• province;

• repayment frequency;

• expenses on other loans.

You can get as many calculations as you need to see multiple scenarios and make an appointment with the loan officer of the preferred lender.

How to compare motorcycle loans using a calculator

You need to know how much cash is available, the extra expenses you can afford, the cost of your motorcycle, or the model of motorcycle you want from the seller.

When you enter the data into the loan calculator, you can change the loan amount, interest rate, payment frequency, and trade-in value and see the results.

Remember that you can play around with entering different interest rates, but the lender will only confirm a realistic interest rate for your credit score. For this reason, loan calculators never imply a commitment by the lender to pay out the loan on the terms you entered for your preliminary calculations.

If you want to compare different loan products, you can do so on the lender's website. If you want to compare the terms and loan costs of different lenders, it would be a good idea to do the calculations on their official websites or through a trusted loan aggregator that can compare different financing options. Make sure that the terms and conditions of the lenders are up to date because the terms and conditions can change from time to time, and the latest information should be available on the lender's website.