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Motorcycle loans for december 2022 in the United States

Apply for motorcycle loans from companies verified by our specialists. On 04.12.2022 you have access to 0 car loans with a low rate. Increase your chances of getting money — fill out a multi-application with a free credit rating check.

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Arrowhead Advance
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Olivia H
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Motorcycle loans for december 2022

If you are looking for a new or used motorcycle in the market, you could consider a motorcycle loan to finance your purchase. Motorcycle loans in the United States can run into hundreds of thousands. The most expensive motorcycle can cost as high as $360,000. Therefore, buying your dream motorcycle can have you dig deep into your pockets. At the same time, rentals can be hectic to acquire and maintain. For many motorcycle buyers, the pleasure of long rides on a bike while exploring nature and landscapes is a dream. For that reason, owning a motorcycle is an efficient way to create more time for grand adventures.

What is a motorcycle loan?

A motorcycle loan is considered a specialty kind of loan offered by banks, credit unions, or online lenders. Borrowers can access secured or unsecured motorcycle loans to acquire a motorcycle, depending on the lender. Although several lenders in the United States offer affordable motorcycle loans, you need to understand the type of financing available for a motorcycle purchase.

How motorcycle loan financing works

Most motorcycle dealers in the United States finance new and used motorcycles. Ideally, motorcycle financing is similar to auto loan financing in many ways. For example, the motorcycle can work as collateral, just like when you take auto loans. Besides, you can use a personal loan to buy a motorcycle, which is the same as taking a car loan. In any case, you get a higher credit facility if you have an excellent credit score. If you are looking for an affordable way to finance your dream motorcycle purchase, you should ‌apply for financing through a bank, an online lender, or a credit union. You can get best motorcycle loan rates and improve chances of your loan funding if you have a good credit report. Financing works differently depending on your chosen lender. You can compare different loan features and lending services provided by multiple lenders to get the best deals. Most lenders can approve your loan quickly, allowing you to have a motorcycle of your choice. If you are in the market for a new or used motorcycle, shop around for the best financing options that will suit your financial standing. There are three main types of financing for a motorcycle purchase:

  • Manufacturer loans. Manufacturers like Harley Davidson can give loans to people who want to own motorcycles. When you choose to use manufacturer financing, there are no third parties as the manufacturer gives you the financing to acquire a new motorcycle or a used one. Also, the terms depend on the manufacturer.

  • Secured and unsecured loans. Borrowers can access a secured or unsecured loan from banks, online lenders, and credit unions to purchase a new or used motorcycle. In some cases, the lender can restrict borrowers on how they can use the loan. For example, some lenders might prefer used bikes, while others might insist that you buy a new motorcycle.

  • Personal loans. People with good credit score and history can get a personal loan from banks, credit unions, online lenders, or other financial institutions and use the money to get a motorbike. Personal loans have favorable repayment terms. They also have good APRs, and you get them quickly.

How can I borrow a motorcycle loan in the United States?

You can get a motorcycle loan in the U.S. depending on whether you qualify for the various motorcycle loans offered by various financial institutions. Anyone with a good credit score or collateral and income can get a loan. A financial institution can allow you to sign up and apply for a motorcycle loan if you are an eligible borrower. You can also get a motorcycle loan quickly when you meet the requirements of different loan lenders in the U.S., especially those that finance motorcycle purchases. There are plenty of places where you can get an instant motorcycle loan, including the following:

  • A bank. If you have an account with a particular bank, look at their loan products. You can trust your bank for a motorcycle loan that will not pull your credit score down and last too long.

  • A credit union. Many credit unions can offer you the best financial terms for your motorcycle purchase. Their rates are friendly compared to these of other lenders like banks. Besides, a credit union limits membership to qualified members. Fortunately, their membership terms are lax, which can encourage many borrowers to consider their loan products when buying a motorbike.

  • An online lender. Online lending companies are changing the borrowing game today. You can have a motorcycle loan by applying online and repaying your loan via your lender’s online platform. Unlike banks, online lenders usually have fast processing, allowing borrowers to get their money fast.

  • A dealership. Motorcycle dealerships offer loans to buyers with flexible payment schedules. They can help you secure financing to get the motorcycle of your dreams. You can shop around and get a pre-approval before signing the most applicable loan with a dealership.

Depending on the lender you choose, you can get different offers and choose the one that fits your financial needs. Any of these loan providers will guide you on what you need to start your application. In most cases, banks and other lenders need applicants to provide their income history and tax information. These lenders can direct you on the available financing choices for buying a motorbike, depending on your credit scores. 

The types of loans offered by lenders

From research of various lenders, you can establish the type of motorcycle loan that will best suit your needs. Lenders usually offer two types of motorbike loans:

  • Secured motorcycle loans. When you take a secured loan, lenders will ask for collateral from you before accessing the funding. Secured loans usually carry a lower interest rate compared to unsecured personal loans. However, a secured loan carries a risk of repossession if the borrower defaults in payment.

  • Unsecured motorcycle loans. Lenders can also extend unsecured personal loans, which do not require collateral. A borrower needs a good credit score to secure these loans. Due to their nature, an unsecured personal loan attracts high-interest rates.

How to apply for a motorcycle loan

Motorcycle loans offer relief to people who want to enjoy great rides without worrying about rentals. Due diligence can earn the borrower a chance to enjoy their motorcycle and finance it. When borrowing a loan, ensure you start by researching to find the one that works for you. After finding a loan product that fits your budget, you can head to your preferred lender to make an application. When applying for a loan, you must first consider the following:

Check on lenders’ accepted credit score

Most lenders will mainly check your creditworthiness before your loan is approved. You need to check your credit scores to see if there are areas you need to improve. If not, you need to understand which lender will likely accept your application, depending on your credit score. The latter will also dictate the terms and conditions the lender will give you and the monthly payment. Improving your scores may earn you a better interest rate.

Determine what you can afford

You can only apply for a loan you can afford. Most lenders estimate this by checking your income or financial position. So before you apply, figure out the amount you can afford to repay. You can also consider your net monthly income, other loans you could be repaying, and your monthly expenses. It is also good to apply for a loan that will not hurt your credit score.

Compare application procedures for different lenders

Sometimes, you may want to understand different lenders’ application procedures and terms before making an application. During the shopping process, you need to compare to find out the various options available. You could also try to understand how many applications are approved by various lenders and understand your chances of loan approval.

Prepare your paperwork

After establishing how much you will want for a loan, you should gather all the documents you need to present to your preferred lender. Start by preparing your personal information documents like IDs. For most lenders, you need to show proof of income and other documents they may require before you can apply for a motorcycle loan. Others will want you to include motorcycle information such as its model and year of manufacture in your application as well as the price of the bike, among other information needed to review your loan application.

Make an application

Once you have gathered the necessary documents, you can visit your preferred lender physically, start an online application on the website, or upload a mobile app. Remember that different lenders will have a specific application criterion. However, the standard process involves providing your personal information and attaching necessary documents to improve your chances of approval. You can fill out a form physically or online and submit it to the lender for review.

Get pre-approval for a motorcycle loan

After you submit your loan application to your selected lender, you may have to wait for their feedback within the stipulated timeframe given. The lender will give you their terms and conditions, payment terms, interest rate, and the amount you qualify to get. You need to provide the lender with your social security number, income proof, and identification to get pre-approved. The lender will check through your application and provide you with the estimated interest rate you will pay and the loan amount you will get. Once you get a pre-approval, you will wait for the approval of the loan to make a purchase.

Who is eligible for a motorcycle loan?

Before you can take a loan from any lender, you must first understand whether you are eligible or not. Lenders can determine your eligibility based on numerous factors. Besides, you most probably won't need a bank account with the lender to qualify for a loan. Most importantly, you are eligible for a motorcycle loan if you have the following:

  • A good credit score. You can get suitable motorcycle financing options if you have the minimum credit score required by a lender. An excellent credit is usually anything above 800, while a bad one is below 620. Importantly, an excellent credit score helps you access many options, which you can compare before settling on a financier. You need to have a good credit history as that tells the lender you are likely to repay the loan as agreed. If you have a poor credit score, make sure you work on improving it before you can apply for a motorcycle loan.

  • A reasonable debt to income ratio. The lender will consider your monthly payments towards your debts and add how much you will pay if you take the motorcycle loan you are applying for. Your debt payments should be less than 36% of your monthly income.

  • Ability to afford a down payment. Most motorcycle lenders will require you to make a down payment to purchase a motorcycle before they approve your loan application. You may need to make a down payment of at least 10% of the motorcycle’s total price.

Requirements for getting a motorcycle loan in the United States

To qualify for a motorcycle loan in the United States, you need to meet the following requirements:

  • You have a source of income. You should have a stable source of income. This shows that you will afford to repay the loan on time. Most lenders will ask for proof of income to determine whether you can afford the motorcycle loan you are applying for during the application process.

  • You are at least 21 years old. You can only apply for a loan if you are above 21 years old in the United States. You will need to provide a photo ID and a government-issued valid ID with your name and date of birth to prove this.

  • Proof of residence. You need to submit proof of residence when applying for a loan in the United States. You can provide a utility bill, lease agreement, credit card statement, or even a mortgage statement to prove your residence.

How to repay a motorcycle loan debt

Paying off your motorcycle loan debt is a great way to unburden yourself from unnecessary financial stress in the future. After taking a loan from preferred lender, it is good to plan how you will pay off the loan to avoid defaulting or your motorcycle getting repossessed. Besides, learning how to repay your motorcycle loan debt can keep you from paying more than needed on your repayment schedule. You can consider these tips to help you repay your motorcycle loan debt: 

  • Paying in advance. Paying any given loan amount typically requires that you make monthly installments. Most lenders do not impose a prepayment penalty when you choose to pay off the loan before it is due. Most financiers allow borrowers to make early installments, such as an annual installment which you can take advantage of. If you can pay off the loan in full, ensure the savings from prepayment outweigh the penalties.

  • Agreeing on repayment terms. A crucial step is to discuss the loan amount, interest rate, and term with your financier when taking a loan and bargaining a repayment term that works best for you. You can get as low as a 0.2% reduction in interest rate, which might help you save significantly by the time you are done repaying the loan. You can also ask the lender to set up a bi-weekly payment plan rather than a monthly one if it suits your financial position. If you choose such arrangements, you will pay relatively less than you would have paid in a month’s installment.

  • Contacting your lender to request a payoff quote. A payoff quote is a rough estimate of how much it will cost to pay off your motorcycle loan early. It is usually based on the current balance of your loan and the interest rate. This payoff quote provides an accurate calculation based on your loan terms and current balance due, which may differ from those used by the lender when calculating payments.

    There are usually two options that you can use to pay off a motorcycle loan early: refinance or extra payments. The most common way to refinance is by taking out another loan with a lower interest rate, which allows you to pay off your original motorcycle loan quicker. Refinancing involves contacting multiple lenders and negotiating with them until one agrees on terms such as the interest rate and repayment period that works best for you. This option works well if you have a good credit score and a stable source of income. It is also important that this method makes it easy for you to meet your loan payment comfortably and helps you avoid expensive repayments in the future. If this option is not workable, paying down more than just minimum payments could help shorten the timeframe required before paying off the debt completely.

  • Considering automated payments. Auto payments will save you a lot of time and paperwork. The lender will deduct your monthly installments automatically from your bank with an auto payment arrangement. This payment is made seamless and usually helps borrowers to avoid late fees. You can also enjoy discounts, thus saving a lot of money when making motorcycle loan repayments.

  • Paying with surplus money. Instead of waiting for the scheduled payments, you can use your surplus money or save money to repay your motorcycle loan in advance. If you are working part-time and earning some extra cash, you may use it to repay the loan.

Pros and cons of taking a motorcycle loan 

Taking a motorcycle loan might seem like an easy decision to make when you need the motorcycle so badly, but it is quite a feat to accomplish. While the utmost priority of a lending company is to find out whether you can take on debt, financial companies also want to ensure that you will get the best repayment plan. Besides, even though a loan will help you acquire a motorcycle before paying for it in full, it can sink you into deep debts when you cannot repay the loan in time. Therefore, you should compare the advantages and disadvantages of taking a motorcycle loan.

Pros

  • Easy application process. Motorcycle loans are available and offered on many platforms by lenders in the United States. Once you meet the requirements for a motorcycle loan, you can follow the easy application process by any of your chosen lender. Lenders offer a wide range of loan options for motorcycle loans. Depending on your chosen loan terms, you can also enjoy an easy application procedure. Specifically, online lenders allow you to make an application via mobile applications or online platforms, which takes only a few minutes.

  • Low-interest rates. You can enjoy low interest rates when you take a motorcycle loan. Most lenders allow borrowers with higher credit scores to get motorcycle loans at interest rates of between 3.75% and 4.5% APR for new or used motorcycles. This is partly because motorcycle loans are less risky than other types, such as quick loans.

  • Your credit history determines your loan amount. Credit history is a good predictor of your creditworthiness. It can help you get minimum loan amounts offered by lenders and qualify for higher loan amounts. It is not just the money you have in the bank that matters to get approved for a loan. Instead, lenders will establish your ability to pay back debt by looking at your credit history. While most loan providers do not base their decisions entirely on your credit score, it is still important that you maintain a good score to ascertain their financial protection when they offer you a loan.

  • Many options. Most lenders will offer you a transparent loan term when you choose to purchase a motorcycle. When looking for the best loan that suits your financial position, you must establish many factors, such as interest payments and your ability to repay the loan according to provided loan terms. The advantage of choosing a motorcycle loan is because lenders usually provide necessary information you need before you can make your choice. In most cases, you can avoid hidden charges like origination fees by comparing the many lenders throughout the country. You can also get the best loan offer by comparing different lenders. When you meet the set criteria, you can consider the following options for a motorcycle loan:

  1. Digital Federal Credit Union. It offers a 3.50% APR for 60 months, making it ideal for consumers with good credit.

  2. LightStream loan. It offers unsecured financing at 4.49% APR for up to 72 months.

  3. Harley-Davidson. It offers to finance for new or used motorcycles, starting at 3.49% for 84 months.

  4. USAA. It offers a maximum term of 72 months at 5.49% APR for customers with military connections.

  5. Navy Federal Credit Union. It offers a 6.95% APR for up to 84 months for those with fair credit.

Cons

  • Insurance and theft coverage. If you are financing a motorcycle, then insurance is required to ensure that your lender gets paid back in case of theft or damage. Insurance for motorcycles can be expensive and hard to find. You might purchase additional coverage or pay the premium in monthly installments. If you have enough money saved up or have some sort of income, then buying a second-hand motorcycle will be much cheaper than purchasing a new one. It will also lower your monthly payments. The downside is that used bikes ‌require more maintenance than new ones.

  • Mileage per year. How much your motorcycle loan will cost you depends on many factors, but one of the most important is how many miles you drive for work, pleasure, and commuting. The more often you drive your bike, the more it will cost to finance.

  • Motorcycle loans cover only the motorbike. Motorcycle loans are available for both new and second-hand motorcycles. However, if you opt to take a loan to buy a second-hand motorcycle, the loan is only for the motorbike itself. It does not cover accessories like a helmet or saddlebags that you might want to purchase along with it. If there are any repairs needed on your bike after purchasing it through a loan, then you will have to pay these fees personally because they do not fall under ‌this type of financing agreement.

Legal regulation of the motorcycle loan market in the U.S. 

The demand for motorcycle loans have surged recently because many people want to acquire motorcycles but do not have enough money to buy them outright. As more riders take out motorcycle loans, consumer complaints about excessive interest rates and unjust terms imposed by lenders has increased. As a result, Congress has enacted rules governing the calculation of loan interest rates, among other regulations. Statutes pertinent to motorcycle loan market in the U.S. include the following:

  • Federal Trade Commission (FTC). The FTC protects borrowers from unfair, deceptive, or fraudulent lending practices and educates them about their lending rights. In addition, the FTC ensures that lending organizations do not use misleading advertising or make false promises to market motorcycle loans to their consumers. The FTC also censures or prosecutes any lender dealing with motorbike loans that makes an erroneous claim about interest rates, repayment duration, or loan approval conditions.

  • Truth in Lending Act (TILA). TILA mandates lenders to provide riders with accurate information before they commit to a loan, such as how much interest they will pay over the life of the loan and what their monthly payments would be. The act also mandates that lenders disclose any costs incurred for loan processing or closing. If a lender charges a fee not disclosed in writing before committing, TILA can fine them up to $500 per infringement.

  • Equal Credit Opportunity Act (ECOA). ECOA guarantees the distribution of motorbike loans fairly. It requires lenders to make loans to motorcycle buyers regardless of race, color, religion, national origin, gender, physical challenges, or marital status.

  • Fair Credit Reporting Act (FCRA). The FCRA governs what information lenders must obtain before approving a loan. The information contains the individual’s bill payment history, previous loans, and current debts. FCRA strives to prevent borrowers from having to reveal too much personal information and lenders from disclosing this information to third parties.

The real cost of a motorcycle loan 

If you are looking for a way to get yourself on the road using a bike, taking a loan could help you do that. You can buy a bike or get your current one repaired or replaced quickly with the funds. Your new or upgraded bike will make your commute manageable and more fun. Buying a motorcycle may be an exciting investment and an expensive one.

Many lenders finance motorcycles depending on many factors. However, you may need more than the loan amount necessary to make your purchase. In addition to the bike’s original cost, there are expenses associated with owning and maintaining a motorbike that you may not know until after purchasing it. These expenses include:

  • Insurance costs that differ depending on your driving record and the place where you live.

  • Maintenance costs since motorcycles require more regular oil changes and some parts are more expensive than cars. An oil change for a bike typically costs $50-$100, depending on the type of bike and the current condition.

To grasp the actual cost of a motorcycle loan, you must first understand why lenders offer money to you and the risks involved. If you have a good credit score, lending companies will provide you with a motorcycle loan. For instance, if your credit score is above 700 (or 680 if you live in California), you will likely qualify for a motorcycle loan with a low-interest rate. Even lenders with bad credit or less than perfect credit history can access loan proceeds to purchase a motorcycle. Additionally, lenders will evaluate whether you have sufficient finances for a down payment, such as at least 5% of the purchase price, or $1,000 (whichever is greater), when choosing whether to offer you a loan. Furthermore, if a lender seeks to collect an outstanding loan from you, they will consider confiscating any property in your home, according to the loan agreement.  

While lenders provide you with a motorcycle loan if you have a decent credit score and can repay on time, various risks are involved.

  • You must repay everything you borrow, plus interest. For example, if you borrow $100,000 from Harley-Davidson at 3.49% APR, you will spend more than you borrowed. If you pay off the debt in a year, you will spend $134900, including $34900, in interest.

  • One of the most significant risks is that you may fail to keep up with your payments. If you default on the loan, your credit score will be affected. It may also be challenging to get another loan from the same or different lender. Additionally, the lender could sue you or repossess your motorcycle. 

  • You may need collateral to act as security for repayment if you default on your motorbike loan obligations. If you do not pay back what you owe within a certain period, there could be severe consequences like repossession by creditors.

  • To prevent repossession, have a strategy to make enough money to repay your monthly payments on time before taking out the loan. If not, you can look for a new job or another source of income. If you have an emergency and need some additional income for a few months, you will not have any problems making your monthly payments on schedule.

  • Before signing any motorbike loan agreement, always read the contract thoroughly. Certain lending institutions have policies mandating you to pay a set amount of interest if you repay your loan early.

Conclusion

Motorcycles serve as a mode of transportation, a way to get off the main road, a thrilling drive on the meandering routes, and a comfortable freeway cruiser. Having one can be both fun and costly. With this in mind, motorcycle financing makes getting behind the handlebar of your ideal ride a breeze.

Financing your motorcycle purchase should not be hectic with the many lenders available. You need to check what different lenders offer in terms of loan amounts, interest rates, repayment terms, credit scores, and down payment requirements. The best motorcycle loan lenders have fair terms and conditions and low-interest rates. Do market research and calculate how much debt you can afford to repay, depending on your income. This will help you choose a motorcycle loan best suitable for you.

Additionally, if you are in the market for a motorcycle but do not have the required cash on hand, you are probably looking for a motorcycle loan. It is critical to select a payback period or a bike you can afford. Before committing to the loan and continuing with your purchase, consider ‌the set requirements like interest rates and determine how much monthly repayment you can afford. Knowing what lenders expect of you and the exact amount you must pay throughout the specified period will help you avoid loan default risks.

So, when choosing a motorcycle loan, you must conduct thorough research. For instance, the lender can stipulate whether you can buy a new or used bike. Go online and search for motorcycle loans various lenders offer. Compare a few of them. You can go through their website for proof like licensing and good reviews. Also, check the loan repayment terms. Choose one provider that offers you the best deal and send your details via the application form.

FAQ

What is a secured motorcycle loan?

A secured motorcycle loan requires you to use collateral when taking a loan from your preferred lender. The security can be an asset you own and can be used to pay off your loan if you cannot pay it on the agreed time.

What is an unsecured motorcycle loan?

An unsecured motorcycle loan does not use the motorcycle or any other asset or property as collateral when you take it.

What credit score do you need for a motorcycle loan?

Most lenders prefer an average score between 670 and 739 to qualify for a motorcycle loan. Anything above 800 is considered an excellent credit score.

What is the average interest rate on a motorcycle loan?

Borrowers with a strong credit score can expect to get a motorcycle loan at interest rates of between 3.75% and 4.5% APR for new or used motorcycles.

How long are most motorcycles financed for?

Most lenders extend motorcycle loan financing between 36 and 60 months.

Is it easier to finance a new motorcycle or a used one?

Loans for used motorcycles usually attract higher interest rates than new ones.