Motorcycle Financing Options to Consider

Motorcycle financing is different from automobile financing for several reasons. First, the limits are lower. Additionally, motorcycles are typically a secondary form of vehicle lease instead of a primary. Finally, motorcycle manufacturers have taken a different path to providing financing options than car manufacturers. Ultimately, this the borrower with plenty of alternative financing options to consider.

Traditional Lenders

Traditional lenders, like banks, have options for motorcycle financing. In this case, the loan will not be wholly different from an auto loan. The loan will be extended based on your credit, income and current debt. You will receive the loan in a lump sum which is then paid back in installments. These loans typically are the most stable over time, and offer competitive interest rates. However, lower rates are usually available through alternative financing options.

Personal Loans

Personal loans can come from traditional or alternative lenders. Since motorcycle loans are so small, a personal loan may cover the total cost to own the bike and even leave you with some extra cash. Personal loan rates tend to be much higher than straight motorcycle financing options. However, they offer the advantage of not requiring collateral from you. This makes the loan much lower risk to you, the borrower. It also means your credit score will improve much faster if you pay off the loan. An additional benefit to your credit comes as the motorcycle appears as an immediate asset on your credit; if it is used as collateral, it is not seen as an asset.

Revolving Credit Lines

Motorcycle manufacturers offer one very creative form of financing to consider. Some offer actual branded credit cards, like Honda, that allow you to purchase the motorcycle on a revolving credit line. Like any other credit card, you get to decide how much to pay down each month. You also get to decide if you would like to make other purchases on the card, actually increasing the debt you owe to the lender. The flexibility of this option rarely makes up for the expense, however. The interest rates typically start very low as an incentive; they then adjust to a much higher rate. Adjustable rate loans are also very unpredictable, meaning you cannot truly determine how much the loan is going to cost you up front.

Auto Loan Modification

It is possible to consolidate your auto loan and your motorcycle loan into one vehicle loan. This option may save you money in interest rate. You can approach your original lender and ask to reset your limits to cover the cost of the motorcycle. You will then have a higher monthly payment, but the interest rate may be less than the sum of the two independent interest rates. This only truly works if you have performed very well on your auto loan thus far and the lender is happy to continue to extend financing in your direction. There is an increased risk with this loan, though, because both your car and your motorcycle may be seized if you default.


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