Are Motorcycle Loan Rates Similar to Car Loan Rates?

Many consumers make the mistake of thinking the rates and terms for motorcycle loans are the same as those for auto loans. Lenders often prey on those seeking their first motorcycle loan because of this misconception. In fact, different lending practices apply to each type of loan.

Type of Loan - Many motorcycle loans are revolving credit lines issued through a private label credit card. Seek a traditional installment loan where possible as it offers more stable payments. Installment loans are commonly used for autos, and they have a consistent payment schedule.

Interest Rates - Motorcycle interest rates are more likely to be adjustable, particularly if the loan is of the revolving variety rather than an installment loan. They are offered at low interest rates which then go up after an introductory period.

Down Payment - Motorcycle purchases are less expensive than autos and may be available without a down payment. This gets many consumers into a situation where they cannot afford the vehicle they are operating. What would traditionally be a small loan on a car purchase can be a sizable expense when used for a bike.

 

 


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