Point of Interest
If you’re on the market for a motorcycle, it’s important to understand that not all lenders offer loans for motorcycle purchases. However, many top lenders do offer competitive motorcycle loan rates and flexible repayment terms on new and used bikes.
If you’ve found yourself in the market for a new motorcycle, you might be interested in financing. The best motorcycle loan rates can be found by several lenders, and many of them do businesses completely online. This means you won’t have to get yourself to a physical banker, and you can shop around from the comfort of your home. Before you set out to hit the open road, see why these motorcycle loans are some of the top choices to consider. There’s a nice selection for those who want secured loans, as well as unsecured loans and have a variety of credit histories to work with.
What is a motorcycle loan?
When you purchase a new or used motorcycle, you may need to borrow money from a bank or lender. If a loan is specifically for the purchase of a motorbike, using the motorcycle as collateral in case of non-payment, it’s considered a motorcycle loan. That means it can’t be used for other things like a personal loan can. A motorcycle loan rate is the APR — or interest — that you’ll pay on that loan over time. The best motorcycle loan rates are lower, making your loan payment smaller or ensuring that you make fewer overall payments over time.
Motorcycle loan rates will vary based on your personal credit score, with higher scores getting lower rates. You’ll also find that larger loans offer lower rates, and unsecured loans of any size will command a higher loan rate. In the end, term length is just as important as your rate, as it will also determine how much interest you’ll pay out over the life of the loan.
Motorcycle loans vs personal loan rates
Can you use a personal loan to purchase a motorcycle? Certainly. These types of loans can be used for almost anything, but there’s usually a higher loan rate attached to the flexibility. Since personal loans are free of collateral or aren’t considered secured loans, the bank has less possibility of getting their money back if you default. For that reason, personal loans usually cost more and interest rates are higher. They are also usually a better fit for those with better credit and who want to buy an older motorcycle or specialty bike that doesn’t qualify for a traditional motorcycle loan.
Motorcycle loans vs car loans
In theory, motorcycle loans and car loans work in very much the same way. They both are taken out with the intention of buying a specific vehicle or bike, and they use the item as security to ensure the loan gets repaid. While rates for similarly priced vehicles may be the same, cars can be significantly more expensive than most motorcycles. Since banks offer lower rates on larger loans, it’s likely that your car purchase will automatically qualify for a lower rate, simply due to its size.
The 4 best motorcycle loan rates of 2020
- LightStream — Best for great credit
- MyAutoLoan — Best marketplace lender
- Motorcycle Lender — Best for unsecured loans
- Harley Davidson — Best for HD enthusiasts
|Lender||APR||Minimum Loan||Maximum Loan||Best For…|
|LightStream||4.29% – 11.89%||$5,000||$100,000||Same-day funding|
|MyAutoLoan||3.49% – 4.69%||Varies||Varies||Bad credit or no credit|
|MotorcycleLender||From 6.99%||Not listed||$40,000||Unsecured loans|
|Harley Davidson||From 3.99%||Not listed||Not listed||Best for HD enthusiasts|
Lightstream — Best for great credit
If you have your eye on that perfect bike, why wait? LightStream has made the loan experience super easy for motorcycle fans by giving you a 100% online loan process that can be done from your phone or mobile device. With approved financing, your motorcycle loan proceeds can be deposited into your bank account right away, so that you can purchase your bike priced from $5,000 to $100,000 in person the same day. Loan rates are low, from Loan rates are low, from 4.29% to 11.89%, but the lender will also beat any approval you get from another lender by 0.10%.
MyAutoLoan — Best marketplace lender
Not everyone can pull off a 690 credit score, but that doesn’t mean you aren’t willing and able to pay back a motorcycle loan. MyAutoLoan is the loan research assistant for those customers who might not get one somewhere else. It provides customers with a variety of options that work best for their financial situations and histories. MyAutoLoan works with a variety of lenders, so you won’t know which bank is best until you apply. You’ll receive up to four offers in minutes, and you can get a loan certificate or check for your approved purchase within 24 hours. Rates range from 3.49% to 4.69%, but it truly depends on the lender and the borrower’s creditworthiness.
MotorcycleLender — Best for unsecured loans
If you don’t like the idea of having your new bike be the collateral for your loan, or you’re certain that your bike of choice isn’t able to be financed with a standard bike loan, consider what MotorcycleLender offers. This lender offers customers looking for a new two-wheel ride financing with unsecured loans. The rates for this type of loan are understandably higher, starting at 6.99% fixed. There is also a limit of just $40,000 for loans, so it’s not the best choice for someone wanting to buy a brand-new, high-end motorcycle. MotorcycleLender processes applications online and offers 3- or 5-year loan terms. The money will be deposited into your account within 48 hours of approval.
Harley-Davidson — Best for HD enthusiasts
If you’re looking for motorcycle financing, why not take a look at one of the biggest names in the industry — Harley-Davidson. The motorcycle company uses Harley-Davidson Financial Services as a dedicated captive financing provider. Rates are competitive, starting at 3.49% APR for new motorcycles and 4.99% for used rides. What’s also great about Harley-Davidson Financial Services is that most of these rates are available with $0 down for qualified buyers. The company also offers private-party financing, extended service plans and motorcycle insurance policies. If you’re an active member of the military or a veteran, you may qualify for better rates as a thank you from Harley-Davidson.
What APR should I expect with my credit?
The APR rate when you finance a purchase is total, including interest and fees, that you’re going to pay each month to borrow the money to fund your purchase. If you’ve ever used a motorcycle loan calculator, the APR is the figure being used to help you calculate the costs.
Your APR rate is heavily influenced by your credit score. Credit scores can range from 300 to 850 on the FICO scale, and since your credit score will directly influence the amount you pay for financing, it’s important to discuss the question: “What APR should I expect with my credit?”
The average APR when taking into account all credit scores is about 8.0%. The range for all APRs generally falls between 3% to 25%. Where you land on this scale will depend on your credit score, your creditworthiness, the size of the loan, whether the bike is new or used and any other factors the lender may consider important.
For borrowers with credit scores above 720, the average APR rate is around 5.50%. If your credit score is in the 600s, the average APR falls somewhere between 6.0% and 10.0%. As your credit score moves lower, that interest rate will increase — sometimes dramatically. The average motorcycle loan rate for borrowers with less than a 560 credit score is slightly above 20%.
How to apply for a motorcycle loan
1. Gather the required documents.
Before you apply for a motorcycle loan, you will need to gather all of the financial documents and paperwork lenders will require. By doing this, you can help to speed up the process and increase the likelihood of approval. While each lender will have specific requirements, there are some standard documents you will need. Start by collecting bank statements, tax returns, pay stubs and other financial documents you have.
2. Determine the type of motorcycle you’re interested in.
Interest rates will vary depending on whether you are getting a new or used motorcycle and whether you are buying from a dealership or a private seller. Before you approach a lender, take the time to determine what type of bike you are interested in. You don’t need to know the exact motorcycle, but a general idea will help, as will knowing whether you want to buy new or used.
3. Shop lenders and complete the online prequalifications.
Once you have completed the first two steps, begin shopping for lenders to find out the exact loan terms and rates you’ll be offered. Remember that while the motorcycle loan rate is important, it is not the entire picture. Make sure you look at term length, down payment requirements and other loan terms to get an overall picture of what the loan looks like. As you identify potential lenders, complete the online prequalification process for each one. Prequalifying will not hurt your credit and it can give you an idea of the rates you qualify for.
4. Select your lender.
All that is left to do is select your lender. Pick the best motorcycle lender for you and complete the application process.
The final word
Like most loans, motorcycle loan rates will depend on a variety of factors. These include your credit score, the amount you want to borrow and what type of motorcycle you will be purchasing. If you can’t get a bank to finance the ride of your dreams through one of the best motorcycle loans, don’t rule out a personal loan, which can easily cover the cost of more modestly priced bikes. Look for one with no prepayment penalties, so you can save a bit on the higher interest rate by paying it off early if you can. You may also consider financing a bike through the dealer if you’re scoping out new bikes.