How to Get a Bike Loan

Bike loans are low limit loans.

A bicycle loan is a relatively low-limit loan, meaning the risk to the lender will be very low. As such, it is fairly easy to get a loan to purchase a bike even if your credit is less than perfect. A bicycle loan is a form of personal loan that will not typically be secured against collateral. If you have an income, a permanent address and are able to make an initial down payment, you will likely qualify.

Things You'll Need

• Permanent address
• Income verification
• Fair credit
• Down payment

Instructions

Find a Bike Loan

1. Get a good faith estimate on a personal loan quote from about three lenders. It is best to choose a variety of lenders such as a bank, a credit card company and a community lender. Typically, traditional lenders like banks offer the best rates. They may require the highest credit standards, however, so bank loans are most available to borrowers with a good financial history.

2. Select the lender with the best quote. Evaluate the quote based on interest rate, monthly payments and loan terms. Many borrowers consider only interest rate when choosing a loan. However, interest rate is subject to change based on the length of the loan and the size of monthly payment. Be sure to compare loans against all features in order to learn which will be most affordable.

3. Apply directly with the lender for loan pre-approval. Supply your personal information, income verification and estimated down payment quote. Your personal information, including a Social Security Number, will be required in order for the lender to carry out a credit check. An income verification on a small loan can be handled through supplying a pay check or a recent tax statement.

4. Shop for a bicycle that is within your loan budget. Shopping for a bicycle after you have already received your financing helps you avoid picking a bike that is too expensive for your budget. Remember to add your loan quote to your down payment to know exactly how much you can afford to spend.

5. Negotiate loan terms to finalize the financing. Ensure you can afford your monthly payment foremost, and then try to negotiate for any reductions in cost by electing different terms. For example, shortening a loan length will generally result in a lower interest rate.

Tips & Warnings

• A number of communities offer bicycle loan programs to encourage more people to ride bikes on necessary errands. Consider these resources first, since they are often less expensive, and the proceeds from your loan may go back into your community.

References

• EcoAct.org: Bicycle Loan Program
• CapitalOne.com: Personal Loans
• BankofAmerica.com: Vehicle and Other Loans