How to Finance a Used Motorcycle
If you are in the market for a used motorcycle you might need help paying for it. There are a few sources you can tap into to get a motorcycle financed. Review all of your options before you choose a financing source. By shopping around you might be able to save money with a lower interest rate and better terms.
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Instructions
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Visit a local bank and fill out a loan application. You will need to provide personal information like your name, address, social security number, phone numbers, date of birth, place of employment, and three to four personal references. You also will be asked for financial information, such as your income, bank accounts and credit card accounts. The bank employee will review your file to see whether you qualify for a loan, and at what terms.
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Review the terms and conditions of the loan if you are approved. Depending on the amount, you might not need to put up the motorcycle as collateral. If no collateral is needed your loan will be unsecured, also known as a signature loan. The sales associate will go over the loan amount, payment schedule, interest rate and other terms.
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Pay with a credit card. If you can't get a bank loan and you have a high-limit credit card, you can use it to purchase the motorcycle. You should read the terms of the credit card carefully because some carry high interest rates.
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Check with the dealership to see what type of financing is available. Compare the financing offered by the dealership with your other financing sources. This step could save you money. The interest rate you receive from the dealership will depend on your credit history.
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Purchase your motorcycle with a home equity line of credit. If you have built up enough equity in your home, you can use the access checks provided by the lender to buy your motorcycle. Payments are usually interest only. This loan is secured with your home.
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Tips & Warnings
Have your motorcycle checked out by a trusted mechanic to make sure it's in good running condition before you purchase it.
If you are taking out a home equity line of credit for the first time, you might face costs such as appraisal fees, closing costs and title insurance. This option might not be cost effective when buying a used motorcycle. If you have previously opened a home equity line of credit, you probably won't have to pay these additional costs.
Interest rates on home equity lines of credit are usually variable, which means the rate can increase. This can result in a higher payment.
References
- Photo Credit two motorcycles. image by Yuri Bizgaimer from Fotolia.com
