The Secrets on Getting a Good
Owning a motorcycle is something that many dream of and yet do not really achieve,
especially that price rates for motorcycles can get pretty high. In such case, getting a
motorbike loan is probably the only ticket for them to achieve it. However, choosing the wrong
loan program can land you in one big financial mess with high interest rates that will make it
almost impossible for you to keep up. How does one get a good motorbike loan?
Pick out the loan
Before you start picking out the motorbike that takes your fancy, try to focus on the loan and
know just how much you are qualified for. Opting to buy a motorbike that is far above the
amount that lender is willing to lend you is practically equal with digging a grave for yourself.
Therefore, choose the loan first before choosing the motorcycle.
Search for the loan
Shop around for a loan with an interest rate closest to your liking. Banks, credit institutions and
other similar companies will be a good place to start. Directly going on a loan from a
motorcycle store might not be a very good idea since most of them will charge you with a much
higher interest rate compared to the rates of conventional bike loan programs.
Look at the loan terms
Lenders will almost always invite you to sign up for a long term motorcycle finance program,
some going as long as 72 months. This might seem like the most attractive proposition out
there – with its fixed monthly interest and low monthly payments – but you will end up with
paying more than the motorbike is worth. Of course, this then turns out into a not-so-good-deal
in the end.
There are two ways that the lender will determine the rate of interest that you will have to pay:
simple interest and rule of 78. With simple interest, you will have to calculate the interest on
the basis of the loan balance. With the rule of 78, you will only pay the interest for the first
years, giving you no equity of your vehicle. Look into this before choosing a motorbike loan
Rate of interest
Determining the rate of interest is also important with an option of a fixed rate of interest or
variable rate of interest. Of the two, the fixed rate of interest is the better option. Before signing
up for the loan, ask the lender what instances can cause the interest rate to jump so you can
prepare yourself for such circumstances. Do this along with getting a good feel of the entire
Choosing the right loan is just as crucial as choosing the right lender. Therefore, make sure
that you pick a good and reputable company to get your motorbike loan from.