Your credit is your ticket to favorable rates on financing, motorcycle loans included. But even with bad credit, it is possible to get a motorcycle loan. That is if you do your homework and seek out the best rates among lenders. We present how you can achieve this goal in six steps.
1. Talk with lenders who specialize in motorcycle loans first.
There are a variety of lenders out there but not all of them finance motorcycles. Research lenders who offer loans on cars and specialty vehicles like motorcycles, RVs, and boats. You can also try lenders who delve into personal finance.
Drop by your bank and see if they can offer you a loan, your being a long-time client of theirs could help.
Credit unions are also worth checking out as they often have a number of financial products. If they offer a motorcycle loan at a good price, a membership could be worth it.
Another source of motorcycle financing would be peer-to-peer lending platforms. Like credit unions, they may finance motorcycles at rates lower than most traditional banks.
2. Look for lenders who offer bad credit motorcycle loans.
It’s easy to get in touch with reputable lenders here.
Apparently, your goal is to look for lenders who offer motorcycle loans for people with bad credit.
The definition of “bad credit” is pretty large in scope but it implies a low credit score arising from a mix of these factors:
- if you did not timely pay your debts.
- if you fail to pay your debts.
- if some of your debts landed in the collections department.
- if you carry a high level of debt.
- if you suffered bankruptcy, foreclosure or short sale, which lead to long-term damage but whose impact could diminish over time.
Explain your credit situation to the lender. Be honest and open about it so they can come up with a guided initial assessment of you.
3. Expect not-so-low rates. But even among such rates, there ought to be one rate that is most favorable to you.
This is where research, patience and perseverance come in and pay off.
Don’t panic if the lender says it won’t finance but don’t be too hasty either to submit an application to the first lender who shows the first signs of approval.
4. Find a co-signer for your motorcycle loan.
Adding a co-signer to use his/her income and credit could help you obtain a lower rate. Thus ask the lenders if doing this could help produce the desired results given your current bad credit situation.
5. Show that you are a good payer.
Let your past track record on installment debts vouch for you. A satisfactory payment history on a previous motorcycle loan might just convince the lender that you’ll also do good on this one.
6. Aside from credit, prove that you can meet the other loan requirements.
Generally, you will be required to present certain documents in support of your loan application, including but not limited to:
- Social Security number
You also need to secure funds for your down payment, which could influence your rate, as well as closing costs.