What is a good monthly payment for a motorcycle? Motorcycling journeys are best-enjoyed as free-spirited adventures. However, the purchase of a new or used motorcycle is a trip where forethought and planning should be exercised to avoid being taken for an undesired ride.
When looking at a cruiser, off-road bike or scooter, it’s best to know what you can afford prior to buying. Through this motorcycle loan calculator, you can determine monthly motorcycle payments by simply entering in a few details, including your planned down payment and interest rate.
What is a good monthly payment for a motorcycle?
A good rule of thumb is to put a 10-20 percent down payment on a motorcycle. That gets you in a good, equitable position. If you have bad credit, putting more down can make you a better risk for lenders. It usually depends on credit criteria, but more people put 10 percent down than do double that.
So, if you’re looking at a bike that costs $9,000 (and we do have bikes under 10k) your down payment should be between $900 and $1,800. If you’re buying a $20,000 bike, expect to put between $2,000 and $4,000 down.
If you’re low on cash, all is not lost. And, if you have plenty of cash but you’re not sure you want to spend it on a bike right now, a lot of people choose to take advantage of our H-D Visa, but more on that in a minute.
What is a motorcycle loan?
Motorcycle loans are often secured loans. This means you need to have collateral. This is usually the motorcycle itself. So, if you fail to make your payments, the lender can take your bike.
You can also apply for an unsecured personal loan to buy your bike. But lenders can view this as a greater risk. So they typically come with higher interest rates.
You will need higher credit scores for loan approval and the best rates. Poor credit usually means higher rates of interest.
How our motorcycle loan calculator works
Are you looking to score your dream motorcycle? The first step is to find out if you can really afford it. Regardless of whether you have top-tier credit or your score is in need of a tune-up, it’s important to understand the terms of your loan and how much it’ll cost you each month — that’s where our motorcycle loan calculator comes in.
For any motorcycle loan, you’ll need to know the amount you’re borrowing, the annual percentage rate (APR) and the loan term. With our motorcycle finance calculator, you can play around with the inputs to see how they affect your monthly payments. Here’s a breakdown of the three main components of our bike loan calculator:
- Loan amount. This is the total amount that you’re going to borrow. So if you plan to roll taxes and fees into your loan, for example, you’ll have to add them to the principal value of the motorcycle. Play around with different inputs to see how they change your potential payment. For example, try a few different down payments to see how much your monthly bill goes up or down.
- Interest rate. Your loan’s annual percentage rate (APR) tells you how much interest and fees you’ll be charged on your loan. Motorcycle loan rates are typically a bit higher than you can get with an automobile loan, so that makes it even more important to shop around for the best loan.
- Loan term. Your loan term is the amount of time you have to repay your debt. Typically, motorcycle loans are in the 3- to 5-year range — however, the shorter the term, the less you’ll pay in interest over the life of the loan.
Where can you get a motorcycle loan?
There are four different financing options you can explore for an auto loan. They all have their pros and cons, some more than others.
Motorcycle loans from banks, credit unions, and online lenders
Such loans and the amount you can get will depend on your credit history. If you have a good credit score, you have a higher chance of getting a higher loan amount. And also getting the lowest rates of interest or better rates of interest.
They can also give both secured and unsecured loans. But unsecured loans tend to have higher interest rates than secured ones.
Motorcycle loans like these can also have restrictive loan terms. For example, they can say that you can buy only a new motorcycle with the money.
This is an option that some motorcycle manufacturers, such as Harley-Davidson or BMW offer. Ducati, KTM, Kawasaki, Honda, and more also offer such services.
In this case, you can buy, for example, Harley-Davidson motorcycles with a loan from the manufacturer itself. Then you don’t have to go through a third party (like a bank). This is possible for both new and used motorcycles.
Manufacturer loans are secured by your bike. This means they can take your motorcycle if you do not make your regular payments.
Local banks and other financial institutions also offer personal loans, depending on your credit score. They do not need collateral and you can get them quickly. Such loans are also not restrictive. You can use the loan for anything.
But unsecured personal loans have higher interest rates.
Getting a loan from a dealership
Some motorcycle dealers also offer motorcycle loans. They act as the go-between and submit your loan application to lenders on your behalf.
This can be more convenient at times. But do remember that the dealership will charge extra for the service. Plus, it can also stop you from comparison shopping at other locations.
Some dealerships also offer in-house financing. They offer the loan directly. But such loans tend to have much higher interest rates.
What you should check when you take a motorcycle loan?
When you take a motorcycle loan, you should always keep a clear eye on the following. This way you know exactly what you are paying for.
- The total dollar amount you’re borrowing.
- The monthly payment amount and repayment terms.
- The interest rate.
- Total finance charges (interest plus fees).
- Any additional fees. This includes a late payment or a pre-payment penalty.
- The total annual percentage rate, or APR. It should include your interest rate and certain fees in your loan agreement (like a loan application or origination fee).
Loan for a used motorcycle
As mentioned some manufacturers only offer loans for new models. But others, like Harley-Davidson, have special financing for used motorcycles too.
Financial institutions also offer motorcycle loans and personal loans for used bikes. But used bike loans are often unsecured. So, some lenders charge higher interest rates and the loan amount you get may not be as high.
What is the full cost of getting a new motorcycle?
When you buy a new motorcycle, you have to keep different expenses in mind. Sometimes, we forget and factor in only the sticker price. So, what are the different expenses to keep in mind?
- The motorcycle’s asking price or sticker price. The more features and the bigger the engine capacity it has, the costlier it will be. For this, you can save money by buying the bike during the off-season or during sales. Older-year models also often cost less than current-year models. Used bikes can also cost less.
- Riding gear for protection. An important item is a good quality helmet which can cost about $300 and above. You may also need eye goggles, good outerwear, gloves, and boots. All these together will cost upwards of $1000.
- Motorcycle maintenance and fuel. You cannot neglect your bike after buying it. So, motorcycle owners tend to spend around $1,000 on maintenance each year. This cost can greatly vary based on the type and cost of your motorcycle. The cost of fuel is also an expense you always have to keep in mind.
- Cost of a motorcycle license, registration, and riding courses. When you buy a bike, used or new, you will have to register it. You will also need to apply for and pay for a license if you don’t have one yet. The cost can vary from state to state.
- Insurance. Many states, like California, need riders to have motorcycle insurance. This cost can vary from $200 to $500 or even more.
- Upgrades and accessories. You may want to upgrade your bike parts or change its look with accessories like vinyl wrapping. They will also add to your expense.
What is a good interest rate on a motorcycle loan?
In the current market environment, a good rate for a motorcycle loan is somewhere between 5.29% and 7.25%. Keep in mind, though, that rates for bad-credit borrowers can reach 36% or more.
How long is a typical motorcycle loan?
Motorcycle loans typically range between one and seven years; still, the shorter your loan term, the less interest you’ll pay overall. Your term may also affect your interest rate, depending on your lender.
Can I get a motorcycle loan with bad credit?
If you’ve hit some financial bumps along the way, you may have trouble qualifying for motorcycle financing. However, there are lenders that offer bad-credit motorcycle loans to borrowers with most credit scores, but you can expect to pay high interest rates and receive less-than-favorable terms.
Above is information about What is a good monthly payment for a motorcycle? that we have compiled. Hopefully, through the above content, you have a more detailed understanding of Where can you get a motorcycle loan? Thank you for reading our post.