What borrowers should know about loans and finance options for motorbikes
Successful bike loan application
Want to own your own motorbike? Motorbikes can be just as expensive as cars, and this means that you will often have to take out a loan to cover the costs. Finding the cash is not always easy, particularly if your bank or building society are unwilling to lend you the money. You may be offered a loan to buy a car, but if you have set your heart on a motorbike it can be more difficult to find the funding you need.
Types of motorbike loans
Before you start to despair, you need to understand that there are several different types of loans and financing options available for motorbikes. This means that, even if one or two don’t suit your needs, you could still find an option which will allow you to have the bike of your dreams, without having to call in a loan shark.
Hire purchase for cars and bikes
More popular now than in the past, the hire purchase option for motorbikes is one that can be arranged with the bike dealership. They contact the finance company for you, give all of your employment details and credit history to the company, and work out a loan that you can pay. These loans are often secured against the bike, just like with hire purchase for cars.
These are also a popular way of funding a bike, and can be done through banks or building societies. You don’t have to take out the loan specifically for the bike as the loan proceeds can generally be used for anything you wish, which means that you might be able to get extra funding beyond the cost of your bike. You should be aware that it is not always easy to get this loan if you have a poor or low credit rating . Some forms of personal loan require security, including taking out a loan on your home, which are add more risk as you could potentially lose your home if you failed to repay the debt.
Original equipment manufacturers’ financing
Another way to take out a loan on a bike is to go through the original makers, including Honda, BMW, Ducati and Harley-Davidson. They offer motorbike financing through their companies, and may even offer this to customers online. They also may offer 0% financing, encouraging buyers to buy into their brand of motorbike. However, borrowers should be aware that these loans can take many years to repay, and the loan may end up being worth more than the bike.
If you have bad credit, this may be the best option available to you. Credit unions are often unknown to borrowers, but they are small organisations that offer financial loans for the community. You may have one in your town, or in your industry. There are estimated to be 500 credit unions currently operating in the UK, and they are the best way to get funding if you don’t have access to traditional loans.
Related loan articles & news