How to Get a Used Motorcycle Loan

Are you in the market for a used motorcycle but concerned about the financial aspect of your purchase? 

A used motorcycle loan is a type of financial product designed to help you purchase a pre-owned motorcycle.

This article will discuss how to get a used motorcycle loan, the pros and cons of used motorcycle financing and provide you with the best lenders when it comes to getting a used motorcycle loan.

Key Points: 

• Purchasing a used motorcycle is typically more cost-effective than buying new.
• Banks, credit unions, online lenders, and motorcycle dealers all provide motorcycle financing.
• Differences between new and used motorcycle loans include the loan amounts, loan terms, interest rates, and more.
• You can purchase a used motorcycle from a private seller with a loan or from a dealer.

How to Get a Loan for a Used Motorcycle

To get a loan for a used motorcycle, there are a few steps you should follow to ensure a smooth process:

1. Assess Your Financial Situation 

Start by assessing your credit score and estimating your budget. A higher credit score will increase your chances of getting approved for a loan with favorable terms. Determine the necessary motorcycle loan amount and monthly payment based on the price of the motorcycle you plan to purchase.

2. Explore Different Lenders and Loans

Research various lenders such as banks, credit unions, and online lenders. Review their motorcycle and auto loan products and compare the interest rates, terms, and conditions they offer for used motorcycle loans. Choose the lender that has qualification criteria that you meet and offers the best rates and terms for your needs.

3. Apply for a Loan

Visit the chosen lender's website or contact them directly for guidance on their motorcycle loan application process. Gather all necessary information and documentation in advance to expedite the process. Be prepared for a credit check as part of the application process.

Compare motorcycle loans: Best Unsecured Motorcycle Loans

4. Await Approval

Factors such as employment, income, credit score, and collateral may affect the motorcycle loan approval decision. Loan approval times can vary among lenders, so be patient during this stage.

5. Secure Financing

If your motorcycle loan application is approved, you can negotiate the specific loan terms with the lender and accept the loan offer. The time it takes for funds to be disbursed can vary among lenders.

By following these steps, you can increase your chances of successfully obtaining a loan for a used motorcycle that fits your financial situation and requirements.

Key Differences Between New and Used Motorcycle Loans

When it comes to financing a motorcycle, there are typically two options to consider: new or used motorcycle loans. The key differences are as follows:

• Loan amount—New motorcycles often come with a higher price tag, which means that borrowers may need to take out a larger loan to cover the cost. Used motorcycles tend to be less expensive, so borrowers may be able to secure a smaller loan amount.
• Loan term—New motorcycle loans may offer longer terms, allowing borrowers to spread out their payments over a longer period of time. This can result in lower monthly payments, which can be beneficial for those on a tight budget. Used motorcycle loans often come with shorter loan terms, which means borrowers will need to make higher monthly payments but can potentially pay off the loan sooner.
• Credit scores and credit history—Lenders typically have stricter requirements for new motorcycle and auto loans, placing more emphasis on a borrower's credit score and credit history. 
• Interest rates—In general, new motorcycle loans tend to have lower interest rates compared to used motorcycle loans. This is because new motorcycles are considered less of a risk for lenders, as they are often in better condition and have fewer miles on them. 
• Depreciation—New motorcycles tend to depreciate more quickly compared to used motorcycles. This means that when financing a new motorcycle, borrowers may find themselves owing more on the loan than the bike is worth within the first few years. Used motorcycles have already experienced a significant portion of their depreciation, so borrowers may find themselves in a better financial position.

Pros and Cons of a Used Motorcycle Loan

Purchasing a used motorcycle can be a great way to save money and still enjoy the thrill of riding on the open road. However, when it comes to financing your purchase, there are some pros and cons to consider before taking out a used motorcycle loan.

Advantages of a Used Motorcycle Loan

There are many advantages of getting a used bike loan as opposed to a new one, including:

• The bike is more affordable—One of the biggest advantages of used motorcycle financing is the lower price tag of the bike itself. Used motorcycles are typically more affordable than new ones, which means you may need a smaller loan amount. 
• Shorter loan terms—Used motorcycle loans often come with shorter repayment periods, meaning you can pay off the motorcycle loan sooner. This can save you money on monthly payments over time and allow you to become the sole owner of your bike faster.
• Less stringent credit requirements—Used bike loans may also be more forgiving when it comes to credit requirements. Lenders understand that credit profiles can vary, and they may be more willing to work with borrowers who have a less-than-perfect credit history.

Disadvantages of a Used Motorcycle Loan

Disadvantages of a used motorcycle loan include:

• Higher interest rate—One disadvantage of a used bike loan is that interest rates tend to be slightly higher compared to new motorcycle loans. Lenders may view used motorcycles as slightly riskier, which means they may charge a slightly higher interest rate to offset that risk. 
• Higher maintenance and repair costs—Used motorcycles may require more maintenance and repairs compared to new ones, especially if they have higher mileage or are older models. It's important to factor these potential costs into your budget, as they can impact your overall affordability and adjust your estimated monthly payment.
• The motorcycle has already depreciated—Used motorcycles have already experienced a significant portion of their depreciation, which is beneficial if you plan to sell or trade in the bike in the future. However, it's important to note that all motorcycles depreciate over time, so you should still be prepared for its value to decrease.

Best Motorcycle Loans Examples

When it comes to finding the best motorcycle loans for used bikes, there are several lenders that offer attractive options. Some of the top choices include LendingTree, Credible, and LightStream.

LendingTree provides a platform that allows borrowers to compare unsecured loans from multiple lenders. This means you can find competitive rates, flexible terms, and large loan amounts that suit your needs. LendingTree works with a wide network of lenders, so you have a greater chance of finding a loan that fits your specific requirements.

Credible is another great option for used bike loans. They partner with reputable lenders that offer competitive interest rates starting at 2.49%. Credible's platform allows you to prequalify and compare loan offers without impacting your credit score, making it a convenient and efficient way to find the best loan for your needs.

LightStream is known for its low interest rates and flexible loan terms. They offer unsecured loans up to $100,000 that can be used for purchasing a used motorcycle. With LightStream, you can expect fast funding, no fees, and a simple online application process. They also offer a Rate Beat Program, where they will beat any qualifying interest rate offered by a competitor. This ensures that you're getting the best possible deal on your used motorcycle loan.

Where Can You Buy a Used Motorcycle?

When it comes to buying a used motorcycle, you have a few options. You can either purchase it from a private seller or from a dealer. Each option has its own advantages and considerations.

Buy a Motorcycle from a Private Seller with a Loan

When buying a motorcycle from a private seller, obtaining a used motorcycle loan from an independent lender is often necessary. The lender will typically require the motorcycle to be used as collateral for the loan.

Buying from a private seller can offer the advantage of affordability. You may come across better deals and have more room for negotiation. However, there are a few drawbacks to keep in mind. Private sellers may not offer warranties or guarantees, and you may need to handle all the paperwork and registration process yourself.

Buy a Used Motorcycle from a Dealer

Almost all dealerships offer financing options either in-house or through motorcycle manufacturers. This means that you can conveniently secure a loan while finalizing your purchase.

Buying from a dealer provides peace of mind as they often provide warranties or guarantees, ensuring that you're protected if any issues arise with the motorcycle. Additionally, dealerships can handle the necessary paperwork and registration process on your behalf, saving you time and effort.

Does Financing a Used Motorcycle Build Credit?

Financing a used motorcycle, similar to an auto loan, can help improve your credit score, as long as you make your payments on time and manage your debt responsibly. When you finance a used motorcycle, it is considered an installment loan, which is a type of debt that can positively impact your credit history and credit scores.

Final Word: It’s Time to Apply for a Used Bike Loan

Comparing loan offers from different lenders is essential to ensure you secure the best deal possible. Look for lenders that offer competitive interest rates, flexible terms, and favorable loan features, keeping in mind the impact these factors will have on your monthly payment. By doing your research and obtaining multiple loan offers, you'll be able to make an informed decision and choose a lender that meets your unique needs.

Search reputable used motorcycle lenders with Finimpact today!