When applying for a motorcycle loan there are many things you need to know to avoid hassles and delays. There are some common missteps that people make during the application and approval process that…
When applying for a motorcycle loan there are many things you need to know to avoid hassles and delays. There are some common missteps that people make during the application and approval process that should be avoided if you want to get approved with ease and with very advantageous loan conditions.
Seeking Finance Last
If you start shopping for your bike prior to getting the finance you need, the consequences can be disastrous. The lack of funding will drive dealers to think that they can sell you a loan too and they will also increase the purchase prices that way. Having the money at hand guarantees that you can negotiate with dealers from a better stance as you can always tell them you can go somewhere else with your money.
But most importantly, you may fall prey to an unscrupulous lender because you have chosen an overpriced motorcycle that you can not afford with the money that that motorcycle lenders are offering you. This can drive you to close on a motorcycle loan deal that will not be advantageous at all and the terms will probably be too onerous for you to afford on the long run.
Instead, if you seek your loan first, you can close on the motorcycle loan deal that offers more benefits in terms of low rate, high loan amount and flexible repayment and then, with your loan already approved, you can contact dealerships to find a motorcycle within your reach at a better price because with the money at hand you can negotiate better terms on the purchase too.
The Wrong Loan Terms
Beware of those loans and lines of credit that offer promotional terms for a specific period of time. If you close on those deals, make sure that the rate charged after the period has ended is also within reasonable ranges. If after the promotional period ends you will be charged outrageous amounts of interests, it is better to close on a motorcycle loan deal with a slightly higher fixed rate and a flexible repayment schedule which will produce loan installments that you will be able to afford without sacrifices.
Therefore, when you are closing on a motorcycle loan deal, you should try to get the lowest rate possible (on average) but do not pay only attention to the rate, the length of the loan is also important as it will define along with the interest rate, the amount of your monthly payments that you should compare with your income to see if you are able to afford them without difficulties.
Prepayment Penalty Charges
Unless you are sure that you will keep the loan through the whole repayment schedule you should try to avoid those loans that charge prepayment fees or costs if you want to pay back your loan earlier. Motorcycle loans are often paid back in anticipation as soon as the applicants income or credit improves because the amounts are usually not that high, but if the fees or costs charged for prepaying are too high it often does not make sense to prepay the loans.