Five Simple Steps To Help You Get A Motorcycle Loan


You’ve been thinking about purchasing a motorcycle instead of a second car. Along with the gas savings, the motorcycle will provide reliable transportation to and from work. The trick now is to make sure that you can get the best deal on the financing. Here are five steps that will ensure you lock in the best possible rates and terms.

Order Copies of Your Credit Reports

Before you think about making any type of major purchase, always find out what information is currently on your credit reports. Since there is no way of knowing in advance if a lender will pull reports from one or all three of the major credit reporting bureaus, you need to get a report from each one. Your goal is to determine if there is anything on the reports that is not true.

Look for line items that are out of date. Contact those creditors directly and get them to submit updated information. If there is something that is just plain wrong, file a complaint with the credit bureau. Anything you can do to ensure the accuracy of the information will be in your best interests.

Reduce Your Debt to Income Ratio

Are you carrying high balances on your credit cards? If so, consider putting off the motorcycle purchase while you pay down some of those balances. Lenders look closely at how much of your income is already going to meet other obligations. They want to know you can make the loan payment on time every month. A lower debt to income ratio minimizes the risk to the lender and increases the odds of your loan application being approved.

Think Beyond Dealer Financing

The motorcycle dealer probably has either in-house financing or financing options through a third party. While you should investigate those possibilities, do not limit yourself. Check with your bank and with other lenders in the area. You may find that it is possible to lock in better terms and conditions by finding your own lender.

Consider Using a Broker

Comparing loan options with different lenders can take time. To help streamline the process, consider working with a loan broker. The broker will have connections with multiple lenders and can find the best deal for you. Before anything is signed, you still have the ability to look at the terms and make sure you can live with the interest rate and the amount of the monthly loan payment.

Look at Duration as Well as the Interest Rate

You want an affordable monthly payment, but it helps to go with a shorter duration for the loan. Even with a great interest rate, you will end up paying less for a two-year loan versus a three-year loan. If you can swing the payment on the loan with the shorter duration, do so. In the long run, you’ll save money.

Remember that your goal is to secure a loan with the best possible terms. That includes making sure you can honor all the provisions found in the loan. With some advance preparation and attention to detail, it is possible to find the right loan and buy the motorcycle of your dreams.

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