If you are looking to hit the roads, but are tight on a budget, then why not finance a used bike/motorcycle? Before you head out for a personal loan to purchase a used bike, it’s important to set a strict budget. Don’t overdo the limits that you have set on yourself. Also, determine how much you are ready to pay in cash, and how much loan amount could be required. Properly do your homework on the different loan offers available. That being said, let’s see how we can go on from here!
Places To Look For A Used Bike Loan:
- Banks & Credit Unions
Opting for a bank or credit union may grant you some pre approved loan, and with that offer, you may look for the best-used bike. Don’t forget that, to get your loan sanctioned, you have to go through the application process, and there’s no guarantee that the offer terms would remain the same as they were at the time of pre approval. It’s true that a bank or credit union may end up saving you some money, but it can even consume lots of your time. There’s no guarantee of your motorcycle loan getting approved, as every credit union and bank has their policies and terms.
If you are less on time, and want to quickly get your loan approved by avoiding hassle of visiting multiple places, then dealer financing is what you should go for! The dealer financing would allow you to purchase your vehicle right on the spot. However, dealer financing comes with its own share of cons. For instance, dealer financing may be available for only selected bike models, and it may even be more expensive, without you even knowing in the first place, as you aren’t indulging in comparison shopping.
- Online Lenders
If you are somebody who wants to stay in the middle, i.e., not also opt for dealer financing and even avoid reaching out to a bank or credit union, then you may try with online lenders. There are various lenders out there on the Internet, who are ready to provide you instant personal loans for purchasing a used motorcycle. We know the online browsing of the lenders makes the process a lot easier and smoother, however, don’t hurry up. Take your own time and go through comparison sites to land on decent offers. Learn to read between the lines, as then you will be aware and informed about penalties, fluctuating interest rates, and other kinds of fees.
PROS & CONS of A Bike/Motorcycle Loan:
- Value Doesn’t Depreciate Easily
It’s surprising to say but in comparison to other vehicles, especially cars, the used motorcycles tend to depreciate in value quite slowly. If you learn to properly maintain your motorcycle, then its value may end up retaining, and in some lucky cases, it may also shoot up with time. In the longer run, the used motorcycle can act as a good source of finance.
- Credit Boost
The repayment of the used bike loan will help to build up your credit score. All you have to do is just meet the payment deadlines on time, and that will take your credit profile in the positive direction. Later on, when other finance needs arise, the healthy credit profile will come into play!
- Used Vehicles depreciate slower than new vehicles
Studies and statistics have pointed out that the used vehicles tend to lose value more slowly, than in comparison to newer vehicles. You purchase a new motorcycle, and right after a few years only, its value will depreciate in such a manner that you may end up with a loan amount quite higher than the original vehicle’s worth. That’s why it’s best to go with a used motorcycle.
- Transportation at your service!
Not every time you can wait to make up a budget for a vehicle! If you are in an immediate requirement of transportation and don’t have any other modes available, then it’s best to go with a personal loan for a used bike or motorcycle. As time passes, you may gradually start to accumulate and repay the loan amount.
- Damaging Credit
If you have gone for a loan that requires you to meet higher monthly payments, then that increases the chances of a default. In case, you end up failing to meet the monthly payment cycles, then that may affect the credit score in a negative way.
- Higher Annual Percentage Rates
In comparison to your new motorcycle loans, the used-bike loan seems to have more annual percentage rates or in other words, APR. What does the APR include? Well, it simply consists of the interest rate and the other fees.
This is very obvious, but still for the sake of it, had to be stated. If you had gone to purchase a used bike with cash, then that would have cost you far lesser, than what you are paying for a loan.
Remember, when it comes to financing a used bike, never hurry up! Take your own time to figure out the best offers, as the extra time and efforts invested now are going to save you from the long term pain. Anyways, that being said, if you have any more doubts, hit us in the comments below. We would be more than delighted to help you with your queries!