Hello there! Let’s explore motorcycle loan rates. You can access motorcycle loans with special rates from many sources. This article will show you the best motorcycle loans and rates, how to apply for a motorcycle loan, and all the necessary details.
A loan may be your best option if you cannot purchase a motorcycle with cash. Some motorcycle manufacturers provide low-interest financing, which you should look into if you qualify.
Unsecured personal loans from online lenders and secured loans from banks, credit unions, and motorcycle manufacturers are great options for motorcycle loans.
Understanding the differences between different types of motorcycle loans and comparing offers from multiple lenders can help you find the best motorcycle loan rates.
About motorcycle loans
Motorcycles are typically less expensive than new cars; the average new car will cost more than $47,000 in 2022, while a further 2022 Harley-Davidson will cost around $20,000.
Motorcycle loans are another option if you don’t have the money saved to pay in cash or don’t want to take so much money out of the bank at once. Several motorcycle loan lenders can help you finance your next purchase, whether you want to buy a used or new bike.
Motorcycle loans allow you to finance your bike if you cannot afford the full sticker price. Motorcycle loan interest rates and terms vary depending on the lender, the loan amount, credit score and income, and whether the loan is secured or unsecured.
After applying for and receiving the loan, you will repay it in fixed monthly installments with interest.
Difference between secured motorcycle loans and unsecured motorcycle loans
Because the lender assumes less risk by using your motorcycle as collateral, fast loans typically have lower interest rates. Banks and credit unions are more likely to offer secured loans.
Secured loans may or may not require a down payment. A down payment reduces the loan amount and the interest you will pay. Unsecured loans do not necessitate a down payment.
Unsecured loans consider your credit history rather than requiring you to pledge the bike as collateral. This means that if you fail to make payments, the lender cannot repossess your motorcycle.
These loans are more commonly offered by online lenders, who usually allow you to prequalify for a loan to see what amount, rate, and term you might be eligible for without affecting your credit score.
Motorcycle manufacturer financing
Some motorcycle manufacturers offer financing at lower rates than the rates on unsecured or secured motorcycle loans.
Harley Davidson, for example, offers financing options for its bikes at local dealers. According to the company, rates start at 3.75% over seven years for new motorcycles.
Best Motorcycle Loans | Motorcycle Loan Rates
1. LightStream
These loans from LightStream for motorcycle financing are best for Motorcycle loans with low rates.
LightStream is a division of Trust. With LightStream, you can apply for loans entirely online and get your money deposited into your bank account the same day you’re approved.
Estimated APR: 4.99 – 19.99%
Loan Amount: $5,000-$100,000
Minimum Credit Score: 660
Apply Here: LightStream Motorcycle Loan
Pros
- Receive your funding the same day you apply
- 0.50% interest rate discount if you sign up for automatic payments
- No down payment required
Cons
- Good to excellent credit required
- The minimum loan amount is $5,000
- No loan prequalification tool is available
2. SoFi
SoFi loan is best for unsecured motorcycle loans. A good to excellent credit score is required for this loan. SoFi motorcycle loan rates and other details are presented below:
Estimated APR: 7.99-23.43%
Loan Amount: $5,000-$100,000
Minimum Credit Score: 680
Apply Here: SoFi Motorcycle Loan
3. Harley-Davidson
Harley-Davidson is the best option for MANUFACTURER FINANCING.
The company provides loans on new and used models. You can qualify for low-interest loans with repayment terms as long as seven years. And Harley-Davidson will also offer you financing if you buy a Harley from a private party.
Harley-Davidson’s motorcycle loan rates are relatively low.
Estimated APR: 3.25% – 19.99%
Loan Amount: Cost of Motorcycle
Minimum Credit Score: None
Pros
- Gear and accessories can be added to the loan cost
- Loans available for new and used models
- Low-interest loans with no down payment available
Cons
- It can only be used on Harley-Davidson models
- Loans are secured
- Financing offers are not available on all models
4. Upgrade
Upgrade loans are best for Motorcycle loans for bad credit. The details of the loan are as follows:
Estimated APR: 6.95 – 35.97%
Loan Amount: $1,000-$50,000
Minimum Credit Score: 560
Apply Here.
5. Digital Federal Credit Union
Digital Federal Credit Union (DCU) is a great option for the best motorcycle loan rates for secured motorcycle loans.
It offers low-interest rates and allows you to borrow up to 125% of the motorcycle’s purchase price, allowing you to take out extra money to cover the cost of registration or service protection plans.
Estimated APR: 4.25% to 9.10%
Loan Amount: up to 120% of the cost
Minimum Credit Score: 660
Pros
- Low-interest rates
- You can borrow up to 125% of the motorcycle’s purchase price
- You can use the loan to purchase new or used bikes
Cons
- Must be a credit union member to be eligible for a loan
- Higher interest rates for off-road motorcycles
- The longest loan term is five years
6. Upstart
Best for Motorcycle loans for bad credit. Upstart has low motorcycle loan rates, as presented below:
Estimated APR: 5.42-35.99%
Loan Amount: $1,000-$50,000
Minimum Credit Score: 680
Apply Here.
7. Wells Fargo
Wells Fargo is great for those who want an unsecured loan option. It has great available loan amounts, competitive rates, and rapid funding.
Wells Fargo allows you to borrow up to $100,000 without any form of collateral. Wells Fargo loans have no origination fees and no prepayment penalty.
Estimated APR: 5.74% to 20.99%
Loan Amount: $3,000-$100,000
Minimum Credit Score: None
Pros
- Borrow $3,000 to $100,000 without collateral
- No origination fees
- Loan terms between one and seven years
Cons
- To qualify for the lowest advertised rates, you must be an existing Wells Fargo customer.
- You may have to apply in person
- Good to excellent credit required
8. PenFed Credit Union Personal Loan
Best for Motorcycle loans for military members.
Estimated APR: 4.99-
Loan Amount: $600-$50,000
Minimum Credit Score: None
9. Avant
If you have poor credit, getting a loan can be difficult. That’s why Avant—which lends to customers with scores as low as 600, is a great option for you.
Estimated APR: 9.95% to 35.95%.
Loan Amount: $2,000 and $35,000
Minimum Credit Score: 600
Avant charges administration fees. The fee is 4.75% and is deducted from your loan amount before it is disbursed.
Pros
- Borrowers with subprime credit can qualify for a loan
- You can get up to $35,000 within one business day
- You can check your eligibility online without affecting your credit score
Cons
- Double-digit interest rates
- Administration fee applies
10. First Tech Credit Union Personal Loan
Best for Motorcycle loans from a credit union
Estimated APR: 6.70-18.00%
Loan Amount: $500-$50,000
Minimum Credit Score: 660
Comparing motorcycle loans and rates
You will need to examine these key features as you compare motorcycle loans and choose the best for you.
1. Lender requirements
Most lenders consider your credit score and debt-to-income ratio when deciding whether or not to lend to you and at what interest rate. Some lenders prefer borrowers with good or excellent credit, while others will lend to those with bad credit. Because the collateral helps guarantee the loan, it may be easier to qualify for a secured loan than an unsecured loan.
2. Annual percentage rates
The APR of a loan is the interest rate plus any fees, such as an origination fee. Most unsecured personal loans have APRs ranging from 6% to 36%; starting rates on secured motorcycle loans may be lower. The loan with the lowest interest rate is frequently the best option.
3. Repayment terms
Most unsecured loans have repayment terms ranging from two to seven years, but some lenders have fewer options. A longer repayment term means lower monthly payments; a shorter term means less overall interest paid. Based on your credit score, use a personal loan calculator to estimate your interest rate and monthly payment.
4. Other loan features
If you have multiple loan offers at reasonable rates, the unique features of one loan may influence your decision. Some lenders provide next-day funding, access to your credit score, or a loan management mobile app. These features should not take precedence over the offer with the lowest interest rate, but they can make the process of obtaining and repaying your loan more convenient.
How to apply for a motorcycle loan
Motorcycle loans operate differently than auto loans, but the process of applying for a new or used motorcycle loan is very similar:
- Examine your credit. If your credit score is lower than you expected, review your credit report for any errors that could be lowering it. The higher your credit score, the better the motorcycle loan rate you’ll get.
- Gather your documentation. Potential lenders may require proof of income and other documents. Lenders will also want to know the following:
- The model and year of the motorcycle (it’s fine if this isn’t fixed)
- The loan amount: The loan amount includes the cost of the motorcycle, helmet, gloves, and other protective gear, as well as sales tax and registration fees.
- Get a motorcycle loan pre-approval. Apply to several lenders to compare rates and terms.
What is a Good Credit Score for a Motorcycle Loan?
Lenders will evaluate your application for a loan to purchase a motorcycle based on your income, credit history, and credit score. Your credit score has a significant impact on whether you are approved and what interest rate the lender will offer you.
To qualify for a motorcycle loan with competitive rates, you will typically need good to excellent credit. Good credit scores, according to Equifax, one of the three major credit bureaus, range between 670 and 850. The lowest advertised interest rates and the most favorable loan terms, on the other hand, will be reserved for people with very good to excellent credit.
The credit scores rating is:
- 800 to 850: Excellent credit
- 740 to 799: Very good credit
- 670 to 739: Good credit
- 580 to 669: Fair credit
- 300 to 579: Poor credit
Some personal loan lenders will work with people with scores below 670. However, you’ll typically pay a higher interest rate than someone with a higher credit score.
Motorcycle Loan Frequently Asked Questions
Here are a few frequently asked questions regarding motorcycle loan rates:
1. Which motorcycle loan is right for you?
Comparing rates and terms from multiple lenders before purchasing or refinancing your cruiser, sport bike, touring bike, scooter, or moped is the best way to get the best motorcycle loan for you.
2. Where can I get a motorcycle loan?
Some motorcycle manufacturers, banks, credit unions, and online lenders provide motorcycle loans. To find the best rate, compare offers from multiple lenders.
3. How do I get a motorcycle loan?
Getting a motorcycle loan starts with comparing multiple loan offers. You’ll then submit an application, along with supporting documentation such as W-2s and pay stubs. A hard credit pull will be performed as a result of the application. Once approved, you should have the loan within a week, though some lenders may be able to send you the funds the same day or the next business day.
4. What credit score is needed for a motorcycle loan?
Those with credit scores of 660 or higher will typically receive the best motorcycle loan rates and terms. Some lenders accept credit scores under 600, but rates may be high. Before applying for a motorcycle loan, if possible, postpone your purchase until you’ve had time to improve your credit.
5. Can I get a motorcycle loan with bad credit?
Minimum credit score requirements vary, but some lenders offer unsecured loans specifically for borrowers with bad credit (FICO score of 629 or lower). The higher your credit score, however, the more likely you will be approved for a low-interest rate. Borrowers with good to excellent credit (FICO score of 690 or higher) receive the lowest rates.
6. How long are motorcycle loans?
Repayment terms for motorcycle loans typically range from two to seven years. A longer-term means lower monthly payments but more interest.
7. What are motorcycle loan rates?
The interest rates on unsecured personal loans offered by online lenders range from 6% to 36%. Secured loans may have lower interest rates, and federal credit unions have an 18% interest rate cap.
By prequalifying, you can see what interest rate you qualify for on an unsecured personal loan. Using NerdWallet allows you to compare potential rates and terms from multiple online lenders while having no impact on your credit score.
8. Can I Get a Loan for a Used Motorcycle?
Motorcycle loans are available for both new and used motorcycles. Some automakers only provide financing for new models. Others, such as Harley-Davidson, offer special funding for used motorcycles as well.
If you don’t qualify for manufacturer financing or want to compare rates from multiple lenders, you can usually find motorcycle loans and personal loans for used bikes. Used bike loans are typically unsecured. As a result, some lenders charge higher interest rates and limit loan amounts.
Conclusion:
As we have seen above, credit unions typically have some of the lowest motorcycle loan rates, but membership is required. It is also possible to obtain motorcycle financing from the manufacturer, which offers preferential rates if you are willing to jump through a few hoops, such as:
- Enrolling in a driver safety course
- Making a purchase with a credit card
- Fulfilling the requirements for excellent credit
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