Having a motorcycle is a dream of many people, but just like many other people who cannot buy one in cash, you may choose to take motorcycle loan. Motorcycle insurance for financed ride is definitely a bit different from the one you have when the ride is fully yours. Just like financing a car, financing a motorcycle means you put risk on both you and your lender, because you take a loan to buy a motorcycle and then still have to pay regularly until the loan is repaid.
A lender will want to know everything about your financial background before allowing your loan application (all responsible lenders do this, so be careful of shady offers that say you can finance a ride without financial background check). This means you need to have strong positions in aspects such as credit score and proper insurance.
Relations between Motorcycle Insurance and Credit Check
In motorcycle financing, a lending company puts itself at risk because it must give you loan, which you must repay within certain periods. This means the company needs to check on at least three aspects: your income, your credit score, and your insurance policy. Your income is largely connected with your credit score, so you can think of them as one aspect. Things that can affect your credit score are, such as: regular income and its amount, credit card debt, personal risk factors such as age, marital status and job, and the fact that motorcycle is a riskier vehicle option compared to car.
A lending company will also want you to have specific adjustment in your motorcycle insurance, just like in car insurance. For example, the lender may want its name to be attached in your insurance as co-payee. If you already secure the loan and take the motorcycle around, your lender will be eligible for the compensation when accident happens. In this case, if you have good credit score, you will not have to pay high premium.
Therefore, having good credit score is important to finance a motorcycle. With good credit score, your application will be accepted faster, and you can get your dream motorcycle without problem.
Choosing the Best Motorcycle Financing Lender
While having good credit score and insurance for financed motorcycle is important, there are other aspects you still need to fulfill. Choosing the right lender to get the motorcycle loan is definitely important, since it will affect your financial aspects and security in paying as well. Depending on from where you get the loan, you may expect different approaches in the financial aspect. Here are some different lenders with their possible financial characteristics when dealing with you:
Manufacturer.
Manufacturer of motorbike brands may offer special finance offers, particularly in new motorbikes. You may also be able to get financial program for the original accessories, if you want them. This is a common practice and you should feel safe applying for this program, although different manufacturers may have specific details.
Motorcycle dealership.
Dealership may not give the most varied options, and you also need to buy the motorcycle from it. You probably don’t get the rate that you wish. However, financial program from a motorcycle dealership is usually trusted enough, especially in the case of trusted dealership of popular manufacturer.
Credit unions.
A credit union is generally a great place to get motorcycle financing, since it offers better rates. However, you must pay attention to shady unions, which do not check the credit score or insurance requirements as intense as trusted unions. They probably will not offer credible services in the future.
Online loan companies.
Financing motorcycle from online loan companies or lenders is popular, but with the high money comes from the business, there are too many online lenders you need to avoid. These lenders probably offer incredulously good packages with small prints that inform you about high rates. Always be careful of overrated claims and suspicious details in the contract before applying for loan.
By choosing your lender carefully, and considering all financial aspects such as credit score and motorcycle insurance, you can get your dream motorcycle without experience difficulties in the future.
Financing a motorcycle is a good idea to get your dream ride if you don’t have cash to buy one. However, you still need to put priorities on important things. Never use your home or other valuables as collateral for the loan, and don’t use credit card to buy motorcycle if your credit score or insurance doesn’t cover the financing. Also, make sure you can properly adjust your motorcycle insurance details, so you can cover your financing step.