Loans also have features and options, factors that you need to consider and that the loan agency will consider when you fill out your application. Like any loan, they will consider your age, income, credit history, place of residence, time at the job, year and displacement of the bike. You need to consider how much you want to borrow, will you make a small, medium or large down payment, the interest rate, the length of the loan (shorter time means larger payments, longer means more money spent due to piling up of interest), the monthly payment you can afford and at the end of deal, how much you’ve paid inclusive of all charges and fees. Naturally you want the lowest interest rate possible, get all the money you need and fast so you can take your new bike home.

Beginning Your Loan Search

Loan Charges –Adjustable Rate or Variable Rate A loan arrangement which allows the interest rate to change (up or down) based on Prime Rate over the course of the motorcycle loan. In North American banking, the prime rate is the interest rate charged by lenders to borrowers who they consider most creditworthy. It varies little among banks.

Annual Percentage Rate (APR)
It’s the annual percentage rate of interest charged by the lender on the total amount of the motorcycle loan expressed as a yearly rate. Like 7% or 3% or even better, 0% and it can happen from an OEM. You’ll most likely get a Fixed-Rate Loan where the interest rate stays the same for the length of the loan. The Finance Charge is total dollars paid to borrow the money. You’ll be making Monthly Loan Payments that includes both principal (the cost of the motorcycle and any accessories you chose to include) and interest (the cost of the loan).

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Entering the Loan Process

Credit History (directly affects your loan potential) Your personal history including previous loans, if you paid them off and according to the payment schedule. This includes your credit cards, rent, mortgage, utility bills, etc.

Down Payment
Most loan agencies require a payment amounting to a percentage of 10-20%, though sometimes not required.

Collateral or Security
If you own a home, a loan is basically in the bag. It knows you have something as back up to the money you owe them.

Co-Applicant/Co-Buyer/Co-Signer
Your credit rating is wobbly, but you’ve got someone with good credit standing, like Mom or Dad or your Boss who takes on the financial responsibility of the loan to help you get a loan. And pay up if you can’t make the loan payment.

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Motorcycle Loan Resources – A Sampling

Banks/Credit Unions
Getting a loan from your local bank is a good starting and reference point especially if you’re taken out and paid off any previous loans. Banks usually only finance new bikes or you can sometimes take a personal loan for a used bike.

The OEMs
Both the major bike manufacturers offer their own motorcycle financing. Many offer online application and special interest offers so check regularly.

BMW
Provides flexible financing, no down payment (subject to credit approval), terms up to 60 months. They have special programs like the College Graduate Program requiring as little as 5% down.

Buell/Harley-Davidson
Offers their financing and insurance programs but recommends you first check the insurance cost of your planned purchase to see if you can afford it, a good point to consider for any bike purchase you’re considering. Most new Harley Davidsons can be financed for up to 84 months with 10% - 20% down payment

Honda
Currently offers as low as $29 monthly payment and 7.9% Fixed APR for 12 months on any Honda but goes up to 9.9% depending on model. Like many interactive OEM sites you can build your bikes to your specs, get a quote and check out the loan payments.

Kawasaki
Kawasaki currently is offering $0 down and 6.99-9.99% APR for 24 months on all new, not previously registered Kawasaki motorcycles, but the offer ends 05/31/06. Check for new promotions.

Yamaha/Star Motorcycles
Star Motorcycle Factory Financing is currently offering, on selected models, $0 down and as low as 5.9% APR for up to 72 months or $0 Down, 0 Payments and 0 Interest for 6 months. This incentive ends March 31, check for new ones on both Star line and other Yamaha models.

Other OEMS
Periodically offer financing arrangements as well as insurance. Check with your preferred brand.

Dealerships, Boutique and Custom Shops
If you see a bike you like from a particular dealer or one of the many smaller builders, check with them. Many have made arrangements for their own financing.

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Loan Companies:
These are not all the lenders but a sampling of the national companies most of whom insure all kinds of vehicles, motorcycles being one of them.

LendingTree.com
They offer a minimum motorcycle loan of $7500 and terms of 12 to 72 months.

Capital One Auto
They provide loans for purchases from any franchised new vehicle dealership, individual or other authorized dealer or broker. Loan terms extend from 12 to 60 months with minimum loan of $7500. (Open to residents of all states except New Hampshire.)

E-Loan.com
E-Loan checks the best rates among multiple lenders (not necessarily all lenders mind you). They loan money for both new or used motorcycles. The requirement is that you buy your ride from a franchised or pre-approved independent dealer, and they do only street-legal bikes, that means no dirt bikes, ATVs, etc. $5000 is the minimum loan (but for some reason $10,000 in Arizona). Open to all states except residents of Alaska or Hawaii.

Extreme Cases: Bad Credit Loans
There are a number of large and smaller institutions that specialize in Bad Credit Loans, including for motorcycles. The good news is you probably can get the loan; the bad news is a very high interest rate, often several times the normal going rate for a good credit rating. One place to check out (and again we are not promoting or suggesting any particular loan company or organization) is creditaxis.com.

Credit Cards
Unless you’re making a big chunk of change every month and have a low interest card, don’t even go there. Dare to say No. But yes there are dealerships that will be happy to charge a bike to your card if it’s got the high enough spending limit.