If you’re looking to hit the open road in a brand new ride or simply want a more fuel-efficient mode of transportation, nothing compares to a motorcycle. However, there are some important steps you should take before making your purchase, like creating a budget and getting pre-approved for a loan! This guide will show you how to get a motorcycle loan pre-approval.
What Is a Motorcycle Loan?
Motorcycle loans are often secured loans, meaning you must back them up with collateral. In this case, the collateral is usually the motorcycle itself.
Why Get Pre-Approved for a Motorcycle Loan?
Getting a motorcycle loan pre-approval will give you an estimate of how much money you can borrow and what your monthly payment will be. Having this information will make shopping easier.
To start, you can check out our motorcycle loan rate page and use the motorcycle loan calculator to figure out what works best for your finances. Then submit a preliminary application for the easy pre-approval process with us.
If qualified, we’ll work with you on how much you can borrow, the interest rate, and what the terms of the loan will be.
Your Checklist to Pre-Approval
Know Your Credit Score
It’s a good practice to always check your credit score before applying for a loan. The higher your score, the better the loan terms and interest rate will be. All three of the main credit bureaus provide a free credit report to consumers once a year. Seeing your credit score at the start of the process will give you time to dispute anything that may be inaccurate.
Check Motorcycle Values
Kelly Blue Book for Motorcycles and NADA guides are two online resources that can help you determine the market value of motorcycles. You can also use these value comparisons to prepare for price negotiations.
Decide on a Budget
Typically, the bigger the down payment and the shorter the loan term, the less you’ll pay in interest over the lifetime of the loan. Always make sure your monthly payment is affordable and avoid missing payments because that will negatively impact your credit score.
If you can’t decide between a higher or lower payment, go with the lower payment and put extra funds toward the loan principal whenever you can.
Consider All Costs
The purchase price is just one part of the overall picture to think about when financing a motorcycle. In addition to the monthly loan payment, be sure to budget for insurance, maintenance, protective gear, and any accessories you might want to buy.
Factoring these into your pre-approval application leaves no surprises when it’s time to go shopping and allows flexibility in your budget for fun activities with your new wheels. Take a look at some of these Utah motorcycle rides for inspiration when planning your next adventure!
Choose a Motorcycle
You might already know the make and model of motorcycle you want to purchase and have an approximate cost. Pre-approval makes shopping even easier because you’ll know the exact motorcycle you plan to finance, plus the motorcycle’s mileage and vehicle identification number (VIN).
If you’re not sure which bike is for you, take the time to explore your options and test-drive various models.
A Larger Down Payment
A larger down payment can reduce your monthly payments as well as decrease your interest rate and the overall cost of the loan. But, if you don’t have the best credit and repayment history, providing a larger down payment is a smart choice because it can increase your chances of qualifying. It will also lower the amount you need to borrow and reduce risk for the lender.
Stay on Track With a Great Rate!
Finding the best motorcycle loan can involve a bit of work because there’s no one-size-fits-all financing method for your new bike.
If you’re willing to research the market, compare estimated interest rates, and calculate how much new debt you can afford to take on, you’ll be in a better position to make a deal that’s best for you.
Read below for extra benefits Wasatch Peaks Credit Union can offer for your next motorcycle loan!
