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All You Need to Know About Motorcycle Loans

Whether you’re a weekend biker or an avid biker, motorcycle loans can get you on the open road in no time. Motorcycle loans function similarly to auto loans, with different loan terms and interest rates depending on the lender.

What should I do before I look into motorcycle loans?

First, check and optimize your credit score. The better your credit score, the more likely you are to receive better rates and more options. If your credit score could use a boost, consider waiting a few months to apply for motorcycle loans. In the meantime, pay down your debt, prioritize on-time payments, and check your credit report for errors. There are many ways to improve your credit score.

Additionally, determine your budget. Plan for factors beyond the down payment and monthly payment, such as insurance, gas, storage, protective gear, maintenance, and so on.

Where can I get motorcycle loans?

There are several options for financing your motorcycle. For a traditional motorcycle loan, a local credit union may be your best option. Because credit unions are member-owned, they tend to offer lower rates than large banks. Each credit union has its own requirements for membership—such as an affiliation with a profession or community, but some, like MIT Federal Credit Union, are open to everyone.

Motorcycle loans can also come directly from a dealership. While getting your loan and bike in the same transaction can simplify the process, the rates will often be higher. To make the process smoother, get preapproved for a loan before you begin shopping. This will give you an edge at the dealership as a serious buyer in the negotiation process.

What should I look for in motorcycle loans?

Firstly, consider the interest rate or APR (Annual Percentage Rate). The lower the rate, the less interest you’ll pay over the life of the loan.

Secondly, consider the repayment terms—the number of months you’ll have to pay back the loan. While a longer repayment period will result in lower monthly payments, you’ll spend more over the life of a loan compared to a shorter repayment period.

Lastly, consider how much of a down payment you want to make. Keep in mind that while a lower down payment may be more convenient initially, it will result in higher monthly payments.

How do motorcycle loans work?

When you’ve found the best lender for your motorcycle loan, you can fill out a formal application online. Among other details, you’ll provide the vehicle type, make, and model, and estimated purchase price.

When you receive the loan money, you can use it to pay the dealership and receive your bike. With a lender like a bank or credit union, you’ll pay them directly in monthly installments after the down payment rather than the dealership.

Explore motorcycle loans at MIT Federal Credit Union

For a low, fixed rate and your choice of term based on your credit score, MIT FCU is the place for you. Adventure is more accessible with money-saving features, including no processing fees, no service fees, and no prepayment penalties. Our team is here to help you find the right motorcycle loan. Apply online, or call and visit a branch today.

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