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Motorcycle Loans
Many people who wouldn't usually be able to buy a motorcycle outright are starting to use vehicle and more specifically motorcycle loans from the web. It is a popular and easy to use finance method.
Many finance companies no longer require an application fee or a down payment. However to cut down on the cost of the loan it is possible to pay a deposit or down payment on the value of the motorcycle and let the loan cover the rest.
Your repayment schedule will usually range from 12-36 months, or longer depending on the size of the loan (up to 72 months). Many lenders use the simple interest method as a way to decide on what your monthly payment will be.
How your loan repayment is calculated
The amount of your payment allocated to interest is based on your unpaid principal balance, the interest rate on your loan and the number of days since your last payment. However the sooner you pay off your loan the less total interest you will have to pay back. So look for a finance company who doesn't have a prepayment penalty fee.
How large a loan to apply for
When applying for your loan, apply for an amount greater than what you think you will need, this will give you greater flexibility if an added surprise pops up. Also remember to apply for a loan that covers all costs. These costs may include tax, titles, licence, warrants, registration and lien filing fees, credit insurance and extended warranties or service contracts. Also remember to look at your monthly budget to see if you will be able to repay the loan comfortably and still have enough money for insurance on the motorcycle. Usually a larger loan will attract a lower interest or a preferred interest rate although there is no point getting a loan larger than you can afford to pay back.
Things to look for when choosing a loan provider include whether they have an application fee, if they require a down payment, low interest fees, whether you will be able to negotiate with cash, a fast loan process and response time, a choice on how you get to make your repayments (automatic payment or invoice), whether they can give you great customer service and access to your accounts at all times through the internet and telephone.
Buying your motorcycle with a loan rather than paying outright can help you build your credit rating making it easier in the future if you were to finance something else. It also helps if you can't afford to pay in one lump sum.
Refinancing your motorcycle loan
This can be a simple task and, in nearly all cases is a chance for you to save time and money. Because you are paying off an existing loan from a different lender it will have a lower APR (annual percentage rate / interest rate). Therefore monthly payments will be lower as the interest has dropped. This can allow you to pay off your loan sooner as installments would be smaller.
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