Bike loan approval isn’t always guaranteed and even then, you can’t be sure if you’re getting the lowest rates possible. But there are a few ways to strengthen your loan application and increase your chances of getting better rates. Follow these helpful tips when applying for a bike loan:
Boost credit score
Request a credit report from a reporting body such as Equifax, Experian, and illion. Check your credit report thoroughly and notify the credit bureau about any mistakes so they can be corrected immediately.
For those who don’t have the best credit score, you can improve it by paying any outstanding loan balances, making timely bill payments, and limiting your credit applications. If you’re not in a rush, take your time to build up your credit before applying for a bike loan.
A high credit score gives you an advantage when applying for a bike loan. A good credit score tells lenders you’re financially responsible and would be at a low risk of default. Usually, the better your credit score is, the higher your chances of getting a loan at low rates.
Make sure your finances are in order
Aside from your credit score, lenders also look at the borrower’s complete financial situation. Before applying for a bike loan, always review your finances and see if taking on more debt is possible. If you have a lot of outstanding debt, it’s best to pay it off sooner to give you a better debt-to-income ratio.
Also, think carefully about the amount of money you want to borrow. Choose a figure that is realistic in relation to your current financial situation. Your likelihood of getting approved for a bike loan is better if you stick to a budget that’s within your means.
Choose the vehicle wisely
The type of vehicle you choose can affect your bike loan’s rate and chances of approval. Lenders consider new or near-new vehicles a safer prospect to be used as security to support the loan for secured bike loans. It is harder to secure a loan for an older vehicle because of its low resale value.
Add a co-signer
If you don’t have the best credit score or credit history, adding a co-signer to your bike loan could improve your chances of approval. A co-signer will take responsibility for the debt in case the borrower misses out on payments or defaults on the loan. With a financially secure co-signer on your bike loan, lenders may see your application as less risky. Because of this, having a co-signer on your loan could also help you qualify for a bigger loan amount.
Shop around for the best deal
Find out what kind of bike loans are out there by shopping around. Don’t limit yourself to just one lender. Talk to different ones and compare the bike loan rates. This will help you figure out which bike finance matches your needs.
There are many important questions to ask a financier before deciding on a bike loan. Are there monthly admin fees? Ongoing bank fees? Penalties for early payout? Is the loan daily reducible? Can extra payments of any amount be made, and at any time?
Searching for the best bike loan out there can be a challenge. But the savings you get on your bike finance will be well worth the trouble.
Get help from Aussie Bike Loans
If you want an easier time getting the best bike loan possible, you can always get the help of Aussie Bike Loans. As a leading bike finance broker, we have an extensive network of lenders and dealerships for you to choose from. Just get in touch with our expert brokers and we’ll help you find a bike loan that’s tailor fit to your needs with low rates and great features. Get a quick quote today or call 1300 889 669.
FAQ
How to calculate a bike loan?
You can calculate your bike loan repayments using an online calculator. Simply input the loan amount you’d like to borrow to see an estimate of your monthly repayments. Using the bike loan calculator, you can adjust the information by adding a balloon payment or changing the repayment frequency.
What is a good interest rate on a bike loan?
Interest rates on bike loans vary depending on the lender. Some lenders may have rates between 6% to 8% (as of writing) while others have higher rates.
Take note, your credit score and financial standing can affect the rates on your bike loan. If you have a good credit score, you could get a low interest rate.
Are bike loans the same as car loans?
Bike loans work similarly to car loans as they’re both a type of personal loan used to purchase a vehicle. Bike loans differ only because they’re used exclusively for the purchase of motorcycles.
How can I lower the interest on my bike loan?
You can lower the amount of interest you pay over the life of your loan by putting down a deposit. Or you could change the frequency of your loan payments from monthly to weekly or fortnightly.
How can I reduce my bike loan fees?
Bike loan fees vary depending on the lender. Some lenders may have more while others don’t. If you want to reduce your bike loan fees, you need to find a lender that doesn’t impose a lot of hidden or additional fees on their bike loans. Aussie Bike Loans can help you find a lender with minimal loan fees and low rates!
Can I close a bike loan early?
You can close a bike loan early, but it could be subject to early termination fees. Talk to your lender to discuss any penalties or additional fees resulting from closing your loan before the term ends.
What credit score do you need to finance a bike?
Ideally, lenders prefer borrowers that have a credit score of 600 and above. You could still get bike finance with a lower credit score, but it could be more challenging.
What is the minimum down payment for a bike loan?
Bike loans, depending on the lender, don’t usually require any down payment. You can borrow the full cost of the bike without putting up a deposit.
