Looking for your next motorbike: is it a dream or a nightmare? You’ve been shopping for the latest motorbike model and finally found one that fits your budget. But now comes the difficult part – how do you pay for it? As with all major purchases, there are several options to consider.
Assess your financial situation
The first thing you’ll need to figure out is whether you have the cash on hand to pay for your motorbike outright and if this is something you’re willing to do. If not, you’ll need to investigate your motorcycle finance options. Luckily, there are plenty of options out there!
The first step is to shop around. Many of us assume that we’ll need to go to a bank or motorcycle dealership for our motorbike finance, but this isn’t the only option. You can also try looking online to find your best rates and options. Comparison websites are a great place to head to, as they’ll show you all of your eligible loan options in one place (just make sure they’re not running a hard credit check when they generate quotes for you!).
Understand your loan options
Once you’ve found a few suitable comparison sites, it’s time to take a closer look at the various kinds of motorbike finance options available and weigh up your options. Your key choices will be:
This is where you use an item (such as your motorbike) as security against the loan. Usually secured loans come with lower interest rates than unsecured loans, so they can work out cheaper. However, if you choose to default on your repayments, you could lose both the motorbike and any savings achieved using it as security.
This option puts no assets at risk – however, this also means your interest rate will be higher. These loans usually come with a monthly repayment schedule. If you don’t keep up with your payments, you may lose both the motorbike and any savings achieved using it as security.
This is a simple option if you have an existing credit card with an available balance, but be aware that some cards charge extremely high-interest rates.
These are great for larger purchases, but you’ll need to meet certain requirements before being approved. And of course, there’s the matter of paying back your loan – many personal loans can be paid back over a period of time, but you might find it difficult to secure affordable terms for your repayments.
Use a loan calculator
Using a loan calculator, like the Driva motorcycle finance calculator, to get an idea of how much you might expect to pay is helpful so that you have a benchmark in mind of what your loan could cost in monthly repayments.
Check your credit score and history
Before you go ahead and buy your motorbike, check your credit score. Having a good credit record will make it much easier for you to qualify for the best terms when it comes time to apply for finance. Additionally, if there are any errors on your credit file, you should get them fixed before applying for any loans.