Maybe you’ve imagined the rush of navigating wide-open country roads on two wheels. You have motorcycle catalogs stacked on your coffee table and local dealerships bookmarked on your smartphone. Before you head to the dealer, now is the time to make sure you have your finances in order.
You’ll need to determine how much you want to spend while considering other costs such as ongoing maintenance, insurance, licenses or storage fees. Make sure they fit your budget, so you can enjoy the ride without financial worry. Once you have a budget, you can determine how much you’d like to put toward the up-front payment. Knowing this could provide flexibility during the buying and financing process, and ultimately, lower the financed amount and monthly payments.
Your credit score is an important factor in determining the interest rate you receive for the loan. Generally speaking, a lower credit score results in a higher interest rate. Ideally, you should know your credit score before beginning the financing process. If your score needs to be improved, you could focus on a variety of factors that contribute to your credit score. These can include on-time bill payments, amount of debt load and length of credit history.
Loan sources can vary from banks, credit unions or even the motorcycle dealership. The loan type also varies but is typically secured by your titled motorcycle. Generally, the interest rate and monthly payments are fixed allowing you to maintain a predictable monthly payment schedule for the entire life of the loan. Other factors, including your debt-to-income (DTI) ratio, a calculation lenders use to help determine if you can afford another monthly payment, and age of the motorcycle may come into play when determining the financed amount.
