Updated: Mar 18, 2024

How to Get a Personal Loan to Buy a Motorcycle

Learn how to get a personal loan to buy a motorcycle (new or used), including what you'll need to become approved for the lowest rates.

Written By Thomas (TJ) Porter

Finance Expert

Contents

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Buying a motorcycle can be a big commitment.

While they’re not as expensive as cars, motorcycles aren’t cheap.

It’s not surprising if you don’t have enough money in your bank account to pay for a motorcycle in cash.

And:

If you’re looking to buy a motorcycle on credit, you might consider applying for a personal loan to get the money to pay for it.

Personal loans are flexible financial tools that you can use for nearly any purpose, including buying a motorcycle.

Learn what you need to know about getting a personal loan to buy a motorcycle.

Know the Loan Terms

If you’re thinking about applying for a personal loan to buy a motorcycle, the first thing that you need to do is figure out the terms of the loan that you’re looking for.

Borrowing amounts

You need to figure out how much money you need to borrow to buy the motorcycle that you’re interested in.

Different lenders have different loan minimums and maximums, which can affect your choice of lender.

So:

Make sure that the lenders that you want to work with offer loans of the right size.

Repayment period

Once you’ve decided how much you need to borrow, it’s time to think about how long it will take to pay the loan back. This is known as the term of the loan.

Longer terms mean that it will take longer to pay off the debt but result in lower monthly payments. That can be good if your budget is tight.

Short terms result in higher monthly payments, but save you money in the long term, as they leave less time for interest to accrue.

Try to strike a balance between an affordable payment and a short loan term.

Speed of loan disbursement

The third thing to consider is when you need to close on the purchase. Some lenders take some time to disburse the money that you’re borrowing.

If you need to close on the deal tomorrow, that will affect your choice of lender.

Boost Your Credit Score

When you’re applying for any loan, including a personal loan, you should be thinking about your credit score.

Your credit score will play a large part in determining whether your application is approved or denied.

Your credit score also helps determine how expensive the loan will be. People with higher credit scores will pay less interest than those with a poor credit score.

Before you apply for a loan, you should understand how credit scores work and how you can improve yours.

How credit scores are calculated

Your credit score is a numerical indicator of your financial trustworthiness.

Scores range from a low of 300 to a high of 850, with higher scores being better.

Scores over 700 are considered good, while scores over 750 are excellent. You should aim to stay above those ranges.

Your credit score is calculated from five factors.

Payment history
Amounts owed
Length of Credit History
New Credit
Types of Credit Used

Of these factors, your payment history has the largest impact on your credit score.

Lenders mostly care about whether you’ll make your payments on time. Just one missed payment can wipe out months or years of good payments, so always pay your bills on time.

The amount that you owe is the second biggest factor in your credit score. The less you owe, the better your score will be.

Checking your credit report

If you want to check your credit score and see where you stand with regards to each credit score factor, you can request a free copy of your credit report.

The best place to do this is at AnnualCreditReport.com.

This website gives you an easy way to request a copy of your report from each of the three major credit bureaus. You can request a copy from each bureau once per year.

Getting a copy of your report can give you an idea of your chances of getting a loan, and help you figure out the best way to boost your credit score.

Improving Your Score

Before you apply for any loan, you should do what you can to improve your chances of qualifying for the loan.

The easiest way to do this is to take steps to improve your credit score.

Dispute errors

One of the most important strategies for improving your credit score is checking your credit report for errors.

It is surprisingly common to find something incorrect on your credit report.

If you’re being blamed for missed payments that you didn’t miss, or having large loans that aren’t yours showing on your report, that can have a major impact on your credit score.

Request a copy of your credit report and examine it closely to make sure that everything on the report is correct.

If you notice an error, report it.

Each bureau will have its own process and requirements for disputing errors.

In general, when you report an error, such as a missed payment, you should try to have some documentation that can prove your side of the story.

For example, a copy of your statement or a canceled check showing that you paid the bill can help show that you didn’t miss a payment.

If one bureau’s report has an error, it’s worth checking every report to make sure that all of your reports are accurate.

Clearing up errors can give your score a big boost, making it much easier to qualify for loans.

Pay down balances

The amount that you owe has the second largest impact on your credit score, but it’s one of the easiest factors to influence in the short term.

If you’re able to, send some extra money to your loan payments in the months leading up to applying for a new loan.

The less you owe at the time you submit your application, the better your chances will be. Also stop using your credit cards in the month or two ahead of your application, as the lower reported balance can help.

Check Your Rates

Before you go through with the full application for a loan, you should check the rates that you can get from each lender.

Most lenders will have some type of process where you can provide basic information and an estimated credit score and the lender will give you an estimate of the interest rate that you’ll pay.

You want to pay the lowest interest rate possible, so knowing which lender is offering the best deal can be quite helpful.

The good news:

Generally, checking your rates won’t affect your credit score, so there’s no downside to doing so.

Compare with dealer financing

After you’ve checked your rates, you should compare the loan terms with the terms offered by the dealer.

Most motorcycle dealers offer dealer financing. Sometimes there will be perks for financing through the dealer, such as cash back or an interest rate discount.

If the dealer financing is a good deal, you won’t need to apply for a personal loan to buy your motorcycle.

Applying for a Personal Loan for Motorcycles

If you’re applying for a personal loan specifically to buy a motorcycle, here are some special considerations that you need to make.

Secured vs. unsecured

When you apply for the loan, you’ll have to decide between applying for a secured or unsecured loan.

Unsecured loans don’t require that you offer any collateral, but may be more difficult to qualify for. Unsecured loans might also charge higher interest rates to compensate for the lender’s increased risk.

A secured loan requires that you provide some form of collateral for the loan, but the good news is that your new motorcycle can function as collateral.

Pros and Cons of Unsecured Loans vs. Secured Loans

		Unsecured Loans			Secured Loans
Pros		Great option if you are trying to consolidate existing debts Does not require any kind of collateral so there is less risk for you Usually only takes at most a few days to receive funds	Pros		Easier to qualify for if you have lower credit and/or lower income Often lower interest rate than unsecured loans Typically can borrow a larger amount
Cons		Interest rates can be higher than secured loans Harder to qualify for Lower lending limits	Cons		You put your own assets on the line so you're at risk to lose more Application process may take longer which could lead to more fees and longer waiting period If you use savings as collateral, that money becomes unavailable for the duration of the loan

You’ll need to work with the seller and lender to make sure everything is in order, but this can be a good way to secure a lower rate or qualify for a loan you might not be able to get otherwise.

Motorcycle as collateral

If you do opt for a secured personal loan, you’ll need to provide some information, such as the estimated price of the motorcycle, and the make and year of the motorcycle.

The amount that you can borrow will be tied to the value of the motorcycle, so you might need to provide a down payment.

If you’re buying the motorcycle used, this can complicate matters somewhat, as the value of used motorcycles is variable.

You might want to have an independent person appraise the motorcycle so that the lender knows that the motorcycle is sufficient collateral for the loan.

You’ll also have to make sure that you buy the motorcycle for a reasonable price. If you’re paying a lot more than it’s worth, the lender might not think that the motorcycle is sufficient collateral.

Conclusion

Buying a motorcycle is exciting, but they’re not cheap.

If you have to apply for a loan to buy a motorcycle, you might want to consider comparing personal loans to the dealer’s financing offers.

Shopping around will help you find the best deal possible.

About the author Thomas (TJ) Porter

TJ Porter has in-depth experience in reviewing financial products such as savings accounts, credit cards, and brokerages, writing how-tos, and answering financial questions. He has also contributed to publications and companies such as Investment Zen and Echo Fox. He aims to provide actionable advice that can help readers better their financial lives. Education: B.S. in Business Administration, Concentration in Information Systems from Northeastern University.

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