Motorcycle loans – Cruise the road with an up to speed bike
Owning a motorcycle allows you to dabble into the culture, enjoy the open road, or chase a few thrills. But, you might need help covering the costs before you can straddle the rider’s seat.
BestFind delivers the best info on motorbike loans in Australia below, complete with tips on how to get the perfect deal and application guidelines.
What is motorbike finance?
If you need to buy a motorcycle, but your savings still need some time to grow, a motorcycle loan will quickly make up the difference. You then clear the debt steadily within a specified period of up to 7 years. As with most borrowing agreements, you also have to settle up on your interest payments and loan charges and fees.
When financing your two-wheel ride, you can generally take your pick of two options from:
- Secured motorbike loans. Motorcycle loans tend to model car loans closely in that the majority use the purchased asset as security to safeguard full repayment. That means if for some reason, you can’t clear your balance with the lender, they’ll grab onto the motorcycle instead. Here the lender will have hopes of recovering what you owe by selling off the bike. Therefore, secured motorbike loans usually tailor the amount you can borrow to the value of your motorbike.
- Unsecured motorbike loans. Not using the motorbike as collateral bumps up the lender’s risk since they can’t jump to repossess if you skip repayments. As a result, unsecured finance usually comes at a higher cost than secured finance. But on the better side, you can expect to borrow a lump sum that’s not restricted by the motorcycle’s value.
What type of motorcycle can you buy with a motorbike loan?
Motorcycles come in all shapes and sizes, and popular models across the board include Yamaha, Honda, Kawasaki, Harley-Davidson, Suzuki, and BMW. Remember, whatever you’ve got your sights set on, your final selection should factor in experience level, what you would use the bike for, and cost. Start your search for the perfect motorbike by looking up the following types and designs:
- Standard or naked bikes. These drive like a sports bike but without the bells and whistles of extra bodywork. They’re great for general purpose use but offer little protection from wind blasts.
- Tourers. As the name suggests, a touring bike will set you up nicely for a long ride. They have all the trimmings that foster comfort, including large windscreens, backrests, and heated grips. However, they often have a hefty price tag and size.
- Sportbikes. Although not the most comfortable bikes, these two-wheelers have powerful engines built for high-performance speed, acceleration, and braking.
- Cruisers. These typically represent cool-style bike riding with a laid-back attitude. They generally work well on paved roads, mainly due to their low ground clearance.
- Off-road bikes. When going off-road, your pickings include dirt bikes, Enduro bikes, and Motorcross bikes. These are lightweight and designed for bumpy rides over grass, sand, and dirt.
- Dual-purpose and adventure bikes. Be ready to cruise the tarmac or go off-road with both these types of two-wheel rides.
- Scooters. These have a small and lightweight signature look and usually make for an economical commute around town.
What’s the real cost of motorcycle ownership?
Australian lenders usually advertise loan amounts ranging from $2,000 to $100,000. You’ll likely borrow an amount closer to the lower limit since motorbikes pull less from your pocket than cars. But, you might want to consider the overall cost of motorbike ownership to ensure your budget has enough room:
- The motorbike. Motorcycle prices are a wild mix but expect to shell out anywhere between $5,000 and $50,000.
- Gear. If you’re following the rules of ATGATT (All The Gear All The Time), then you’re generally looking at buying a full-face helmet, goggles, earplugs, motor jacket and pants, gloves, boots, and vests.
- Insurance. You’ll also need cover for your motorbike in case of unforeseen circumstances. Starting from bare-bones and moving to all-inclusive, the main types of insurance available are Compulsory Third-Party, Third-Party Property Damage, Third Party, Fire and Theft, and finally, Comprehensive insurance.
- Operational costs, service, and repair. These depend on how hard you plan to ride and whether you’re buying a new or used motorcycle.
Use BestFind’s motorbike loan calculator
Besides calculating the ‘true’ cost of motorbike ownership, you also need to zero in on the best loan repayment. Our motorbike loan repayments calculator helps to keep things from getting too out of hand for your budget. To work this easy-to-use tool, simply drag the sliders to enter your preferred amount and term.
When you click, “Calculate Repayment” you’ll immediately get to see monthly repayment estimates from various Australian lenders in the comparison table above. This, in turn, gives you fair warning about the state of your budget for the duration of your term.
Also, when calculating a budget-friendly repayment, remember that choosing a longer term means you pile on the debt as interest and other ongoing charges add up. On the other hand, paying off everything quickly is one of the easiest ways to trim borrowing costs.
What other factors should you look at when comparing motorbike loans?
Comparing motorbike loans is all about finding an affordable loan with flexible features outfitted for your needs. Run down the following checklist to ensure you secure the best deal on the table:
- Interest/advertised rate. To begin with, choose between a fixed or variable rate. Fixed-rate motorcycle loans have steady interest rates, while variable rate loans have interest rates that typically fluctuate to mirror Reserve Bank cash rates. Overall, your interest rate should be as low as possible to ensure you don’t run up steep finance costs.
- Comparison rate. You might end up with a bigger finance bill if you don’t check out the comparison rate. That’s because this percentage takes stock of the interest rate plus standard loan fees. Therefore, looking at the advertised rate and the comparison rate helps you uncover low-interest deals with expensive charges.
- Loan fees and charges. To get a better handle on the total cost of the loan, it’s always best to dig into the fine print. You’ll find that most lenders charge upfront establishment fees, ongoing monthly service fees, and late payment fees. The lower the charges, the less you’ll have to part with.
- Repayment features. Some lenders often go out of their way to offer opportunities that make the repayment process easier. For instance, you can pack in extra repayments without paying early repayment fees to prevent more interest from kicking in. With a redraw facility, your extra repayments can bounce back to you anytime you need them.
- Borrowing and loan term limits. Find out if the lender will allow you to borrow as much as you need or extra to cover related costs. Also, check to see if you’ve got as much time as you need to offload your debt.
Pros of motorcycle loans
Why should you use a bike loan? Check out a few reasons that make it a sensible option:
- You spread the cost of your bike. A cheap motorbike will still cost you thousands of dollars, so paying this off in bite-sized chunks ensures a smoother ride.
- You hit the road sooner. Your savings may take too long to mature. A motorcycle loan ensures you don’t have to pass up on the thrill and freedom of open-road rides for longer than is necessary.
- More flexibility with the type of motorcycles. It’s easier to finance most types of motorcycle brands, styles, and sizes.
Cons of motorcycle loans
- You’re more likely to lose your motorcycle if you default. Since most motorbike loans are secured, you’ll lose ownership if you fall behind on your repayments.
- It’s more difficult to finance a used bike. Secured loans might also limit your motorcycle picks to only the newest, pricier models.
How to apply for a motorbike loan
First, compare motorcycle loans using the comparison table above. Once you’ve found a deal that looks inviting, click “Go to Site.” Next, settle in on the lender’s website to complete and submit your application. Besides being over the age of 18 and having a good credit score, you’ll generally need the following information and documents at the ready:
- Valid Australian ID, such as passport or driver’s licence
- Recent copies of bank statements and payslips for proof of income
- Employment details
- Other financial details about your assets, debts, and liabilities
- Details of the bike you’re about to purchase
Motorbike loans FAQ
How do I choose the perfect motorcycle for myself?
A common but important tip is to take out the bike for a spin before buying. A test drive allows you to experience how the bike handles in terms of acceleration, comfort, and ease of use. Also, make sure the bike is street legal in your state when it comes to licence type, engine capacity, and other features.
Can I still get a motorbike loan if I have bad credit?
Yes, finding a bad credit loan is not an impossible task as long as you’re willing to step up to higher rates and charges.
I’m self-employed, can I still get a loan?
If you’re self-employed, you can still sign up for motorcycle finance as long as the lender can bank on your ability to repay. This, however, means you might have to provide more paperwork than is required for traditional employees.
What’s the difference between a motorbike car loan and a motorbike personal loan?
While you can use both finance types to buy a motorcycle, a personal loan is generally multi-purpose. For instance, you can also use it to pay for your holiday, wedding, renovation, or for debt consolidation. Car loans are only used for cars and other types of vehicles.
Can I get a pre-approval when financing my motorcycle purchase?
Yes, a pre-approval allows you to scope out two-wheelers while carrying more negotiating power. Whether you’re heading straight to the showroom floor, an auction, or seeing a private seller, you can quickly close the deal and start riding sooner.
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