Motorcycle loan

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A motorcycle loan is a form of consumer credit used to purchase a motorcycle. Typically the interest rate charged on a motorcycle loan is based on the credit applicant’s past credit history and debt to income ratio. Motorcycle loans are normally harder to get approved for than an automotive loan and have a bit less favorable terms and interest rates than the standard automotive loan. Motorcycle loans are sometimes referred to as motorcycle financing.

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[edit] History

Motorcycle loans became highly popular in the early 1980’s as the rising price of motorcycles gave consumers a reason to finance their motorcycle purchase and lenders such as GE Capital entered the motorcycle financing market providing motorcycle dealers an easy source to issue motorcycle loans to consumers. Somewhere in the late 1980s motorcycle financing exploded and other large financing sources such as HSBC Retail Services (formerly known as Household Retail Services), credit unions, local banks and motorcycle manufacturers poured into the market providing motorcycle dealers with ample sources to get their customers financed with a motorcycle loan.

During the early years of motorcycle loans, fixed rate installment loans were the main type of loan offered by motorcycle lenders. However, as motorcycle lenders and manufacturers got more creative in the 1990s private label credit card motorcycle loans became very popular.

Today, motorcycle loans are easily available through a variety of sources including motorcycle dealers, national and local banks, credit unions, motorcycle manufacturers and even on the internet. Technology automation has made the motorcycle financing process very efficient and consumers can normally purchase a new motorcycle with a loan in as little as 30 minutes.

[edit] Types Of Motorcycle Loans

[edit] Installment

A motorcycle installment loan is a loan with a fixed payment for a specified term. Installment loans are very common with motorcycle dealerships, local banks, credit unions and motorcycle manufacturers. Installment loans are typically 60 months or less however recent trends have seen some motorcycle lenders extending installment motorcycle loans as long as 7 years. The interest rate on an installment loan is normally based on the consumer’s credit history. Installment motorcycle loans are secured loans meaning the motorcycle lender will have a lien or security interest on/in the motorcycle.

[edit] Private Label Credit Card

Private label credit card motorcycle loans normally have variable payment schedules and terms. These types of loans are highly popular through motorcycle dealerships where manufacturers like Honda, Suzuki,Ducati Kawasaki, and Yamaha offer motorcycle financing on their private label credit cards. These private label credit cards are similar to a department store credit card but can be secured or unsecured depending on the motorcycle lender’s requirement. Typically private label credit card motorcycle loans offer much more flexible payment options than an installment motorcycle loan.

[edit] Places To Get A Motorcycle Loan

[edit] Motorcycle Dealership

Motorcycle dealerships are highly common in helping consumers get a motorcycle loan. Motorcycle dealerships typically work with a variety of motorcycle lenders to help consumers get a motorcycle loan. Several of the most common lenders used by dealerships include manufactures such as Honda Financial Services, Harley Davidson Financial Services, and large financial institutions such as GE Capital and HSBC Retail Services who are the primary outside providers of motorcycle loans though dealers.

[edit] National & Local Banks And Credit Unions

Banks and credit unions have become a very competitive source for motorcycle loans. These financial institutions typically only offer installment motorcycle loans and can sometimes be more restrictive than other sources.

[edit] Internet

With advancement in technology many banks have expanded into offering motorcycle loans over the internet. These services are normally fairly quick and can offer a way for consumer to shop around to find a good interest rate. Most internet motorcycle loans are installment loans. Online credit unions are also an excellent alternative for motorcycle financing.