Do you dream of becoming a motorcycle owner or would you like to replace your current machine with a larger, faster or more unique model? So, an Motorcycle loan can be something for you.
No matter what your dreams are, you’ll find the money for the purchase of your dream motorcycle. With an Motorcycle loan, you can pick up the funding from a loan provider to realize your dream and get started with your motorcycle adventure.
The primary feature of an Motorcycle loan is that the loan is specifically intended for the purchase of motorcycle. You can not go out and borrow an Motorcycle loan then use it on renovating the kitchen, a trip abroad or the like.
If you want more flexibility regarding the choice of the things you want to spend your loan on (perhaps beyond the motorcycle), you should investigate the possibilities for a consumer loan instead. In some cases, this may be cheaper than a decided Motorcycle loan.
In this guide, we will come to a closer look at many of the most important issues you may have in connection with the selection of Motorcycle loans.
If you dream of becoming a motorcycle owner, then an Motorcycle loan may be something for you.
How can I fund my Motorcycle?
If you do not have the necessary capital in your bank account, you may need to find outside financing.
Basically, you have 2 choices regarding Motorcycle loans: respectively. a dedicated Motorcycle loan or a consumer loan. Which solution is best for you depends entirely on you, your personality and your situation.
An Motorcycle loan is a loan where the money is specifically intended or dedicated to the financing of your new motorcycle. The loan therefore reminds much of, for example, a car loan , a boat loan or even a mortgage .
An Motorcycle loan can therefore also be cheaper than a consumer loan, as the lender has a security in the motorcycle itself, if you can not maintain the installment on your debt. This gives the lender greater security, resulting in more flexibility and cheaper prices for you.
On the other hand, a consumer loan may be necessary, among other things. If you want to buy an old or used motorcycle that has fallen a lot in value. In that case, it is not certain that various lenders or banks want to lend you the money as they run a greater risk.
A consumer loan may also be applicable if your selected loan provider requires a payment for the loan and you do not have the money in your account.
Once you have found the cheapest deals through the banks, take a check in our loan calculator for consumer loans . Here you can easily compare your offers on Motorcycle loans with ordinary consumer loans, thus finding the cheapest loan.
Which motorcycles can I buy with an Motorcycle loan?
There are basically no set rules that determine what kind of motorcycles you can buy with an Motorcycle loan.
It is thus subordinate to how old the machine is, which brand or model you want to buy.
Just be aware that many loan providers can set different requirements for the motorcycle if it is an Motorcycle loan and not a consumer loan. For example, Be that your Motorcycle must be at least 15 years old at the time of acquisition or that it will cost at least 50,000 kroner, as well as similar criteria.
If you choose to finance your new Motorcycle with a consumer loan, you will not be asked for the same type of motorcycle that you choose. One of the characteristics of a consumer loan is precisely that you decide on what you want to spend the money. Find our overview of consumer loans here . If you have a further need not to document your income, take a look at our list of loans without documentation .
Payout or not?
Whether or not you pay for the loan depends, among other things, on If you choose to find the funding from a consumer loan provider, at the bank or directly from the retailer.
Many dealers and banks can claim a payment on eg. 20% of the loan amount before letting you borrow the money for your Motorcycle. This is a matter of security and, as a rule, you can expect that the higher the payout, the cheaper the loan will be in terms of interest, fees, etc.
If you find it difficult to obtain the money for payment on the loan, you can always apply to borrow this money, however, from another loan provider. You can thus borrow a consumer loan to finance payment on the Motorcycle loan itself, either at the bank, at a private finance company or directly at the retailer.
What rate should I choose?
When choosing a loan provider and Motorcycle loan, it is relevant to decide on the choice of interest rate. You have to deal with yourself if you want a fixed rate or a variable rate.
In short, this choice is primarily about your risk-taking. Below you can read briefly about the difference between the two types of interest, so you can make your choice on a more informed basis:
- Fixed rate – If you choose a fixed interest rate on your Motorcycle loan, you are ensured that interest rate fluctuations do not occur during the term of the loan. This means that you pay the same fixed rate throughout the term of the loan, which provides stability in your private economy. On the other hand, a fixed rate will usually be slightly more expensive than a variable rate.
- Variable interest rate – If you choose a variable rate, the price may fluctuate as interest rates can go up and down during the term of the loan. This means that you can not know if the interest rate is the same throughout the term of the loan, and you may risk paying more in interest than at the fixed rate. You can also be lucky that the interest rate falls and thus becomes cheaper than the fixed rate.
Which Motorcycle loan should I choose?
As you said, it depends on your risk willingness which type of interest you should choose. But in addition, you should know that a fixed rate can best be answered in the best case if it is a long-term loan. This is to keep you from rising interest rates. If interest rates remain low, as it has done for the past many years, then the variable rate will be the cheapest. But if the interest rate suddenly rises, the loan at variable rate suddenly becomes expensive. Therefore, you are better hedged with a fixed rate.
Similarly, a variable rate will give the most meaning with a short maturity, as the risk of interest rate fluctuations in the market will be lower, the shorter the period is.
NOTE: You should seek individual market advice and interest rates with your bank advisor or lender if you choose to raise your Motorcycle loan through one of these.
Short or long term?
The maturity is the period in which you repay your Motorcycle loan to the creditor. The maturity has an effect on the price of the loan, and as a rule of thumb you can expect that the longer the maturity, the more expensive the loan will be overall.
However, a long maturity will also mean lower monthly benefits, which makes it more clear for you to find the place to deduct in your personal finances.
You should always choose a maturity as short as possible for you and your private economy. A shorter maturity means, first and foremost, that you get rid of the debt faster and thus get a cheaper loan overall.
But in addition, it is also extra important to get rid of the debt as quickly as possible, as in this case it is a motorcycle. Unlike, for example, a house where the value either falls very little or even rises, a motorcycle – like a car – often drops very quickly in value.
This means that if you want off your motorcycle sometime in the future and it has lost value, you will be left with a debt and no motorcycle if you have chosen for too long a term.
The choice of maturity duration also allows you to get more individual advice when you borrow from the bank or at a private lender with affiliated advisors.
Should I provide security for my Motorcycle loan?
Basically, there is no universal answer to this question. Whether you need to provide collateral for the loan depends entirely on your choice of financing partner and your private finance.
Do you want for example To borrow an Motorcycle loan from a private loan provider or at the bank, and if you have a strong and solid private economy, you may often be allowed to raise the loan without having to provide security for this.
If you have reversed a slightly poorer private economy or fluctuations in your income, loan providers may require a mortgage letter or the like, which you will write off the right to the motorcycle if you default on your debt.
Basically, you should do what you can to be allowed to raise a loan without asking for security – well to notice without the loan being too expensive. If you can not find a loan provider that will let you borrow without asking for security, do not let yourself go out of this.
You can still pursue your dream and borrow for your upcoming motorcycle; Just be aware that the loan provider can claim and sell the machine if you can not pay your monthly installments as agreed.
However, there are many opportunities to borrow without providing security. You can find loans without collateral here .