Motorcycles are more popular than ever because of their fuel efficiency and relatively low cost. A new car costs an average of $36,270, according to Kelley Blue Book. By contrast, you can buy a new motorcycle for under $5,000.
Motorcycles can be a budget-friendly form of transportation. However, finding a motorcycle loan can be difficult, and you might have to pursue financing alternatives.
How motorcycle loans differ from auto loans
Although the process of purchasing a motorcycle is basically the same as buying a car, your financing options are different. In many cases, you can’t take out an automobile loan to purchase a motorcycle. Instead, you have to take out a loan specifically designed for motorcycles, recreational vehicles, or specialty vehicles.
Motorcycle loans and specialty loans often have different terms than auto loans, including interest rates and repayment periods.
For example, as of April 6, 2018, you can qualify for a rate as low as 3.09% for a car loan from SunTrust. However, SunTrust classifies motorcycles as recreational vehicles; they’re in the same category as boats and motor homes. If you want to take out a motorcycle loan with SunTrust, the lowest rate you can get is 4.44%.
4 motorcycle loan options
Because motorcycle loans are so different from auto loans, it’s a good idea to consider multiple financing options to ensure you get the best deal.
Whether you’re buying a motorcycle as your primary source of transportation or simply want to ride on the weekends, there are four main types of financing available to you.
1. Manufacturer financing
Some manufacturers offer motorcycle loans directly to buyers. For example, Harley-Davidson partners with Eaglemark Savings Bank to offer loans. Depending on your credit history and income, you could qualify for a loan with a rate as low as 3.99%. In some cases, you might not even have to come up with a down payment.
It’s important to keep in mind that the lowest rates on manufacturer loans are usually reserved for select models or loans with short repayment terms. If you’re buying a lower-priced model or need a loan term longer than 36 months, you’ll likely get a higher rate.
2. Dealership financing
Another option is financing through a motorcycle dealership. Some dealerships offer loans from manufacturers, but they also might partner with third-party lenders. These lenders often have less rigorous standards than manufacturers, so you’re more likely to qualify for a loan if your credit isn’t great.
However, dealership loans can be more expensive than other financing options. You might end up paying more in interest than you would if you went with a loan from another source, such as a credit union.
3. Bank or credit union loans
You can save money at the dealership by securing financing on your own beforehand. Many banks and credit unions offer motorcycle loans and tend to have lower interest rates than dealerships.
If you have poor credit or don’t have an established credit history, going through a credit union could be a smart choice. Unlike banks, credit unions are nonprofit organizations and might have more relaxed requirements for loans. If you’re not a member of a credit union already, you can find one near you through MyCreditUnion.gov.
4. Personal loans
One other option to consider is taking out a personal loan to purchase your motorcycle.
Depending on your income and credit history, you could qualify for a loan with a rate as low as 4.98%. If you have excellent credit and can comfortably afford the monthly payments, you might be able to save money by opting for a personal loan.
On the other hand, if your credit isn’t steller, you might be more likely to qualify for a personal loan than a motorcycle loan. Some personal loan lenders will work with borrowers with credit scores as low as 580.
But the more relaxed credit standards mean personal loans can have much higher interest rates than other forms of financing. Although you might qualify for a loan, you could end up with an interest rate as high as 35.99%.
You might think the high rate is worth it if it helps you buy your dream vehicle, but it can cost you over time. For example, if you qualified for a 60-month loan from Harley-Davidson for $10,000 and had a 3.99% interest rate, you’d pay back a total of $11,047.
By contrast, if you took out a personal loan and qualified for a $10,000, 60-month loan at 35.99% interest, you’d pay back a staggering $21,676.
Also, personal loans typically have shorter repayment terms than motorcycle loans. With a motorcycle loan, you can have a repayment term as long as 84 months. With a personal loan, you’re often limited to just 60 months.
It’s a good idea to compare personal loan offers from multiple lenders to get the lowest rate. With Student Loan Hero, you can get quotes from multiple lenders at one time without affecting your credit score.
Buying your motorcycle
A motorcycle can be a fuel-efficient and cost-effective form of transportation. If you need help researching models and getting the best price at the dealership, check out our guide on how to buy a vehicle for more tips.
Interested in a personal loan?
Here are the top personal loan lenders of 2019!| Lender | APR Range | Loan Amount | |
|---|---|---|---|
1 Includes AutoPay discount. Important Disclosures for SoFi. SoFi Disclosures
2 Includes AutoPay discount. Important Disclosures for Payoff. Payoff Disclosures
3 Important Disclosures for FreedomPlus. FreedomPlus Disclosures
4 Important Disclosures for Citizens Bank. Citizens Bank Disclosures
5 Important Disclosures for LendingPoint. LendingPoint Disclosures
6 Important Disclosures for LendingClub. LendingClub DisclosuresAll loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105. †Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com **Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary. 7 Important Disclosures for Earnest. Earnest Disclosures
8 Important Disclosures for Avant. Avant Disclosures* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC. ** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33 * Important Disclosures for Upgrade Bank. Upgrade Bank Disclosures* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements. ** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days. |
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 | 5.74% – 16.99%1 | $5,000 - $100,000 | |
 | 7.54% – 35.99% | $1,000 - $50,000 | |
 | 7.99% – 35.89%* | $1,000 - $50,000 | |
 | 5.99% – 24.99%2 | $5,000 - $35,000 | |
 | 5.99% – 29.99%3 | $7,500 - $40,000 | |
 | 6.79% – 20.89%4 | $5,000 - $50,000 | |
 | 9.99% – 35.99%5 | $2,000 - $25,000 | |
 | 6.95% – 35.89%6 | $1,000 - $40,000 | |
 | 6.99% – 18.24%7 | $5,000 - $75,000 | |
 | 9.95% – 35.99%8 | $2,000 - $35,000 | |