You probably know bikes inside out. Know the makes and models and probably the exact purchase price of many. But not everyone is as knowledgeable or up to speed in financial literacy. Wait, don't click off, this is important if you're planning on applying for motorbike finance. We're not suggesting that anyone applying for a loan needs high level maths or an accounting degree. Financial literacy is essentially understanding and knowing how to use financial skills such as managing finances, investing and budgeting around personal money issues. Knowing how to best utilise your financial resources to achieve your life goals.
The emergence of digital payment methods especially the huge take-up of tap and go technologies, can distance a person from their finances. When you operate with cash, it’s immediately obvious when you run out of readies – your wallet is empty! A different mindset and awareness need to come into play when paying all your expenses digitally.
Applying for a motorcycle loan involves taking on what is known as consumer finance or consumer credit. Taking out a loan to make a major purchase such as a motorbike is not something everyone does on a regular basis. Some people may only have a handful of loans over their lifetime with applications years apart. So it’s not an area that you would necessarily be expected to be across the detail.
Increasing the knowledge and awareness around your own finances can lead to benefits in regard to your upcoming motorcycle loan. Many people engage a financial advisor to provide them with professional advice but there are steps you can do yourself.
We’re providing a brief overview of some salient points with tips on getting up to speed with financial literacy in respect to your Jade motorbike loan.
Consumer Loan Basics
Think of consumer finance and your motorcycle loan as having two sides to the story. There’s our lender side and there’s your borrower side. As Licensed Credit Providers, Jade Bike Loans adheres to the Responsible Lender Guidelines as set out by ASIC and your consultant will explain the consumer credit law aspects and provide you with relevant information.
There are currently proposed changes to the Consumer Credit Laws before the Australian Parliament and if passed, may shift the onus from the lender to borrower when assessing applications.
Here are some basic terms and concepts that you should know:-
- Capital is the amount you are borrowing.
- Interest is charged on the capital and is the lender’s ‘price’ so to speak for loaning you the funds. Consumer loans show an advertised rate and a comparison interest rate. Refer to our bike loan interest rates page for full details on the difference.
- Lenders also have fees and charges which vary but a loan establishment fee is a fairly standard starting point.
- Security is the motorbike. With a secured bike loan, the bike is put up as security or collateral against the loan. While the lender holds security over the loan, the borrower is fully responsible for ownership costs such as registration, insurance etc.
- Loan term is the amount of time you have to pay off the loan.
- Repayments are the amount you pay, usually monthly.
- Default is when the borrower fails to make the repayments. If a borrower defaults on the loan, as the bike is held as ‘security’ the lender has the right to repossess and sell the bike to recoup monies outstanding.
- Insurance is required when buying a motorcycle with finance. You will be required to give the lender details of the insurance policy and update this each year when renewed.
At Jade Bike Loans, we offer a full service loan process with your motorbike loan broker handling the process for you from sourcing the cheapest quote, to processing your application with the lender and final settlement, which involves the lender paying the dealer for the bike.
The Borrower’s Side of the Bike Loan
Now for your side of the process and where financial literacy comes into significance. Understanding where your money goes and managing your personal cash flow and debts can provide you with greater confidence in committing to a specific bike loan repayment level.
- When applying for the loan you will be asked to provide details of your income, your regular expenses and your assets and debts. Being across your finances may allow you faster access to that information and speed up the loan application process.
- Having a budget actually written down can bring it all into focus and provide you with greater insight into the loan repayment level that you would like your Jade consultant to source for you.
- Checking credit card statements and bank statements when they arrive is a key aspect of financial literacy. Ensure there are no errors or suspicious withdrawals and regularly assess your options in regard to account fees. You may be able to save by switching accounts.
- Lenders will assess an applicant’s credit history so making regular payments on time is very important. Utility providers and even landlords and real estate agents can make reports to credit reporting agencies about overdue payments of bills and rent. Keeping existing payments on track might just be a case of ensuring you have the correct amount in the correct account on the date the direct debit is due.
Securing the Ideal Motorbike Loan
Being up to speed with your financial literacy can assist you when briefing your Jade consultant to source you the ideal loan. That ideal loan will be the one that works with your budget. Your consultant will be sourcing you the cheapest loan and negotiating to achieve that ideal repayment level. Use our online motorcycle loan calculator to help figure out your bike finance options.
So spending a bit of time on your financial matters can be rewarded with securing that ideal motorbike loan and ownership of that ideal motorbike.
To apply for finance, call 1300 000 003
DISCLAIMER: IN REGARD TO ANY ERRORS OR MISREPRESENTATIONS IN THIS MATERIAL, NO LIABILITY IS ACCEPTED. THE DETAILS, CONTENT AND DATA ARE PRESENTED PURELY FOR GENERAL INFORMATIONAL PURPOSES FOR MOTORBIKE BUYERS AND THOSE SEEKING MOTORCYCLE LOANS. THIS IS NOT INENDED AS THE SOLE SOURCE OF INFORMATION FOR FINANCIAL DECISIONS. IF SPECIFIC ADVICE IS REQUIRED AROUND FINANCIAL DECISIONS, READERS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
