When requiring finance to purchase a motorcycle, most buyers will be seeking the cheapest loan available. A process which can requiring covering off on what is available across the lending market. When comparing motorbike loans there are a number of differences in loans that buyers should be noting in order to secure the loan that best suits their needs.
Bike loans can differ in structure, interest rate, conditions, loan amounts and terms. There can also be significant variations in the level of support and assistance provided to loan applicants by the lender. Assistance which, when provided, can save loan seekers a lot of time and hassle. To make the process of comparing loans easier, we’ve prepared this list of what to watch for when sourcing a motorbike loan.
Motorbike Lending Market
Loans to purchase motorcycles are offered through banks, finance companies, dealers and manufacturers and finance broker style lenders such as Jade Bike Loans. While Jade does offer a specifically titled Secured Bike Loan, not all lenders are as specific with the names of their loans.
Banks and finance companies that operate across multiple consumer goods markets may include bike loans in their general Personal Secured Loan category. Large banks and finance companies may have strict guidelines with little ability to negotiate on different aspects of the loan. Dealer or manufacturer finance can appear convenient as it is offered at the point of sale. But interest rates should be compared with other lenders, especially what we can offer.
Consumer loans can be secured and unsecured. Secured Loans use the bike as the guarantee against the loan while unsecured loans do not. A secured loan is the most common form of loan for most new bikes.
Motorcycle Categories
New and used bikes may attract different loan conditions. But, in general terms, all types of motorbikes can be financed. Some lenders may not offer loans for certain racing, vintage or collectible models.
If purchasing a bike to refurb or a vintage bike which does not meet the criteria for a Secured Bike Loan, speak with us about a quote for an Unsecured Personal Loan.
Interest Rate Variations
The interest rate is where loan seekers will see the greatest differences across the lending market. Lenders set their own rate for their own market categories based on a number of factors. That can start with the cash rate as set by the RBA and then include their costs and their interest in a particular market segment.
Lenders that are particularly involved in a certain sector such as we are in the motorbike lending market, can be far more competitive with loan interest rates.
Under Australian consumer finance laws, lenders must display an advertised Interest Rate and a Comparison Interest Rate. You’ll notice the Comparison Rate is always higher than the Interest Rate. That is because it is a rate calculated on a specific loan example and includes fees and charges. The difference between the Comparison and Advertised Rate may give an indication of the charges applied by a particular lender.
Interest rates can be fixed or variable. With consumer loans, a fixed rate will be set at that rate over the full length of the loan. A variable rate may change with changes in the cash rate or the lender’s own rates.
Jade Bike Loans offers a fixed rate on our Secured Bike Loans to provide certainty for our customers that their repayments will remain the same for the full loan term.
The interest rate offered on new and used bikes may differ. In many instances it will be the same, but requesting a quote for a loan on a second-hand motorbike rather than presuming it will be offered at the advertised rate can be wise.
Loan Amount
The total loan amount that lenders will approve can vary across the market. This may be determined by the loan guidelines of particular lenders and will take into account the credit profile of the loan applicant.
No Deposit Bike Loans are available through some lenders such as Jade for approved applicants. The ‘deposit’ reference is different from the deposit that the dealer or seller may ask you to put down to confirm the purchase. A no deposit loan means that the full purchase price of the bike is included in the loan amount.
Loan Term Limits
The term of the loan can be critical to some buyers as it essentially sets the repayment amount. The longer the term the lower the repayments and vice versa. Some lenders will have a maximum term and may not be negotiable on this element.
Buyers can seek other quotes and speak with Jade in regard to negotiating the loan term with our lenders to achieve the target monthly repayment desired.
Eligibility Criteria
To be eligible for a consumer loan, applicants must be over the age of 18 years. That is Australian law and will be consistent across the market. Under 18s looking to purchase a bike with finance may look to having someone go guarantor for their loan.
Lenders will have their own loan eligibility criteria.
Loan Conditions
Always read the fine print in a bike loan quote. Look for points such as exit or payout fees and if additional payments are permitted. If you plan to make extra payments and possibly pay off the loan early or trade in the bike, these fees may be significant.
Assistance and Lender Support
Support to assist customers with sourcing a loan is primarily provided by brokers such as Jade Bike Loans. We handle the entire process for our customers including sourcing the cheapest quote from across a vast section of the market and negotiating with our lenders on key matters.
This level and type of service and support is not typically offered by banks and finance companies. They provide quotes based on their loan only and process applications based on their guidelines and approval process.
Taking on a loan to purchase a motorbike is a major decision with numerous aspects to consider. Jade Bike Loans consultants assist with sourcing the cheapest loan and if customers require advice around their own financial situation we recommend they consult with their financial advisor.
For support and assistance in sourcing a bike loan contact Jade Bike Loans at 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 INTENDED AS THE SOLE SOURCE OF INFORMATION FOR FINANCIAL DECISIONS. IF SPECIFIC ADVICE IS REQUIRED AROUND FINANCIAL DECISIONS, READERS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
