Young riders that are keen to get their bike licence and purchase their first motorbike face somewhat of a dilemma. The eligible age to get a motorbike licence does not correspond to the age that individuals can be eligible for finance such as a motorbike loan. The eligible age for a licence may vary from state to state. Those keen to apply can check their local regulations.
But the eligible age for loans is determined at a Federal, national level and is 18. Those over 18 but still relatively young and yet to establish a strong credit record may also face issues when applying for finance.
The Australian Securities and Investment Commission, ASIC, is the body which governs consumer finance across Australia. All lenders, including Jade Bike Loans and any motorbike dealers that offer finance, must abide by ASIC regulations.
Under ASIC Consumer Finance regulations, applicants for consumer finance, such as motorbike loans, must be over the age of 18. To clarify one key issue, this doesn’t mean that under 18s cannot own a motorcycle and register the bike in their name, subject of course to state regulations re rego. It means they are not eligible to be approved for a loan to purchase a motorcycle.
For young riders, there are options they can consider to secure their own motorcycle.
Secured Motorbike Loan Conditions
- Don’t need a motorbike licence to be eligible to apply for a motorbike loan.
- Applicants need to be over the age of 18.
- The credit profile of the applicant is considered.
- Employment both current and history are taken into account.
- Financial status is considered and the ability to repay the loan is assessed.
- Where a lender does not consider the applicant has the ability to repay the loan or is not deemed creditworthy, the application may be rejected.
- Under ASIC regulations, lenders cannot offer consumer loans which are not suitable for the applicant.
- Individual applicants need to meet the criteria of the lender.
- Application criteria can vary across the lending market.
Young Rider Options
Under 18s can of course look at saving up and paying cash for their first motorcycle or do what many young people do, ask their parents to buy them one. Individuals over the age of 18 are eligible to apply for a motorbike loan. But not all banks and lenders will be open to approving loans to individuals in the ‘over 18 but young’ age range.
It’s difficult to place an actual age range on this aspect because the application will be subject to an assessment of the individual’s credit profile and their current financial position. Those that have been fully-employed for several years since leaving school may be in an ideal position to be made an attractive and cheap motorbike loan offer. While others may not be in such a position.
Lenders may put conditions on loans for young people which can include limiting the amount of the loan and requesting additional security or requesting a guarantor for the loan. Younger riders that are looking to purchase a motorcycle with finance can consider the option of a guarantor for their finance on a Secured Motorbike Loan.
A guarantor on a loan must be over the age of 18 and approved by the lender. It is quite a responsibility and one which should be well investigated by the person being asked.
The Guarantor Process
A guarantor for a loan is a person who is guaranteeing that loan. The loan is taken out by the borrower and the guarantor guarantees the loan. In simple terms, that means, the guarantor is responsible for repaying the loan in the event that the borrower is unable to meet their obligations.
Depending on at what stage the borrower defaults or is unable to meet the repayments, this could mean the guarantor has to pay the entire amount of the loan to the lender. Guarantors should fully understand all the details in the contract and be fully aware of the risks. Individuals that have been asked to go guarantor may seek advice from a financial consultant or a counsellor. Free services are available for this advice. Refer to Moneysmart for details.
The considerations involved with going guarantor include:-
- The loan guarantee may impact the ability to source your own loans as the loan may be considered as a liability on the personal balance sheet. This information must be revealed when applying for a loan.
- Having sufficient funds available to repay the loan if required. If not, property and assets may be compromised and your credit profile. The lender may request security from the guarantor against the loan.
- Damage to relationships when the borrower is not in a position to make their repayments. Even family and the closest friends can fall out over finance.
An alternative to actually going guarantor for a family member or friend may be to offer a financial contribution to the purchase of the motorbike. This may reduce the amount that they require for the loan and negate the need for a guarantor.
Assistance from a Finance Broker
Young people are most welcome to use our finance broker services to assist in sourcing a workable motorcycle loan. Our consultants will cover off on the options available to suit individuals and proceed to source quotes and handle the entire loan process.
Young riders may face hurdles when applying for a motorcycle loan, but with our professional assistance, a workable outcome may be very possible.
To discuss the options for motorbike loans for younger applicants 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.
