When looking to buy a new motorcycle with financing, many riders will spend their time focussing on motorbike loan interest rates, while overlooking one of the key factors in being offered the lowest rates – their credit score. Credit scores play a role in rate offers and the overall loan deal in two ways:- good credit scores are offered the best rates and potentially the best loan terms and conditions; and applying to multiple finance companies and banks for loan offers can negatively affect an individual’s credit score.
Understanding how credit profiles impact loan rates and offers can be an important first step in buying a new ride with the best loan. An individual’s credit profile contains details of their payment history, the loans they have and have had, the loan applications they have made and other information pertaining to their credit record.
A wide range of providers report credit activity to the Credit Reporting Agencies. These include phone companies, utilities providers, credit card providers, government departments and financial institutions. From this information, the agencies calculate the individual’s credit score or rating. This information is available to lenders to review when an individual applies for a loan.
Lenders review credit profiles to assess creditworthiness and credit limits when assessing loan applications and when deciding the rate to offer, the loan limit to approve, and whether or not to approve the application at all. By assessing their credit profile and addressing issues where possible, buyers may place themselves in a far better position to be offered the best motorcycle finance.
Connection Between Motorbike Loan Interest Rates and Credit Scores
Credit scores, ratings and history are highly significant when applying for any form of credit. Banks and finance companies review credit profiles to ascertain the ‘risk factor’ of the loan applicant. The risk of the individual meeting the repayment obligations. Poor scores are assessed as higher risk and good scores as a lower risk of defaulting on the loan repayments.
This assessment then determines the interest rate that a lender offers to the applicant. The lower the credit score the higher the interest rate and the higher the score, the lower the interest rate. Lenders highlight this aspect when advertising rates on their loan products. The rate displayed will typically note that it is for good credit rating applications.
Credit scores can also have an impact on other aspects of the loan offer. In reviewing credit histories, lenders are assessing creditworthiness. The result of this assessment is the loan capacity for the individual. That is, how much credit the lender considers this individual should be offered – the credit or loan limit.
A poor history may result in a lower loan limit being approved than the buyer is wanting. This may mean they have to pay a larger downpayment. A scenario which may be a challenge and thwart plans for a no deposit bike loan. Some applicants may be requested to provide extra security or collateral, in addition to the machine. This may also prove challenging for individuals with low assets.
Then comes the loan term – the amount of time to repay the funding. The loan amount, in conjunction with the total borrowed, determines how much is to be repaid each month. Repayments can be critical to individual budgets and for some buyers, may be the key deciding factors as to whether or not buying a new ride is a workable proposition.
Lenders look at the overall credit position to determine the term, loan amount and the rate. There are variations in the criteria that lenders use to assess applications. Finding the lender that best suits an individual’s credit profile, that is, will make the best offer, can be essential to obtaining the best outcomes. We assist through our large lender base. Finding customers the lenders that do suit their profiles. An important step towards the best motorcycle rates and loans.
To check your score and history prior to applying for finance, refer to the guidance offered at the Moneysmart website.
How Multiple Quotes Can Affect Motorbike Loan Interest Rates Offers
So there are many variations out there and buyers think they are doing the right thing by requesting multiple quotes and submitting multiple loan applications to find the best offer. Wrong. Financial institutions report applications to the Credit Reporting Agencies and they are listed on the credit profile. Multiple applications for the same loan can be seen in a negative light by lenders. Leading to a less than the best loan offer.
Finding the right lender and the best rates without impacting credit profiles can easily be achieved by taking advantage of our broker services. When we source the best rates from across multiple lenders it does not impact the individual’s credit score.
Securing the Best Motorbike Loan Interest Rates
By utilising our specialist broker services, buyers can have the best rates and loans sourced for them. Experts in finance, Jade Bike Loans sources the best motorbike loan interest rates for varying credit score buyers from across a vast lending market.
Using our services is easy – request a quote and apply online or by phone. If looking for the best loan deal, don’t overlook your credit score and don’t overlook the services available to achieve the loan to acquire your new ride.
For the best motorbike loan interest rates, connect with Jade Bike Loans on 1300 000 003.
DISCLAIMER: IN REGARD TO ANY ERRORS OR MISREPRESENTATIONS IN THIS MATERIAL, NO LIABILITY IS ACCEPTED. THE DETAILS, CONTENT AND DATA IS 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.
