If you’re in the market to buy a motor bike and source a great bike loan then it’s worth taking a few minutes to read this article and add to your knowledge bank on the fees, charges and other expenses you may encounter in the process.
As well as being fully committed to sourcing cheap bike loans for our customers, we’re all extremely keen to educate and inform on all aspects around the consumer lending space so our customers can make fully informed decisions. We don’t recommend this information replace specific financial advice on your individual circumstance which you should seek from your financial advisor, but we hope it is helpful.
We’re focussing on consumer finance, ie personal bike loans and explaining a range of costs, charges and fees and different terms associated with both buying a bike and taking out a loan.
Bike Loan Basics
In summary first, your bike loan includes the principal which is the amount you are borrowing; the interest charged on your bike loan; and fees and charges applied by the lender. These lender charges vary from lender to lender and across different loan categories and for individual applicants so we can’t quote specific amounts.
What we can assure you is that your Jade Bike Loans consultant will be using the full strength of our bargaining power to negotiate both the cheapest interest rate and the lowest fees etc on your bike loan. If you’re going alone on organising your bike finance, then make sure you request a detailed quote so you can identify what you are being charged for each service.
- Interest: this is charged on your bike loan according to the Consumer Credit Code Act. That states that interest be charged at a daily rate based on the daily balance and charged monthly to the loan. You can read more about Interest Rates especially Comparison Interest Rates for consumer loans on our dedicated web pages.
- Loan Application Fee: often also called a Loan Establishment Fee, this is a one-off charge made by the lender to cover the process of setting up your loan account etc. This is normal operating procedure and all banks and lenders will charge this fee unless otherwise state. If you come across a ‘no loan establishment fee’ special deal, it is advisable to read the fine print. They may be charging more in monthly service fees or other hidden charges to compensate for this.
- Monthly Fees: many lenders will charge a monthly service fee on loan accounts. You won’t see this as a separate cost each month as it will be compiled into your overall loan and will be included in your monthly repayment.
- Default Charges: are charged when you miss a payment. These can be very annoying and can add up if you continue to default. Ensure you have sufficient funds in your bank account on the date your repayment is debited each month to avoid these charges. Defaults also impact negatively on your credit report.
- Break Fees: refers to the fees charged when you pay a loan out earlier, ie before the agreed loan term. Unsecured Personal Loans usually attract no break fees as they are based on variable interest rates. Secured Bike Loans are based on a fixed interest rate and attract minimal break fees.
- Miscellaneous Charges: may be hiding in your loan contract. If you’re organising your loan through Jade, your consultant will explain all fees and charges to you. If you’re applying yourself, we advise you really take the time to read the contract closely.
Bike Buying Expenses
The price advertised for the bike you want looks great and is right in your doable zone. But wait, have you taken into account the extra costs involved? Here’s a few to keep in mind, so you avoid any surprises:-
Stamp duty: is charged in some states on new bike sales. Check your state transport department for details.
Dealer delivery charges: usually apply to new bikes and may or may not also cover stamp duty and rego.
Registration: with a new bike you’ll have to pay rego and on a second-hand bike you’ll have to pay the transfer of rego. Rego may be included in your bike loan but that will mean you will be paying interest on that amount. To avoid the interest, pay the rego separately. If buying through a dealer, question the individual costs including rego, and if you choose, pay it separately.
Auction fees: will be charged by the auction fees based on the final purchase price. If you’re buying through an online auction platform such as ebay, the seller usually pays any fees.
Insurance: will be required if you’re taking out a loan and always advisable, dependent on the value of the bike. Shop around as insurance is highly competitive and policies can vary in price and inclusions.
What expenses are incorporated in your bike loan repayments?
When sourcing your motorbike finance quote, your Jade consultant will give you a quote on monthly repayments which includes the interest and the lender fees and charges. In addition, if you choose to include the rego and say the first year of insurance in your loan amount, they too will be included. If you choose to pay them separately, they won’t be included.
For more info, tips and hints on buying a bike and bike finance, browse our website and articles and stay informed!
To discuss a cheap motor bike loan, call Jade Car Loans 1300 000 003 and speak with one of our consultants.