To secure their best motorcycle loan, buyers should consider securing the lowest interest rate, the repayment term requested, and the amount they want to borrow. Achieving the ‘best’, most suitable finance involves not just focusing on the interest rate on its own, but taking into account the other components of the loan and personal situations and objectives.
What is considered the ‘best’ finance can vary with individual buyer objectives. For some buyers, getting the lowest interest rate to ensure the cheapest overall purchase will be their aim. For some, it will be getting the longest possible term to pay off the bike, so the monthly repayments are the lowest possible. While for others, the ‘best’ outcome will be borrowing the complete purchase price to avoid making a deposit.
While the same types of credit products and individual assessment apply to all brands – Suzuki, Honda, BMW, KTM, etc, loan offers vary for new and used models, and for different buyers based on their credit profile. Rates, terms and the loan amount all impact a motorbike finance offer for all types of machines and all buyers.
Best Motorcycle Loan – Interest Rate Considerations
The current rate market could be seen as heading lower as the Reserve Bank has announced a number of cash rate cuts recently. That may have buyers wondering if their ‘best’ option is to opt for a variable rather than a fixed rate loan.
Variable rates are subject to change when the lender adjusts their rate on that credit product. This typically occurs when the RBA announces a cash rate change or when the lender’s analysts forecast changed economic conditions.
When taking on a loan with a variable rate, borrowers may be faced with either lower or higher rates over the term of their loan. While the current market may appear to forecast several more rate cuts in the next year, buyers need to consider what may transpire over the full 4, 5, 6 years of their motorcycle finance term. Should economic conditions change and require the RBA to increase rates, variable rate loan holders may be faced with higher rates and higher repayments.
Fixed rates do not change over the loan term. The rate locked in at the start of the term remains unchanged until the finance is finalised. Repayments also remain unchanged.
Most Secured Bike Loans have a fixed rate, but some lenders may offer loans for motorbikes with a variable interest rate. These can be Unsecured Personal Loans which have a higher rate than a secured, fixed rate loan.
The rate determines the amount of interest accrued over the loan term which then affects the total cost of the machine. With rates varying across the market, refer to our current rate chart to see the variations.
How the Term May Deliver the Best Motorcycle Loan
So, you want as long as possible to pay off your new machine? Yes, a longer term will deliver lower monthly repayments, but it will take longer to own your machine, and a larger amount of interest may accrue on the loan. Adding to the actual purchase cost.
To see the effect of loan terms on repayments and total interest payable, use our Finance Calculator. By varying the term and keeping all other amounts the same, you can how repayments do change, but so does the total interest.
If your ‘best’ finance is with repayments that suit your income, use the calculator to determine your ideal loan term.
How Loan Amount Contributes to Best Motorcycle Loan
How much you borrow, in total and as a percentage of the motorbike, affects the finance in a number of ways. First, the amount in dollars that you can borrow will be determined by the lender as your borrowing capacity. This is determined when the lender assesses your individual income/expenses situation and credit profile.
Secondly, the lender looks at the value of the machine compared with the loan amount when determining rates and approving applications. A higher loan to value ratio can present a higher risk proposition to a lender and they may offer a higher interest rate.
By lowering the amount you borrow by making a deposit, you will lower your repayments, own the bike sooner, and could be offered a better interest rate.
Services to Help You Secure Your Best Motorcycle Loan
If all those issues and considerations are putting you out of your comfort zone or sounding like taking more time than you have to spare, don’t worry, our brokers are available to find you your best motorbike finance. Our services include handling all aspects of the finance from your initial enquiry through to settlement and you riding out of the showroom.
Connect with us online or by phone. Brief us on your objectives, provide the necessary details and documents on your finances, and we’ll find you the best rates and negotiate to best achieve the repayments and credit limit to meet your objectives.
Simplify the process of getting your best motorbike loan, contact 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.
" alt="">