One of the most practical solutions that deliver as much as 40 savings in daily expenses is getting rid of our gas-guzzling SUVs and cars and get into the motorcycle trend. You may want to look at it as a temporary adjustment to weather the economic crises. So rather than sell-off your beloved car, you can get yourself a motorcycle loan, much like a car loan, with your car as easy collateral.

Things to Look Out For

Getting a loan to finance your motorcycle purchase should be viewed as an investment that requires some due diligence just like any foray into investment opportunities. Do some due diligence work by shopping around and inquiring about financing services.

The easiest way is to browse on motorcycle loans online and you’ll be amazed at the number of sites offering one. There are some basic things to look out for, like the term of the loan which should not be more than 3 years as the principal amount does not need to be as large as a car loan.

Bear in mind that the longer the term, the higher the loan cost at the end of the term. Check out the motorcycle loan rates and they should be no more than your typical car loan rates. See if the registration fees are included in the loan as most do. This should relieve you of having to register the bike after getting it.

Alternatively, you can get your financing directly from a motorcycle dealer who will most surely include this in its financing deal. Then consider the insurance coverage which should likewise be part of the deal. Last but not the least, find out about late payment penalties and surcharges and any favourable provision for paying the loan balance outright at any time during its term.

You could get a personal loan as they often are large enough to cover the cost of a brand new motorcycle. These are often unsecured loans and carry high interests but you should be fine if the term does not exceed a year. Most motorcycle makers offer in-house financing.

Honda leads here as they offer a Honda credit card which allows you to get the motorcycle of your choice and pay it off like any deferred payment scheme on a credit card. If you still have an active credit card that has sufficient unutilized credits, consider this as another financing option for your motorcycle.

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Things to consider

This may seem too obvious, but it’s better to say it up front. Never start shopping for your dream motorcycle without first assessing you financial muscle. Whether what you have can defray the entire cost of the motorcycle or not, at least you have a starting financial footing when getting into a showroom. Then you can start shopping not just for the motorbike but also for the loan you need to complete the deal, in case your cash savings can only cover a part of it.

Don’t fall into the common mistake of getting 100% financing for your motorcycle. Bear in mind that the larger the loan, the more imposing the interests amounts you have to pay. Also consider a shorter loan term to pay it off. The longer the term, the higher the overall cost of the loan becomes.

Your cash savings can comprise your down payment. A 50% down will go a long way to getting a more comfortable motorcycle loan financing. Take advantage of low interest offers. Armed with a good enough cash savings for a down payment, avail of short term motorcycle loan rates which usually apply for 12-24 month loan terms. See that the insurance coverage and registration fees can be taken off from the loan proceeds as they are often cheap enough for you to pay off. Lastly, get a handle on any surcharges or penalties in case you inadvertently make a delayed payment on the loan so there’d be no surprises along the way.

If you don’t have enough cash savings to form the down payment, you have to accept a more expensive loan with longer term duration to ease your monthly payments. In this regard, it would be good to check that the loans don’t use the “rule of 78” which will slap you with the same interests even if you pay-off the loan balance before maturity. You’d never know if your finances will improve along the way so you pay off the remainder of your loan.

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