Motorcycle (21089)

If you have bad credit, motorcycle financing may be a bit of an issue for you. Even though bikes may seem to be less of a monetary commitment than cars, they can often cost just as much (if not more). Fortunately, even with bad credit, motorcycle financing is still possible, and in some cases not nearly as difficult as you might think.

What is Considered Poor Credit?

When people refer to "bad credit" (in any context, not just with motorcycle financing), they generally are referring to your credit score, which is a number that is calculated based on your financial history (previous ability to pay off loans, timeliness of payments, etc.). A popular measure of this is done by the FICO score system. Under this system, which determines scores ranging from 300 to 850, a good score is considered to be 620 or higher. Poor scores are generally around 600 or lower. There are numerous places online where you can check your credit score.

Is Bad Credit Motorcycle Financing Really Possible?

Even with bankruptcy on your report, yes, bad credit motorcycle financing is possible. Unfortunately, you need to be extra careful because there are a lot of lenders who will try to take advantage of you due to your poor credit. If this happens, you may wind up paying much more for the bike than you planned to (because of excessive fees and extremely high interest rates). Don't let a potential lender tell you that you need to pay all kind of fees, insurance, etc. just to get approved. Because traditional lenders will try to cover their risk by squeezing as much money out of you as possible (due to your bad credit), motorcycle financing may need to be done through some unconventional means.

What Are Examples of Places People with Bad Credit Can Get Motorcycle Financing?

Fortunately, there are a number of alternative ways individuals with bad credit can obtain motorcycle financing.

1) Credit Unions - Credit Unions may be more willing to offer bad credit motorcycle financing than a dealer or traditional bank, because they have a much larger, diversified portfolio of loans. Motorcycle financing likely makes up a small portion of their portfolio, so they are willing to take on additional risk without attempting to take advantage of you.

2) Social Lending (AKA Peer-To-Peer Lending) - Through reputable websites such as Lending Club, one can obtain a loan for lower rates compared to other options. Lending Club consists of regular people (like you and me) who invest in your loan. Each person may only invest as little as $25, but when it all accumulates, you are presented with a loan for whatever amount and purpose you seek. Bad credit motorcycle financing is very reasonable here, because the service is so transparent. Although you may not receive a low interest rate, you won't be hit with any unexpected or unreasonable fees.  

3) Small/Local Banks - Because small, local banks generally receive less business, they are often more willing to take on risk in exchange for receiving your monthly interest payments. Conservative banks may not be interested in giving motorcycle financing to bad credit individuals, however many of the more ambitious small banks with large portfolios may be willing to offer you a loan.

Hopefully this article gave you some insight and hope. As you can see, even with bad credit, motorcycle financing is still possible through several different options. If you're low on funds because you don't have a job, you may want to read more here.