If your credit history is spotted, you can find it extremely hard to find a bad credit motorcycle loan. Part of this is the unwillingness of many lenders to give money to people with bad credit and part of it is the fact there are relatively few motorcycle loans issued each year compared to the amount of auto and home loans that are issued. This means there are fewer lenders and the places that do offer lending aren't able to offset the risk of your bad credit loan with loans that are made to people with a better credit history. Luckily, however, there are still options for motorcycle loans for people with bad credit. Many of these are online, but always make sure that you are able to repay the loan before you take one out.

How To Know If You Have Bad Credit

The easiest way to determine if you have bad credit is to check your credit score with the major credit ratings agencies. You can do this online fairly easily. If you find that you do have bad credit, usually a score below 500, there can be several reasons for it. You credit score includes, but is not necessarily limited to, any recent bankruptcies, negotiated credit card debt, the total amount of debt you owe, how many payments on your debt have been late, the length of your credit history, and the amount of assets in your possession. Banks use this figure to find out if you are able to pay back your loan. Bad credit places you at a high risk for the bank because you might default on your payments. This can make taking out motorcycle loans with bad credit extremely hard.

Luckily, if you do succeed in finding a loan, if can be used to repair your credit history. Having a record of making payments on your debt with no missed or late payments will improve your credit score dramatically. However, in order for this to work you must be sure that you can afford all the loan payments before you sign the contract. Also make sure that you are aware of any clauses in the contract that may penalize you if your forget any payments.

Options for Motorcycle Loans for Bad Credit

There are several different options for obtaining financing for your motorcycle. The first and easiest is to go to an online lender. Online lenders cut out middlemen and also allow you to compare different prices, fees, and interest rates relatively quickly and easily. There are also many more lenders online than in your hometown, and more competition means better prices for you.

You can also opt to obtain financing in the traditional way, from credit unions, banks, or through a personal loan. Credit unions, if you are a member of one, will usually have better rates than banks because all their profits go back to the people who have deposited money with them. Banks are another source for high risk loans, but their lending requirements may be too strict. Finally, you can also take out a personal loan. Personal loans should only be used as a last resort. The interest rates on these loans are generally very high and they are much harder to obtain than a secured motorcycle loan.

General Requirements for Bad Credit Motorcycle Loans

While there are many lenders willing to grant a bad credit secured loan, most of them will require several things before they will approve a loan. First, you must have a steady job and be a legal resident of the country you are in. You also must be over eighteen and usually can't have any recent bankruptcies. You can expect to pay interest rates anywhere in the neighborhood of twelve to fifteen percent. These rates will vary with how bad your credit actually is. Also beware that if you fall behind on payments the bank can take your bike, leaving you without a mode of transportation, so make sure to send in all your payments on time.

If you want to buy a new motorcycle but have bad credit there are many options available to you to get financing. However, the interest on the payments may be high, so you need to calculate what exactly you will owe by the time you have finished repaying the bike with interest included. If this is acceptable to you, also make sure you will be able to make all the payments before you sign your name on the dotted line. Then all that's left is to enjoy your new motorcycle!