What You Need to Know About Motorcycle Financing

If you are looking to purchase a motorcycle and are wondering about financing, Arkansas Federal Credit Union offers easy financing options to get your ride on the road. With motorcycle financing, you can make affordable monthly payments for a set period of time, so you don’t have to pay the full cost up front. 

Arkansas Federal Credit Union makes motorcycle financing easy with up to 100% financing and competitive rates. Plus, the application is online, completely free, and comes with no obligations. 

Apply for a motorcycle loan today with Arkansas Federal to see what motorcycle loan you qualify for. 

How to Finance a Motorcycle

If you know you want to finance your motorcycle but are unsure how to get a loan, Arkansas Federal can help.

Step 1: Check Your Credit Score

The first step in getting a motorcycle loan is to check your credit score. Your credit score is important because it determines whether you are approved for the loan and what terms you are offered. In general, the higher your credit score is, the better the loan offers and interest rates you’ll receive. 

If you don’t know what your credit score is, you can check it for free with Arkansas Federal’s Credit IQ.

Step 2: Determine Your Budget

The next step is to determine your motorcycle budget. Motorcycle loans allow you to spread the total cost of the motorcycle into affordable monthly payments over a fixed period of time. 

Your exact monthly payment will depend on your loan amount, loan term, and interest rate.  To get an estimate, you can use Arkansas Federal’s motorcycle loan calculator. Most motorcycle loans range from 2 to 7 years, so you can adjust the loan term to find an affordable monthly payment based on your budget. 

In general, longer loan terms will give you lower payments. However, longer loan terms can lead to higher overall costs due to the additional interest you pay over time. 

For example, let’s look at the difference between a 3-year and 5-year loan for $20,000 at a 7.04% interest rate:

• 3-year loan: Monthly payment of $617, with $2,200 in total interest
• 5-year loan: Monthly payment of $396, with $3,750 in total interest

Figuring out your budget is a personal decision and will come down to what you feel comfortable paying each month and how much you are willing to pay overall. 

Step 3: Choose a Motorcycle

Now that you’ve determined your budget, it’s time to find the motorcycle you want to purchase. When you are shopping around, make sure you get a quote or bill of sale that shows the full cost of the bike, including any taxes and fees. If you are planning to trade in a vehicle or make a down payment, you will want to include that in the documentation as well.  

It’s important to make sure you have complete and accurate documentation for all of your motorcycle expenses when you apply for your motorcycle loan. Without it, you may not be approved for the right amount or could have issues with your application. 

Step 4: Apply for a Motorcycle Loan

Now that you have chosen your motorcycle, it’s time to apply for a loan. When you apply, you will need to provide proof of income and documentation showing the total price of the motorcycle. After your application is submitted, your lender will review your credit score, debt-to-income ratio, and other financial information to determine if you qualify for a loan and what terms you will be offered.

Arkansas Federal makes it easy to apply for a motorcycle loan. You can apply for free in just a few minutes online. The best part is there is no obligation, so you can apply for a motorcycle loan at Arkansas Federal today.

Step 5: Close On Your Motorcycle Loan

Once your application has been approved, you will finalize your loan agreement (referred to as a “close”). During closing, you will review and sign the final loan documents, which will outline your interest rate, monthly payment amount, and your repayment schedule. Once the paperwork is finalized, the lender will send the loan either to you or directly to the dealership. Once this happens, your loan is complete, and you will officially own your new motorcycle.

FAQs About Motorcycle Financing

Is it hard to finance a motorcycle? 

We’ve helped members across Arkansas finance their motorcycles. Not all motorcycle loans are the same and vary on factors such as the loan amount, your income, and your credit score. Our lending team can help you find the best motorcycle loan for you. 

Can I finance a motorcycle with bad credit?

Bad credit doesn’t automatically mean you can’t finance a motorcycle. Lenders look at multiple factors aside from your credit score when determining if you can be approved for a loan. 

Even if your credit isn’t great, you may still be approved for a loan. That said, your interest rate or loan terms may not be as good as someone with stronger credit. 

If you don’t have a great credit score, you can still apply for a loan to see what terms you are offered. If you are denied or the offer doesn’t work for your budget, you can focus on improving your credit score and apply again later. 

Do I need a motorcycle license to finance a motorcycle? 

Not always. Some lenders require you to have a valid motorcycle license before approving your loan while others will only require it before you pick up the bike. We recommend checking with your lender to confirm their requirements. 

Do I need full coverage insurance when financing a motorcycle? 

In most cases, yes, lenders will require full coverage insurance when you finance a motorcycle. This is because the lender technically owns the motorcycle until the loan is paid off, and insurance provides protection in the event of theft, damage, or an accident.

Once your loan is paid off, you can typically choose how much insurance you want to have, depending on your needs and state requirements. 

That said, insurance requirements can vary by state and lender, so it is a good idea to check with your lender to confirm what coverage is required. 

Get Motorcycle Financing at Arkansas Federal

Whether you are looking for your first bike, upgrading, or adding another to your collection, Arkansas Federal is here to make motorcycle loans easy. 

You can apply online in just a few minutes and there’s no obligation to accept the loan. Apply for a motorcycle loan with Arkansas Federal today to see what you qualify for.