Motorcycle Loans for Bad Credit: Your Guide to Getting Approved

If you have bad credit but dream of hitting the open road on a new motorcycle, don’t lose hope. While it can be more challenging to get approved for motorcycle loans with bad credit, there are still options available. This comprehensive guide will cover everything you need to know about bad credit motorcycle financing, from improving your chances of approval to finding the right lender.

What is Considered Bad Credit for Motorcycle Loans?

Generally, a credit score below 600 is considered bad credit when it comes to motorcycle financing. Here’s a breakdown of credit score ranges and how they’re typically viewed by lenders:

Credit Score Range	Credit Rating
300-579	Poor
580-669	Fair
670-739	Good
740-799	Very Good
800-850	Excellent

However, it’s important to note that credit score is just one factor lenders consider. Your income, debt-to-income ratio, and employment history also play significant roles in the approval process.

Challenges of Getting a Motorcycle Loan with Bad Credit

When applying for motorcycle loans for bad credit, you may face several obstacles:

Higher interest rates
Larger down payment requirements
Shorter loan terms
Limited choice of lenders
Stricter income and employment verification

Despite these challenges, it’s still possible to secure financing for your dream bike. The key is to be prepared and explore all available options.

How to Improve Your Chances of Approval for Bad Credit Motorcycle Loans

Before applying for a motorcycle loan, take these steps to increase your likelihood of approval:

1. Check and improve your credit score

Obtain a free copy of your credit report from AnnualCreditReport.com and review it for errors. Dispute any inaccuracies and take steps to improve your score, such as paying down existing debts and making all payments on time.

2. Save for a larger down payment

A substantial down payment can offset the risk for lenders and improve your chances of approval. Aim for at least 10-20% of the motorcycle’s value.

3. Consider a co-signer

If you have a friend or family member with good credit willing to co-sign your loan, it can significantly boost your approval odds and potentially secure better terms.

4. Demonstrate stable income

Lenders want to see that you have a reliable source of income to make your loan payments. Gather recent pay stubs, tax returns, and bank statements to prove your financial stability.

5. Shop around for lenders

Don’t limit yourself to just one lender. Explore multiple options, including traditional banks, credit unions, online lenders, and motorcycle dealerships that offer in-house financing.

Types of Bad Credit Motorcycle Loans

When seeking motorcycle financing with bad credit, you may encounter several loan types:

1. Secured Loans

These loans use the motorcycle as collateral, which can make approval easier but puts your bike at risk of repossession if you default.

2. Unsecured Personal Loans

While harder to obtain with bad credit, unsecured loans don’t put your motorcycle at risk. However, they typically come with higher interest rates.

3. Buy Here Pay Here Financing

Some motorcycle dealerships offer in-house financing for buyers with bad credit. While easier to obtain, these loans often have higher interest rates and fees.

4. Peer-to-Peer Lending

Online platforms connect borrowers with individual lenders, potentially offering more flexible terms for those with bad credit.

Top Lenders for Bad Credit Motorcycle Loans

Here are some lenders known for working with bad credit borrowers:

Avant
OneMain Financial
Upstart
Harley-Davidson Financial Services
Freedom Road Financial

Always compare offers from multiple lenders to find the best terms for your situation.

Understanding the Costs of Bad Credit Motorcycle Loans

When considering a motorcycle loan with bad credit, it’s crucial to understand the total cost of borrowing. Here are some key factors to consider:

Interest Rates

Bad credit borrowers can expect higher interest rates, potentially ranging from 10% to 30% or more. This can significantly increase the total amount you’ll pay over the life of the loan.

Loan Terms

While longer loan terms can lower your monthly payments, they also mean paying more in interest over time. Shorter terms may have higher monthly payments but cost less overall.

Fees

Be aware of additional costs such as:

Origination fees
Application fees
Late payment fees
Prepayment penalties

Example Cost Comparison

Here’s an example of how bad credit can impact the cost of a motorcycle loan:

Credit Rating	Loan Amount	Interest Rate	Term	Monthly Payment	Total Interest Paid
Good (700+)	$10,000	6%	36 months	$304	$944
Bad (below 600)	$10,000	20%	36 months	$372	$3,392

As you can see, bad credit can significantly increase the cost of financing a motorcycle.

Alternatives to Traditional Motorcycle Loans for Bad Credit

If you’re struggling to get approved for a traditional motorcycle loan, consider these alternatives:

1. Rent-to-Own Programs

Some dealerships offer rent-to-own options that can be easier to qualify for with bad credit. However, be sure to carefully review the terms and total cost.

2. Credit Card Financing

If you have a credit card with a high enough limit, you could use it to purchase your motorcycle. Be cautious with this option, as credit card interest rates can be very high. Check out our guide on CreditCards.com for more details.

3. Save and Purchase in Cash

While not ideal if you’re eager to ride, saving up enough money to buy your motorcycle outright can be the best way to avoid the higher costs associated with bad credit loans.

Product Table: Motorcycle Loan Dosages and Prices

Lender	Loan Amount	Interest Rate (Annual %)	Term (Months)	Total Cost to Borrow ($)
OneMain Financial	$5,000 – $40,000	12.9% – 36%	Varying	Varies based on term and rate
Avant	$5,000 – $40,000	9.9% – 35.9%	Varying	Varies based on term and rate
Harley-Davidson Financial Services	$1,000 – $40,000	Varying (based on credit)	Varying	Varies based on term and rate
Upstart	$1,000 – $50,000	6.97% – 35.99%	Varying	Varies based on term and rate
Freedom Road Financial	$1,000 – $20,000	9.84% – 35.97%	Varying	Varies based on term and rate

Note: Prices and terms may vary and are subject to change without notice.

Pros and Cons of Bad Credit Motorcycle Loans

	Pros	Cons
Higher Approval Odds	Easier to get approved even with bad credit.	Potential for higher interest rates and fees.
Faster Access to Funds	Can secure financing quickly, allowing you to purchase your motorcycle sooner.	Might have stricter repayment terms compared to good credit loans.
Broad Selection of Lenders	Variety of lenders can provide competitive offers and better rates for some borrowers.	Higher interest rates can make the loan more expensive in the long run.
Possible Co-signer Options	A co-signer with good credit could improve your loan terms and chances of approval.	May require a co-signer who is willing to take on the risk of defaulting payments.

Frequently Asked Questions (FAQ)

Can I get approved for a motorcycle loan with bad credit? Yes, but you’ll likely face higher interest rates and fees. Consider shopping around to find the best terms.
How much does my down payment need to be? A larger down payment can improve your chances of approval and reduce overall financing costs. Aim for at least 10-20% of the motorcycle’s value.
Will a co-signer help me get approved? Yes, having a co-signer with good credit can significantly boost your approval odds and potentially secure better loan terms.

Conclusion

Borrowing for a motorcycle when you have bad credit is possible but comes with its challenges. By understanding the process, improving your credit score, and exploring all financing options available to you, you can still achieve your dream of owning your own bike without breaking the bank.