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Getting Bad Credit Motorcycle Loans Without Road Rash
By EchoBay Loans Staff Writer

Do you dream of being on the open road with nothing but you and your bike? For many, a motorcycle is the ultimate machine for freedom that can cost as little as a few thousand dollars for a Honda to $75,000 or more for a custom bike from West Coast Choppers®. But if you have bad credit, you may have thought your dream of the open road was just that - a dream. It is possible to obtain bad credit motorcycle loans. You just need to know where to look and what to expect during the process.

It can be more difficult than obtaining a car loan
Even for someone with excellent credit, it is harder to obtain a motorcycle loan than it is a car loan. This is especially true if you have bad credit. This is because lenders view motorcycles as luxury items and not as a necessity. We all have things on our want list and if a motorcycle is on yours, you should be able to get one no matter what your credit score.

Be aware that the process will be more time consuming and frustrating than that of a car loan. The process can be slightly easier if you are going to use the motorcycle as your main source of transportation. If a motorcycle means the difference between being able to get to work or not, your lender may be more lenient in the lending process.

Motorcycle dealer financing is similar to car dealer financing
For the most part, motorcycle dealer financing is very similar to car dealer financing. They both offer special rates and rebates from time and time and you must meet with the finance manager in both cases to close the deal. The dealership has a select number of lenders they are able to use for financing. They will add a mark-up to the interest rate provided to them by the lender and then pass it on to you.

In many instances, there are loans available for every type of credit. It may be worthwhile for you to visit your bike dealer if you have bad credit. Banks typically only deal with customers with good credit and they do not have a vested interest in you buying a motorcycle like your salesman does.

Financing offers from the dealer can be similar to a credit card
Many times the financing offered directly from a motorcycle manufacturer is similar to a credit card. Rather than a fixed, closed-end loan, you will be offered revolving credit, which is the same effect as a credit card. Many times, this revolving line offers introductory rates and lower payments over a certain pre-set time period. After the introductory period, your rate will increase and you will be required to make more of a minimum payment. This type of financing also allows you to purchase additional bike accessories or safety equipment such as a helmet, and roll them into one account.

These types of bad credit motorcycle loans will feature a higher interest rate and the introductory interest rate deal may not be available to you. The important thing to realize with this financing option is that you must pay more than your minimum payment if you ever expect to pay off your loan. Just as with your credit card, you could end up paying thousands more than necessary in interest if you only make the minimum payment. You should put yourself on a payment schedule just as you would with a conventional loan.

Interest rates are usually higher for a motorcycle than a car
Whether you go to the bank or finance through a bike dealer, you can expect to pay more for a motorcycle loan than you will for a car loan. The difference in interest rates can be three points or more. This is especially true if you are looking at bad credit motorcycle loans. You must weigh the total cost of the motorcycle with interest payments to decide if a motorcycle purchase is right for you.

To get approved for a bad credit motorcycle loan, make sure that your credit report is accurate. Even if you know you have bad credit, you should check for inaccuracies in your credit report that could be fixed and could raise your score.

Pay down as much outstanding debt as you can before applying for a loan so that a lender won't deny you credit by thinking you already have too much debt. Another option may be to get a co-signor for your loan. This reduces the potential risk to a lender in case you don't make payments. Of course if this happens, your co-signor would be responsible for the loan payments.

Also, apply at lenders that specialize in bad credit loans since they know how the process works and can get you approved quickly. They're also not afraid of taking on the risk of your bad credit motorcycle loan, but of course you'll pay for their willingness to do it.

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