How To Get Approved For A High Risk Motorcycle Loan And Financing
by Wasrock Robert M. May 16, 2017, 2:23 am
Are you in the market for a motorcycle, but have bad credit and need a high risk motorcycle loan? Well do not worry the goal of this article is to provide you everything you need to know about getting approved for a high risk motorcycle loan.
First you must understand how motorcycle lenders go about classifying you as high risk. On the average, when a motorcycle lender is looking to approve any motorcycle financing they have a much higher cut off in the credit score range than an auto lender. This exists wherever you have good or bad credit.
So with that said an auto lender may approve a FICO credit score of 610 as not a high risk, but a motorcycle lender would most likely classify a FICO credit score of 610 as a high risk motorcycle loan and may not offer an approval on it.
There are two reasons for this:
1. Motorcycles are much harder to repossess in good condition than an automobile. As a result of this simple fact, if you default on your motorcycle loan it is a higher risk to the motorcycle lender than an automobile lender because it is much harder to repossess a motorcycle in good condition than a car.
With all the new motorcycle riders entering the industry there is a high incident of some form of minor or major damage on many motorcycles, which translates in to a lower amount per unit a lender gets when they repossess a motorcycle for a customer that chooses to get Bad credit over paying for their motorcycle loan. The damage could be from the repossession agency or the actual owner but the simple fact is motorcycle fetch much less repossession auctions than automobiles.
This simple fact is one reason good and poor credit motorcycle loans are offered at much higher interest rates than a car and has an overall lower approval percentage when compared with cars.
2. The average motorcycle tends to depreciate very fast. Since motorcycles have higher accident rates and there are many people who once they crash do not pay off their loan, these results in higher defaults for motorcycle lenders. This is another reason motorcycle loan rates are higher and motorcycles are hard to get approved for.
Ok, now that you have a background in how a motorcycle lender views a motorcycle loan, let's look at how you can get approved for a high risk motorcycle loan .
Step one is to really understand your credit report and credit score. Sure if you are looking for high risk motorcycle financing, you probably have had some credit issues in the past. But you never know how those credit issues played out on your credit report until you get a copy of it.
Take a look and make sure everything reported on your credit report is actually true. See every year 1000s of people just like you find creditors made errors on their credit report, which negativity affected their credit score. If your FICO score shows a 610, but there is 1 error on your credit report you could easily raise your FICO credit score to 625 or higher by getting the error fixed. Always get errors fixed on your credit report before you submit a high risk motorcycle loan application.
Step two is to clean up your credit card debt. I know you are probably thinking I can not do this, but it can make a huge difference in helping you get approved for high risk motorcycle financing. See motorcycle lenders do not like to see your personal credit cards maxed out. Therefore, before you submit your application for motorcycle financing you should try to pay down your credit card debt. Even if you have to do it for the short term it can help you tremendously with getting approved.
For instance, if you have a 610 FICO credit score you will probably be declined if you have all your credit cards maxed out. However, if you are able to reduce your credit card debt by 50% you stand a much better chance of getting approved for a high risk motorcycle loan. This is a simple concept but you will be surprised by how many motorcycle buyers fail to do this and never get approved.
Step three and the final step is too finally submit your motorcycle loan application. There are many lenders that specialize in high risk motorcycle loans. I recommend tying about 2 or 3 online motorcycle lenders and then move to your local credit unions or financing provided by the dealership such as Suzuki Finance, Honda Financing, Kawasaki Credit Card or the Polaris Star Card.
Can You Get A Motorcycle Loan With Horrible Credit 2015?
Can You Get A Motorcycle Loan With Horrible Credit 2015?
Getting a motorcycle can be an excellent investment. They use less gas, they allow you to enjoy the fresh air, and they don’t take up much space. It’s a favorite pastime in America and many people have decided to get one for their home.
While cars are great for transporting your family, for bad weather conditions or for needing to be able to talk to your passenger during the trip, motorcycles are a great way to save on gas, have an enjoyable ride and you’ll even be more focused since you won’t be tempted to text and drive.
For those that would like to invest in a motorcycle, but realize their credit is not in good shape, they may be wondering how they could get their motorcycle loan. Although motorcycles can be expensive, there are ways for those with horrible credit to get a motorcycle loan.
If you are looking to get a motorcycle with horrible credit, you are not out of luck. The first thing you want to do is start saving up money because you’re going to need a big down payment. This way, you don’t have to pay cash for a bike, but you’re more likely to get a loan because you can put down a large chunk of it. This will also decrease the amount of money you’d pay over the life of the loan.
While this is not possible for everyone, you could try to get a co-signer. It doesn’t have to be a relative. It just needs to be someone who is willing to sign their name on the loan saying they will pay the loan if you don’t. As long as you pay your loan, your co-signer won’t need to do anything, but having a co-signer increases your chances of getting approved for a loan.
Try to Improve your Credit Score
Practicing better financial decisions and strategies can help to improve your credit score. Getting in good standing on any past due debts and lower credit card balances can also help. Over time, your credit will start to improve and you will be more likely to get approved for a loan.
If you don’t have Luck with the Bank
If you’ve tried to get a loan through a bank lender, there are other options. Look online for lenders that may give you a personal loan. Another way you could go is to try borrowing from someone you know on a loan basis. If a relative or friend lends you the money, you could have a type of contract typed up with this person on when you agree to make payments and if they’ve asked you to pay them any interest.
Another way to get a loan is through a process of micro-lending, a practice in which small investors put money into your loan and get some of the interest instead of it all going to the lender. This is helpful for bad credit borrowers who are looking for someone to help put money down on their loan, but will also benefit through getting interest. It’s a good investment for both lenders and borrowers.
If you are able to get a loan, it’s probably a bad credit loan. This is still a loan so you could still get the motorcycle. The only downside to bad credit loans they come with higher interest, but regardless, it still gets you the motorcycle. Beware, bad credit loans typically come with higher penalties if you don’t follow the terms of the loan.
What to bring when trying to get a loan
Make sure you bring with you a few items including:
- A valid driver’s license or ID
- Your social security number
- Proof of your income, usually several months of consistent paystubs
- Proof of your residence, the bank needs to know you have a permanent address
- Make sure you are at least 18 years old if you want a loan
Getting a motorcycle loan with horrible credit isn’t impossible. Take these steps when trying to get a loan and remember that you can always improve your credit, save up a large down payment, and try again later.