On a Bad Credit Motorcycle Loan, What Interest Rates Can I Expect?

For many, motorcycles are hassle free vehicles.  Not only do they cost less, fuel and maintenance expenses are also low.  Purchasing a motorcycle is also quite easy as there are many lenders available. 

Bad Credit Motorcycle Loan

A bad credit motorcycle loan is a motorcycle loan where the borrower has a low credit score.  Lending money to a motorcycle buyer who has a low credit score is a risk to the lender, as the chances of loan default are quite high.  In fact, a person with bad credit may postpone or abandon the idea of purchasing a motorcycle altogether, as he would find it difficult to obtain a bad credit motorcycle loan. However, bad credit motorcycle loans are available in some banks, credit unions and online lenders.

On a Bad Credit Motorcycle Loan, What Interest Rates Can I Expect?

  • Before applying for a bad credit motorcycle loan, the person wishing to buy a motorcycle should study the interest rates offered by different lenders. 
  • He should know that these loans carry higher interest rates compared to other loans.  In fact, the rate may be as high as 20%.
  • Though the interest rate seems to be exorbitant, the lender is only protecting himself, from possibly losing all his money if the borrower fails to repay the loan. 
  • The borrower should go ahead with his decision of taking a motorcycle loan and buying the motorcycle only if he is sure that he can comfortably pay his loan installments.
  • Not only are the interest rates high, the lender will further safeguard himself by fixing a limit beyond which the loan cannot be taken.  The loan period will also be shorter.

So the borrower of a bad credit motorcycle loan should be ready to pay interest at a high rate. Since the loan amount is small, it would be advisable to buy a used motorcycle or a low priced motorcycle.