4 Mistakes Motorcycle Buyers Make When Shopping For A Motorcycle Loan
There is no doubt that shopping for a motorcycle loan can be confusing and intimidating. However, it does not have to be. Below this article highlights 4 mistakes often made by motorcycle buyers looking for motorcycle loans. By not making these mistakes you will make shopping for a motorcycle loan much more trouble-free!
1. Being scared to ask questions.
The bottom-line is that if you do not understand the type of motorcycle loan, then you should be sure to ask lots of questions.
Here are some good questions to ask:
- Can the interest rate on the motorcycle loan change?
- What are the late fees if a payment is 30 days late? Can late payments cause the interest rate to increase?
- How long is the term on the motorcycle loan? Will the loan be paid off at the end of the term?
- What happens if a payment is 60 days late? How does this affect my credit?
- Does the loan use simple interest or Rule of 78? (Simple interest is always better because it does not penalize the motorcycle buyer if the loan is paid off early.)
- Is there a down payment requirement?
- What are the insurance requirements?
- How much extra is registration fees and are these fees included in the motorcycle loan?
- Are there any additional fees that may be charges?
2. Getting a motorcycle loan without fully understanding the terms.
Motorcycle buyers often jump right into a motorcycle loan that they do not fully understand. For instance, many buyers jump right into Rule of 78 installment loans when they could have gotten a simple interest loan from their bank or online. Make sure you understand how the interest is calculated on your loan and if
there is the potential to be caught "upside down" if your choose to trade in your bike before 12 months.
3. Borrowing too much.
Make sure you understand your budget requirements and do not stretch yourself too thin. Borrowing too much money can have an adverse affect on your financial future. Sure you may want a $20,000 Harley, but can you settle for a $10,000 Japanese Harley look alike? Keep your purchase within your means. You do not want to be a slave to your motorcycle.
4. Shopping for a motorcycle before shopping for a motorcycle loan.
Before you enter the showroom it is important to figure out how much a lender is willing to loan you. There is no reason to waste your time shopping for a $20,000 Harley if you can only get approved for $12,000. Also, many lenders require down payments so getting approved before shopping can help you save time.
As a whole, avoiding the above mistakes by spending a little extra time focusing on shopping for a motorcycle loan and asking lots of questions can make your life more trouble-free in the long run.
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