In the beginning, it may seem simple enough. You go out and buy a motorcycle with a loan from your local bank or credit union. That’s not always going to be the best idea though as many people have come to realise after being duped by a bank into a larger amount of debt than they could afford.
Here are five things you need to know before taking out a loan to finance your next motorcycle.
Not all lenders are the same
Like just about every other type of business out there, not every lender is the same and one size does NOT fit all. Some lending institutions will work with you but others won’t. If you’re looking for a loan make sure you do your homework and find out who is willing to work with you. You may find that a credit union, other bank or finance company is a better fit for your needs and it will save you from getting stuck with a loan you probably can’t afford. OU Federal Union or OUFCU is the 28th largest credit union in Oklahoma City, and it provides auto and motorbike loans. One option is to get a Driva motorcycle loan, which will allow you to compare a wide range of lenders and figure out which loan option suits you best.
Make sure the motorcycle fits your budget
No matter what anyone tells you, no lender in their right mind is going to loan you money to buy a motorcycle that doesn’t fit your budget. If they do, run away as fast as possible and don’t look back because it will only end in tears. The last thing you want is to be $10,000 or more in debt and still have to pay for the bike and repairs.
One of the biggest mistakes people make with taking out a loan is thinking they can afford it instead of actually doing the calculations and determining if they will be able to keep up with the repayments. When you take out a loan, one of your primary goals should be to pay that money back as fast as possible, don’t make it any harder on yourself than necessary by only managing the minimum repayments.
Is this the right time?
This is the question you need to ask yourself. If you’re already strapped for cash and can barely afford what you have then it may not be a good idea to take out another loan on top of that just yet. It’s never a good idea to take on any more debt than you need and if you’re going to do it, make sure you’re going to have the money in the bank for a few months just in case something goes wrong.
Check your credit score
This is as important as checking your budget. If you have a poor credit rating then do not expect lenders to give you money, even with a co-signer! A good score does not guarantee that you will get the loan but it certainly makes the process easier and gets rid of any red flags for the lender. Make sure to check your score before you apply for a loan and then again a few days later. This way if there is an error that was corrected, you will know about it right away. It could make the difference between getting accepted or denied for the loan.