Among the different kinds of loans that are given out by financial institutions, those that have low limit like that of a bike, loan is easier to procure. You can avail a bike loan, even if you have a bad credit score, but for that, you must show your address proof, date of birth and the regular monthly amount that gets credited to your bank account. Such loans can be personal loans without the attachment of collateral or repossession in the case of failure to pay.
Knowing the basic facts
The terms and conditions differ according to the individual institutions offering the finance. There are many loan companies, federal banks and private lenders who also disburse joint amount loans, and they do not charge any penalties for prepayment or for the processing of the bike loan amount.
- In case you happen to be the registered member of the recreation center of the leading universities that offer such loans, you have the possibility to benefit from such programs that they announce.
- For other financial sources for the bike, loan make a good study of the different institutions and the loan rates that they offer.
- It is also important to know the conditions of payment attached and also about the collaterals.
The fluctuating APR
When it concerns a bike loan APR, it is always good to have a good credit score, as you are likely to shell out more if your finances have not been too strong lately.
- Lenders are wary of such loans as the bikes are frequently involved in road crashes, or the bikes get stolen all too often.
- The lending rates will be a whopping percentage more than the normal rates with the poor credit scores.
- In the worst cases, your loan request may be totally rejected as the risks on the part of the financiers are too high.
The poor credit loan
Lenders will also not be too happy when you have a lot of unpaid credit card dues, and it is better to organize your finances, pay off the substantial sum of the debt and then apply for the bike loan. Even when you have a good credit score, you will do well to budget your loan repayment and the allied expenditure for your bike. Just because you can afford to make a down payment now does not mean that you have all the resources for the maintenance and timely repayment of the loan. Ask questions when you are applying for the motorbike loan to get the clear picture of how much you have to pay and for how long.
Long-term or short-term
When you opt for a long-term loan repayment scheme, the monthly installments may appear to be less, but you are likely to land up paying more on the total cost than if you were to opt for a slightly higher interest rate. This way you pay off much early, and you have the vehicle to yourself at a lower cost than the long-term payment. This is one of the tricks that the finance companies use to trick people into buying the long-terms loans where the profit is made by them.
Also, you must be wary of accepting the loans against the fancy accessories that you really do not need to ride your bike. Apart from the fact that the interest rate will be higher despite the discounts and the reductions projected, you will have to pay more than the actual cost of the accessories. There are several institutions that offer bike loan among which are the banks, the independent financial institutions, the dealer finances and, of course, the OEM or the Original Equipment Manufacturers are considered in the first list.