Best Motorcycle Loans

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Contributor, Benzinga
April 14, 2022

Quick Look: Best Personal Loans for Motorcycles

Find the best motorcycle loan to help you drive off into the sunset in no time. Personal loans can help you achieve a longtime goal or sudden interest in owning a motorcycle. Before starting the loan process, consider factors such as your credit score as well as the specific type of motorcycle that you would like to purchase. The amount you need to borrow for a loan varies depending on the price of the motorcycle and additional fees such as insurance.

Evaluate the type of motorcycle that best fits your interests and needs before deciding on a specific loan. Motorcycle loans are usually personal loans that do not require collateral. These types of loans can help you achieve your dream of speeding down the coast on the motorcycle of your dreams. 

5 Best Personal Loans for Motorcycles

Purchasing a motorcycle can be a full-speed experience. Look into and research personal loans to find the one that’s right for you. Before entering into a loan, consider your potential monthly loan payments, ability to repay and your credit score. You might want to speak to a financial professional about your financial position before taking a loan. 

Best Overall: LightStream

LightStream has offered financial assistance since 2012. The company is part of Truist. Truist is a bank that was formally formed in 2019 after a merger.

The unique features provided by the company include a rate-beat feature that provides a satisfaction guarantee. In addition, LightStream offers a slight discount of about 0.5% for switching to autopay. 

The company offers many benefits such as no fees and low interest that help a potential borrower more easily attain a loan. The rates are low and help LightStream to remain competitive. The loans are recommended for people with a credit range of about 660 and above that also have multiple years of credit history. There are no late fees or origination fees. Typically, origination fees are a type of fee that is paid to process a loan application. The loans span up to seven years. Depending on multiple factors, LightStream provides loans between $5,000 and $100,000.

LightStream offers features that are ideal for a motorcycle loan, and funds can be direct-deposited into your account. The company offers a section of its website where you can find your rate to either purchase a motorcycle or refinance. LightStream also offers you the ability to provide a cash offer on items by placing the loan as a deposit into your account. The company facilitates handling loans online or through the mobile app to achieve better access to your loan needs. 

However, extremely strong credit is expected to receive a loan. In addition, you cannot pre-qualify using the website.

Best for Excellent Credit: SoFi

  • SoFi Personal Loans
    Best For:
    No origination fees
    securely through SoFi Personal Loans's website

    Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive.

    Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.

    Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.

SoFi was first founded by Stanford students in the Stanford Graduate School of Business who wanted to focus on education debt. The company eventually grew as a way for people to finance student loans. Over the years, the company expanded and opened up into mortgages and student loan refinancing for medical students. 

The company offers benefits such as no late fees and no origination fees. Terms span between two years and seven years. The loans do not include hidden fees. In addition, SoFi offers a low amount of comprehensive fees that keep them competitive with other lenders. 

The personal loan works well for motorcycles, and SoFi offers same-day funding for certain situations without hurting your credit score. Its smartphone application makes for easy loan access. Loans range between $5,000 and $100,000. An APR stands for the annual percentage rate and indicates the level of an interest rate for the year. Minimum credit scores for a SoFi loan tend to fall around 680. 

However, the minimum amount for a loan is high. In addition, there is no joint loan option. Joint loans allow more than one person to share the responsibility of the loan. Although there is no joint option, there are co-sign options. Before looking into a SoFi loan, keep in mind that these loans are only available for people who qualify as adults in their states. 

Best for Fair Credit: Upgrade

Upgrade officially began around 2017 and is now headquartered in San Francisco. It is a financial technology company that provides credit monitoring as well as educational tools. 

Upgrade doesn’t have prepayment penalty fees. The company offers low minimum amounts that could be beneficial for someone interested in smaller loans. Upgrade accepts credit scores that begin around 580 and above. The company offers loans between $1,000 and $35,000. The loan terms vary but span up to seven years. 

The company offers positive benefits for people interested in motorcycle loans such as personal loans that are focused on major purchases. For example, Upgrade offers a feature where you answer a few questions and then quickly understand the types of loans and interest rates that you qualify for without the action negatively impacting your credit. In addition, the company allows co-applicants and joint applications, but co-signers are not allowed.

However, Upgrade does charge origination fees and higher APR rates. The higher APR rates are partially explained by Upgrade taking on a larger amount of risk. Lenders evaluate risk using your credit score, and lower credit scores are associated with a higher level of risk for lenders. Although loans are only available for up to $50,000, the amount should be enough for funding a motorcycle purchase. Before deciding on Upgrade, know that its loans are not available in every state. 

Best for Bad Credit: Upstart

Upstart was founded in 2012 as an artificial intelligence (AI) lending company. The company focuses on alternative methods of approval where AI takes center stage. Upstart believes its model to be more accurate than traditional lending structures. 

The company offers a wide range of benefits, including the possibility that funds are potentially accessible within a day. In addition, Upstart benefits include acceptance of newer borrowers with shorter credit histories. Loans go from $1,000 and $50,000 on average. APR rates tend to be higher because the company faces a heightened level of risk when lending to lower credit scores. Upstart offers terms that range between three and five years. 

Upstart's uniqueness comes from how the company focuses on alternative models of understanding a borrower’s ability to repay loans. It takes into account different variables that extend beyond a typical FICO score when deciding on a person’s ability to repay a loan.

A FICO score refers to a credit score and provides details on how likely a person is to repay their loans. The scores are usually three digits, and scores above 670 are regarded as good. Credit scores range between 300 and 850.

Upstart charges late fees and origination fees. Origination fees can be as much as 8%. In addition, Upstart offers limited repayment options and provides no smartphone app. Upstart requires a minimum gross income of $12,000 and offers stipulations regarding employment expectations. In addition, people interested in obtaining a loan from Upstart must be at least 18 years old and have a personal bank account with a valid routing number. 

Best for Comparing Lenders: LendingClub

LendingClub is an online loan marketplace that offers services where potential borrowers can examine options.

LendingClub offers a wide range of resources that help you to compare different lenders. When researching loans, use more than one source and consult with a financial advisor if possible. LendingClub recommends having a credit score in the 600s or higher if you are interested in having a relatively competitive motorcycle loan. The company emphasizes the importance of a strong credit score when applying for personal loans. 

Frequently Asked Questions

Why should I finance a motorcycle?

A motorcycle loan could help you to obtain more than an additional vehicle. Motorcycle loans might be beneficial if you are under a time constraint where you are unable to wait and save money to purchase a motorcycle in full. For example, a motorcycle loan can help you obtain reliable transportation. In addition, repaying on a more affordable vehicle such as a motorcycle can help you to build your credit over time. 

When purchasing a motorcycle, note that auto loans differ from motorcycle loans. Motorcycle loans tend to charge higher interest because motorcycles are viewed as less liquid than cars. 

Motorcycle loans tend to be personal loans, and they are generally unsecured. Unsecured loans may be viewed as more attractive by a potential loan recipient because these loans are not tied to larger collateral such as a house. 

Financing a motorcycle could prove beneficial if you expect to gain additional income opportunities or benefits from being able to own a motorcycle. Look at your current financial situation to be sure that you can afford the loan if something unexpected happens. 

Loans can negatively impact your credit score if you are unable to pay them back promptly. A strong credit score is helpful because higher credit scores often allow you the ability to receive loans with lower APRs and with more flexible terms. Lower credit scores make it more difficult to receive loans that include the best terms because lenders have made an effort to protect themselves against risk by offering higher interest or more complex terms to people with low credit scores. Overall, ensure that you can pay on time to positively boost your credit score through prompt payments.

What is an average term for a motorcycle loan?

The average term of a motorcycle loan varies. Motorcycle loans range between 36 months and 60 months. Terms vary depending on several factors such as the size of the loan and your credit score. 

Not all financial banks or credit unions offer specific motorcycle loans similar to auto loans. Instead, motorcycles are usually financed by personal loans that encompass a broader range of potentially financed items. Before entering into a loan, look at available options and your credit score. People with higher credit scores receive better APRs as well as better terms. 

Personal Loan Requirements and Criteria

Personal loans are an excellent option for obtaining a motorcycle. Before taking a loan, consider speaking with a financial advisor to better understand your available options and level of risk. Like with all loans, you face financial risk if you suddenly are unable to pay. Make sure that you understand the risks tied to a specific loan before you decide. 

Personal Loan Considerations for Motorcycles

Before taking out a loan and purchasing a motorcycle, decide on the type of bike and price point that works best for you. Motorcycles vary in price, and you want to know how far your money will go. In addition, each state has different motorcycle regulations. If you do not already have your motorcycle license, research what your state requires to decide if you need to budget for additional funds in your loan. 

In addition, read the fine print with personal loans to make sure that you are receiving the best type of loan for you. For example, some loans have additional fees or charge heavy late fees that could potentially add up over time. 

Getting a motorcycle loan can prove beneficial if you require an immediate mode of transportation for one person. However, before purchasing a motorcycle, get comfortable driving a motorcycle around your city. If you are licensed but don’t own or frequently drive a motorcycle, rent one to get a better feel for your surroundings. Because motorcycles are so different from cars, you want to be sure that you feel comfortable with your intended purchase beforehand. 

In terms of loans, a personal loan is usually the best option for a motorcycle loan. One reason is that such loans do not require heavy collateral. Loans that require collateral are riskier for the borrower because you have the potential to lose the items that you have put up for collateral if you are unable to pay. For example, if you have placed your home as collateral but are unable to continue paying such loans. then your home is in danger of being lost. Personal loans for motorcycles usually do not require collateral. 

Personal Loans vs. Credit Cards when Financing a Bike

In terms of purchasing a motorcycle, personal loans offer a single lump sum amount. The funds are tied to specific expectations and details such as the terms that stipulate how the sum is expected to be repaid. A loan would help you to execute the motorcycle purchase if you do not immediately have enough money on hand. Personal loans help you to achieve your goal of personal transportation and potentially make different job opportunities accessible because of your newfound ride. 

In contrast, a credit card could be used to purchase a motorcycle, but the purchase should then be paid off within a billing cycle to avoid additional interest. Purchasing a motorcycle on a credit card is an option that tends to work best if you can quickly pay off the purchase. 

Overall, motorcycles can be purchased using either a motorcycle loan or a credit card, but a personal loan works better for people that do not have access to immediate large funds and would like to pay the borrowed amount back over a set period.