How to Get a Motorcycle Loan with Bad Credit

How to Get a Motorcycle Loan with Bad Credit

Usually, Motorcycles are cheaper than four-wheelers, but still, you might need a loan to buy one. You can apply for different loans to buy a motorcycle without going broke. However, if you wish to buy a motorcycle without stellar credit, you will encounter problems.

Lenders hesitate to finance your motorcycle. To secure a loan for your dream bike, you need a good credit score.

Your credit score is a yardstick to gauge your honesty and financial situation. Even though it’s not easy to finance your motorcycle with bad credit, it’s not impossible either.

Nonetheless, there are a few ways through which you can finance your motorcycle by securing a loan on good loan terms or increasing your credit score.

How to Get a Motorcycle Loan with Bad Credit

What type of loan do you need for a Motorcycle Loan?

Before going forward, let’s see what a good credit score is. FICO is the most trusted credit score company, with scores ranging from 300 to 850. A credit score above 670 or 700 is considered a good score, with 850 as the highest.

If you want to get a good deal, improve your credit score to at least 670. If you are below this level, you will struggle for loans with low-interest rates and reasonable terms.

How to Get a Motorcycle Loan if you have bad Credit

Bad credit can create hurdles for you, but it can’t stop you from finding a loan entirely. If you are willing enough, you will get a loan for financing your motorcycle.

There are a few things you need to consider before applying for loans.

Understanding your credit score

It’s important to understand and review your credit report. There are three credit bureaus, namely ExperianTransUnion, and Equifax, from where you can get one free copy of your credit report per year. It helps you read and analyze your credit score report. Lenders also perform due diligence and let you know if you are eligible for the loan or not.

Budgeting the right amount you can pay per month

It’s essential that you do a reality check before applying for any loan. Make sure you have the source of income through which you can pay back the monthly amount. You should obtain a loan for a motorcycle that you can afford. Otherwise, it will further push you into a tight spot. A great option may be for you to consider getting a used motorcycle to lower your cost.

Research about different lenders

It might seem complicated, but if you want to get a good deal with a low down payment, low-interest rate, and lengthy time frame, then you have to do the due diligence. You need to know how one lender is better than the other for you. Review the terms and policies of various lenders to avoid scams and exploitation.

Avoid Bad-Credit Loan Scams

Many will search for an advantage in your necessity and try to lure you into Bad-Credit loan scams. Beware of such scammer lenders. Here are a few signs of such people who can’t provide loans but only scams.

  • They have an online presence only with no physical address
  • With an unsecured website and anonymity, they ask you for an upfront fee
  • Genuine lenders deduct such fees from the loans they provide
  • They don’t possess a Federal Trade Commission license
  • Improve Your Credit Score

There are multiple disadvantages of obtaining a loan with bad credit. If your dream motorcycle can wait, you should probably work on improving your credit to get favorable loan terms. We have stated various ways through which your credit score can get better.

Types of Loans

Don’t lose hope if you can’t improve your credit even after trying. There are some bad credit motorcycle loans options you can explore. Let’s go through them:

Dealer financing

Dealer financing means directly contacting the dealer or manufacturer of the motorcycles. In this case, you are not taking loans from someone else to finance your motorcycle but the motorcycle dealer or manufacturer itself.

The dealer either refers your application to a lender or provides you with in-house financing.

What is in-house financing?

In-house financing is also known as buy here, pay here financing. The dealer involves third-party lenders and passes your application to them. A financial institution might consider your loan amount needed and approve your motorcycle loan even if your score is below the minimum credit score required.

In case your loan application has been approved, you will make monthly payments. They don’t check your credit; instead, they ask for proof of your income and residence to easily reach out to you.

However, in-house financing has its fair share of downsides.

  • You will pay a down payment
  • You will have higher interest rates
  • The lenders and dealers will have your income and residence information
  • They will somehow keep an eye on you in case of late payment or no payment

Overall, in-house financing doesn’t seem a good idea because their interest rates are much higher than banks or credit unions.

Harley Davidson is an example of manufacturer financing. They finance your motorcycle on certain terms for new as well as used motorcycles if you are buying a Harley-Davidson model. They offer loans on interest rates as low as 3.49% without any down payment, but it’s good to pay a down payment to get low monthly amortization.

Third-Party Loan

A third-party lenders consider an auto loan as a necessity for people, but many consider a bike a luxury vehicle and not a necessity. Therefore, lenders typically provide bad credit car loan over bad credit motorcycle financing.

However, even if you don’t have excellent credit you still have a few financing options with online lenders to pick the best deal for yourself.

Myautoloan. com is an online network lending money to people with poor credit for automobiles only. Nonetheless, a few of its partners provide loans for motorcycles too.

Myautoloan is a network and not an individual; that’s why you might receive multiple lending offers to your one application. Compare and pick the one with the lowest interest rate.

Similarly, you can apply to Motorcycle Lender for a loan to finance your motorcycle. It is a lending network offering loans even if you have bad credit.

You can receive up to $40,000 unsecured loan with an interest rate of 6.99% APR. You can select from 3- or 5-year loan terms.

Personal Loan

If you have failed to approve a motorcycle loan, apply for a unsecured personal loan. However, personal loans are only good for use and cheaper motorcycles. Personal loans have very high-interest rates, up to 35% APR for people with bad credit.

Some good personal loan lenders are

Another option is asking a family member co-sign for you if you cannot get approved on your own.

Collateral Loan

A collateral or secured loan means that the borrower gives an asset to the lender. It assures lenders that they won’t be at a loss if the borrower can’t return the loan. In the case of a motorcycle loan, your motorcycle can be the collateral.

If you have other assets like a house to keep as collateral, you will be able to receive big loans with low-interest rates and soft terms with guaranteed approval.

However, be careful when you keep an asset as collateral because you will lose that asset if you default.

Apply for a collateral loan only if you have a temporary hard time and can pay back the loan.

Tips To Improve Your Credit

Instead of taking loans with a low credit score, you should work to improve your credit first.

Let’s explore how you can improve your credit.

Paying Bills on Time

Paying your bills on time is the most obvious way to increase your credit. Not only monthly bills but your daily bills can also help boost your credit score. Avoid late payments at all cost as this will decrease your score.

Sign up for Experian boost to submit your everyday utility bills, cell phone, and subscriptions like Netflix or Apple TV into your score to instantly increase your credit score.

Reducing Debt

Lenders look at your debt-to-income ratio. If you earn way less than what you owe to lenders, they will surely hesitate to provide you with a loan for a motorcycle. Therefore, start paying off your debt as much as possible to improve your poor credit.

Check for Errors on Your Credit Report

Credit reports are now easily available and easy to read. Take a few minutes and review your credit report for possible errors like late payment (when it was not so), wrong date of first delinquency, account reported open while you have closed it.

These errors can negatively affect your credit. That’s why you should take the time out to remove them from your credit report.

By employing these tips, your credit score will increase over time and can take advantage of credit approval with the lowest rates with better loan terms and avoid fees such as an origination fee.


Financing your new motorcycle through a loan with bad credit score might be difficult, but it is possible. We advise you to improve your credit through the tips above to get a better interest rate. If you apply for a loan with less than ideal credit, you could end up paying high interest rates.

If you absolutely need a motorcycle, then don’t rush the process as getting the best loan could take a long time. Research the different loan options and thoroughly read their terms. Some lenders tend to exploit needy individuals, don’t fall for such scammers, and apply to loans that you can really afford to pay back.


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