A loan to finance your motorcycle
A motorcycle or scooter credit to feel free! Passionate about the world of two-wheelers or just looking for a means of transport to avoid wasting time in traffic, you decided to buy a motorcycle or a scooter? Perfect!
To help you get your project up and running, your bank will systematically offer you consumer credit. How exactly does this motorcycle financing operation work? The answer is here!
Motorcycle financing: the main forms of existing consumer credit
New or used, motorcycle financing can be done via various consumer loans, just like it is for a car. Among those with a storefront, personal loan, and affected credit. Another relatively common financing option is rental with the option to purchase.
If for these credits, the duration and the method of repayment vary from one bank to another, the amount granted generally does not exceed 75,000 dollars. However, the minimum repayment period is always 3 months. Let’s take a closer look at each of these formulas.
The credit allocated is intended exclusively for the purchase of a specific good or service. As such, you must provide proof of purchase to the bank. Depending on the product to be financed, we will talk about motorcycle credit, car credit, work credit, etc. One of the major disadvantages of the affected loan? If you change your mind along the way, you will still be required to reimburse your monthly payments … without the possibility of using the amount granted (or the balance) to finance another project.
Personal loans stand out for their flexibility. Unlike the affected loan, you have no account to report to the bank: you are free to use the amount borrowed as you wish, for one or more projects. This can then be used to finance a motorcycle as well as a car or to finance furniture, a trip, etc.
Rental with option to purchase
If the rental with the option to buy is included in the list of consumer credits, it cannot be said that it is a loan proper. Concretely, you are the vehicle tenant for a fixed period (generally, 2 to 5 years).
A rental contract with an option to buy is interesting especially if you want to change the vehicle often and dispense with its resale.
On the other hand, if you exercise the purchase option at the end of the rental contract, the vehicle will ultimately cost you more than if you had bought it directly via a personal loan or an assigned credit. Conventionally taken out as a concession, an LOA contract remains accessible via traditional channels (bank or credit institution), as with all consumer loans.
Compare motorcycle financing offers: the practical mini-guide
In order to benefit from the most advantageous motorcycle financing, several elements of comparison are taken into account. First, the rate, and more particularly the annual effective annual rate (APR). This is without a doubt the most important data of a loan offer.
The APR takes into account all credit charges (insurance, nominal rate, administration fees …), and therefore designates the total amount. All banks are required to include this rate on their loan contract offers.
Good to know: rental with option to buy, the exception that proves the rule
Unlike other consumer loans, this famous rate does not have to appear necessarily in a rental contract with an option to buy. To represent the total amount of the loan, there is another solution: deduct all of the monthly payments from the capital borrowed.
For the financing of your motorcycle, whether new or used, also pay attention to borrower insurance. To pay less, you can very well take out a loan in a bank, and insurance in another establishment. Another important parameter: prepayment penalties. As you never know what good surprises life can hold for us (gain, donation …), the best is that your loan contract does not contain any! Finally, remember to compare offers for the same repayment period.