Countless resources are available for those thinking about refinancing a car, but what about motorcycle loans? Does refinancing a motorcycle work the same way as it does with a regular car loan?
Read on to discover the what, why, and how of refinancing your motorcycle.
Refinancing means paying off your old motorcycle loan with a new loan, preferably with better terms.
You may want to refinance if…
You want to save money
You got your loan with a dealership markup and were eligible for a lower rate
Your monthly payments are too high
Your budget is too tight
Your credit score went up
Interest rates have gone down
You want to add or remove a co-borrower
You want to pay off the loan sooner
There are plenty of things to consider when deciding whether to refinance and which lender is offering the best deal for you. It’s important to ask yourself, why do you want to refinance your motorcycle?
You can save money if you refinance to a lower annual percentage rate (APR).
You can lower your monthly payment by refinancing for a longer term.
If interest rates have dropped, you got a bad deal in the first place, or your credit score has gone up, you may be able to both pay less and save money overall!
Figuring out your ‘why’ can help you make a more informed decision.
Maybe your monthly payments are feeling too high because inflation has raised your other costs, or your spouse lost their job and you need to prioritize other bills.
Or maybe your credit score has improved and you’re now eligible for a more favorable interest rate. For example, if you had a credit score in the 600s before, but it’s now well into the 700s, you could well be eligible for better loan terms.
Think about why it is that you want to refinance as you learn more about your options and it’ll help you make sure you choose the right refinance for your unique situation.
Whether you are trying to pay off your bike more quickly, or simply lower your monthly payments, you should be able to save money in the short-term, the long run, or both when refinancing your motorcycle loan.
Just like with refinancing a car, when it comes to refinancing a purchase as expensive as a motorcycle, you want to do your due diligence and make sure you’ve considered and reviewed all possible factors.
For example, it may be possible to refinance with less than excellent credit, but it will likely mean paying higher interest rates. In that case, a lower monthly payment now could cost you more in the long run – is that a sacrifice you’re willing to make for more wiggle room in your budget now?
Similarly, be sure to check for any fees on your existing loan and go over your options carefully to ensure your refinance meets your goals. Some loans have pre-payment penalties that could cancel out your savings.
If all of this sounds confusing, it’s because it can be if you don’t review the information thoroughly. Fortunately, when you refinance with Auto Approve, we’ll work with you directly to review your options, make sure you understand all the terms of your new loan, and handle the paperwork for you – even the DMV!
Review your options
Consider your new payment
Review your credit score
Check for fees
Gather your paperwork
Lock in your refinance
Many people assume that refinancing anything is a lengthy and complex process.
In fact, with proper preparation and help from the professionals at Auto Approve, refinancing doesn’t have to be overwhelming at all! Plus, refinancing your motorcycle loan can save you thousands over time, which makes the process worth it.
Here’s what you need to do.
Start by comparing current interest rates broadly with the rates when you got your loan. This will help you feel more prepared for the range of options that might be available to you. Then, compare rates from a few different lenders and how they stack up against what you currently pay.
Rates will vary by lender, your credit score, and the age and make of your motorcycle. Each lender comes with their own credit score requirements. In general, the higher your credit score, the better the rate you will be able to secure.
Using Auto Approve to get a quote will allow you to review several different options at once.
Use a refinance calculator or review your quote options to figure out what you could be paying with a refinance and what you’ll pay overall with each option, then make sure those final numbers fit within your ideal budget.
When you apply for refinancing, lenders will submit a hard inquiry on your credit.
This will temporarily lower your score. It will bounce back within a year, but you’ll want to consider whether you’ve recently had a hard credit check or anticipate having your credit checked for any upcoming major purchases. If you’re about to buy a house, for example, now might not be the best time to refinance.
You’ll also want to know in advance (before lenders perform a hard check) where your credit stands, how it stacks up against any credit score requirements from different lenders, and how it has changed since you got your initial loan.
Fees are where a lot of loan companies make their money and are written right into the leasing or lending contract. The fees can come from a variety of things related to the application process. Be sure to ask any potential lenders if they charge any fees and thoroughly check the paperwork on your existing loan to find any penalties you might need to pay should you choose to refinance your motorcycle.
By organizing the documentation you are going to need ahead of time, you’ll be able to expedite the refinance process. Things you might want to gather include:
your vehicle identification number
Your motorcycle’s make and model
the value of your bike
your motorcycle insurance information
details about your existing loan
When all of this is gathered, you can complete any application form quickly and submit your paperwork to start saving money.
Once you’ve found a lender and an offer that makes sense for you and double checked that everything is in order, it’s time to refinance! You’ll need your new lender to work with your old lender to get the old loan paid off – or, if you choose to refinance with Auto Approve, your dedicated agent will handle the paperwork for you.
Refinancing your motorcycle loan can be a simple way to put more money back in your wallet.
Here at Auto Approve, we make refinancing quick and easy. Get your free, no credit check, no commitment quote today.