Owning a vehicle, like a motorcycle, can be quite beneficial; it offers convenience, saves time, and makes daily commutes convenient. Motorcycles are not just fast but also easy to maneuver in traffic. That said, their price can be a deterrent for buyers on a budget. Plus, paying a down payment to secure a loan is not always feasible. For that reason, individuals can look into motorcycle financing options that don’t require a down payment.
1. Look into used options
Individuals can buy a used or cheaper motorcycle model to avoid making a hefty upfront payment. The strategy works well for people working with a tight budget. Additionally, regular maintenance and gas can add to the overall cost of buying a motorcycle, so looking into a used vehicle can help individuals stay within their budget.
Additionally, the value of a vehicle goes down as soon as it leaves the dealership. Even if its odometer registers three miles, the motorcycle is still officially sold as a used one. This means that one might stumble upon a motorcycle that has only traveled a few miles and end up purchasing a new one without paying the price of a brand-new one.
2. Get a pre-approved loan
Pre-approved loans can help individuals buy a motorcycle without paying any out-of-pocket upfront costs. Before the loan is disbursed, individuals must submit their financial details to the lender. The organization considers all the relevant information to finalize the maximum loan amount one will be granted.
Pre-approved loans are also a means for individuals to check their loan amount qualifications. It gives them a better bargaining position to convince lenders and finalize the loan on more profitable terms. It also helps individuals have a realistic budget for their motorcycle purchase.
3. Check credit score
Finding a financing option for motorcycle purchases is easier for individuals with a solid credit score. One of the primary things lenders look at in loan applications is the applicant’s credit score. The score requirement can change depending on the lender and the loan amount an individual has applied for. For instance, higher loan amounts require higher scores.
Individuals can take some measures to improve their credit scores. This includes setting up the autopay option so one does not default on payments, getting a secured credit card, and diversifying the types of credit one has. Besides that, frequent credit checks should be avoided, as they lower one’s score. Individuals must make these changes a few months before applying for loans to achieve a better score.
4. Check interest rates
Zero-down payment loans are a great way of purchasing motorcycles on credit without making any initial payments. That being said, it is important to remember that comparatively higher interest rates accompany these loans. Inadvertently, this might also mean a longer loan term.
Individuals should speak to different lenders and check the terms and interest rates they offer for the loan. Even a slight difference in the offered interest rates can substantially impact the compounded amount they have to repay the lender.
5. Pay with credit cards
Credit card purchases are an easy and efficient option if one wants to avoid any down payments when buying a motorcycle. But before that, individuals will need to speak to the dealership or check the available payment options to verify whether this mode of payment is acceptable.
Individuals can also discuss the monthly repayment with the dealership. In this case, the seller will ask for details to check the buyers’ credit score, credit history, and other relevant information. This data can be used to set the repayment amount and terms. If that is not an option, the buyer can make the down payment via their credit card and continue the purchase as planned.
6. Look into personal loans
Motorcycle buyers can apply for a personal loan and use it for the purchase if they want to avoid any down payments. That being said, they will need to check the loan amount they are granted. It needs to cover the cost of the motorcycle. If the approved loan amount is lower than the price of the vehicle, individuals might have to put together some money to go through with the purchase. This is possible because some banks do not require details about how someone plans to use a personal loan. That said, it is important to remember that a personal loan’s interest rate is considerably higher than an auto loan. Purchasing a bike with a personal loan can save one from a down payment at the time but can turn out to be a costlier purchase in the long run.
7. Borrow money from family or friends
Individuals who do not want to get into the ordeal of loan applications and negotiations can seek help from family or friends. They can borrow the required amount from their family on mutually acceptable terms. The parties involved can draft an agreement that includes details about the transaction and repayment terms. The lender and the borrower can discuss the loan tenure, interest rate, monthly repayment amount, and what needs to be done if a payment is defaulted. It can be a cheaper loan compared to the one buyers can secure from banks or other financing firms.
