Bad Credit Motorbike Loans

There may still be options available if you have bad credit and are looking to buy a motorcycle. Get the wheels in motion with Savvy today.

No obligation. It won't affect your credit score.
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, updated on August 24th, 2023       

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If you are aware that you have a bad credit history, you may be worried that you may not get approved for bike loan. With different lenders offering help to different types of borrowers, even if your credit history isn’t the best, there are still options to get a loan for the motorcycle you like. Our guide will give you all the information you need about a bad credit bike loan.

Can I get a motorbike loan with bad credit?

The simple answer is yes, but every application is assessed on its own merits and on a case by case basis. 

  • Do you have any unpaid defaults?  

If you have bad credit, the first question you might encounter when you apply for a bike loan is, ‘Do you have any unpaid defaults?’ It’s preferable that any defaults that you have are now paid in full, but that being said, there may be lenders who are willing to look past them in certain situations, such as if they aren't recent. If you have the means to do so, repaying defaults or getting a payment plan with a creditor can help your chances of approval. An experienced finance brokeris usually best placed to navigate this type of enquiry for you and place with you with the right lender to secure approval.    

  • Do you have an explanation for all your defaults?

If you have any defaults, it's important that you can provide sufficient explanations. Lenders and brokers need to know the following points. 

  • When did the default occur? 
  • Is the default paid or under a payment plan? 
  • Under what circumstances did the default occur? 
  • Is your financial situation improved since the time of default?

If your answer proves that your past financial difficulties were temporary, and you can now afford past debts and ongoing loans, your chances of getting approved for a motorcycle loan will increase significantly.  

  • Are you a Discharged Bankrupt or Part IX? 

Please be aware that most lenders do not provide bike loans to borrowers who are currently bankrupt or under a Part IX debt agreement. You'll need to be discharged before any lender is prepared to offer you funds. If you have a Part IX agreement, there are options whilst you are in your Part IX but you'll generally need to have shown at least 12 months' worth of good repayment history in your Part IX before approval is granted. As mentioned previously afinance brokercan help considerably to determine whether you can qualify for a bad credit bike loan or not.

  • Do you have a motorbike licence?

Some lenders require bike loan borrowers to have a motorbike licence. If you do not have a bike licence yet, you will need to consider getting one as it will give you more options for approval.

Should I buy from a dealer or a private seller?

It's entirely up to you. For most lenders, a motorcycle purchased from a dealer is as good as one from a private sale. Dealers come with a bit more security and warranty and have a more extensive choice of bikes to offer. At the same time, dealers charge more as they need to cover their cost. So, a private sale may give you a better price but it's wise to do all the relevant mechanical checks before purchasing as a private sale doesn’t come with the same guarantee’s that you get from a licensed dealership.  

What kind of motorcycle can I buy on finance?

Any motorbike on the market can be financed, from a dirt bike to road bike, sports bike, to a classic triumph or Harley.   

  • Dirt bike and on-road bike

Form the lenders’ point of view, dirt bikes have higher risks than general on-road motorcycles. That isn't to say they won't finance them; it's just that they may be more careful when processing dirt bike loan applications.  

  • On-road bikes need to be new or registered

If you're considering an on-road bike, it can be new or used. Usually, lenders require used bikes to be registered and have an age or odometer limit for used bikes. For example, some lenders require the the motorcycle be no older than 12 years at the end of the loan. However, some lenders may not have age restrictions but instead require the odometer reading of bikes are not more than 300,000km.

  • How much should I borrow?

Your lender will decide how much you can borrow based on your income and expenses. You can apply for the amount you require and they'll assess if they can pre-approve it. If the loan amount requested is more than what they can approve based on your income, the lender will provide you with a counteroffer. 

At the same time, you should also consider a payment that you can easily afford. You can use a loan calculator to find out what your repayments can be and decide how much you would like to borrow.  

Do I have any alternative if I want to purchase a bike with bad credit?

Yes. You can consider a personal loan as an alternative.  

While personal loans may have higher interest rates, they are practical for applicants with bad credit that are maybe looking for a small amount, such as in the vicinity of $5,000. Not only will it let you borrow the funds you need to buy a motorcycle, but it will also give you a chance to improve your credit history by developing good repayments history as well.  

There are two types of personal loan: secured and unsecured. If you're happy to let the lender take security over a fixed asset you have (a car, bike, caravan or boat), you'll be able to apply for a secured personal loan. This may allow you to borrow more compared to an unsecured personal loan. The benefit of an unsecured bike loan is that there's no restriction on the age of asset. It requires no collateral but, because of your score, you'll generally be limited to around $8,000.  

How to improve your chances of getting a bike loan with bad credit

Repay or arrange a payment plan for your default asap

Although you might still get approved for a bike loan with unpaid defaults, repaying or arranging a payment plan will increase your chances of approval

Improve your bank statement conduct

If you have bad credit, lenders will check your bank statements when approving your bike loan. Lenders value bank statements because they reflect your spending habits and income details. Bank statements with good conduct will help you to get a bike loan.  

What is good bank statement conduct you might ask? That is when you do not have regular dishonours, overdraws and gambling expenses. At the same time, your income is stable and the lender can see regular consistent income deposits. Furthermore, they don’t want to find any undisclosed loans. If you've never paid attention to your bank statements and have some of the above issues present on them, it's important to adjust in order to improve your bank statement conduct and overall spending habits.  

Repay your payday loans

Multiple payday loans are a big no-no for bad credit bike loan lenders. Lenders are highly likely to reject your bike loan application if you have multiple payday loans, or potentially if you still have one. It's wise to repay your payday loans before you apply for a bike loan. 

Keep your income and expenses stable

Not only will regular income and spending make your financial life more comfortable, but it'll show lenders that you can be considered a reliable borrower. In some cases, lenders might prefer applicants with slightly lower but stable earnings and expenses to those with high income but unpredictable expenditure.   

Consider a co-applicant or a deposit

Adding a stable income and good credit co-applicant into your bike loan will allow you to borrow more and maybe have access to a lower interest rate.  

Contributing a deposit can help, a deposit will also lower your loan amount and repayments. A good amount of savings also shows your lender that you have excellent financial management skills and will help counteract the defaults that you have.

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