Over the past year, the motorcycle loan market saw motorcycle lenders start taking a closer look at motorcycle loans due to the problems they were having with bad credit mortgage loans. In the New Year you can expect things to remain a little stricter. The first part of the New Year will see banks facing much more pressure due to bad credit mortgage loan losses. These losses are affecting all loans but in general motorcycle loans may be impacted a little more.
With a tightening motorcycle loan market what are you as a motorcycle buyer to do? First off adjust your expectation. Do not expect the low motorcycle loan rates of the past will continue into the future. Also, expecting a tightening of credit in the motorcycle loan market would suggest that you should get your credit inline. Make sure all your credit card payments are on-time and try to get your balances down. In general, banks today are a lot more sensitive to credit card debt. If your credit cards are maxed out this is a good excuse for a bank to decline you. Also if you have late payments on your credit report this is another great reason to decline you.
There is some hope for borrowers on the horizon. Fair Isaac is in the process of developing a new credit scoring model that will be more favorable to those who are current on their payments even though they may have had some issues in the past. These changes will probably slowly flow into motorcycle loans, but it may take some time. Normally lenders do not adapt to the latest and greatest models right off the bat.
From a motorcycle buyers perspective online motorcycle financing is a much easier way to get a loan than traditional methods. With the power of the internet there are plenty of options for motorcycle buyers. Online motorcycle lenders are aggressive and have some of the best interest rates online. They have quick processing and high quality customer service and best of all online lenders make it easy to compare motorcycle loan offers.
As a motorcycle buyer if you are not approved in the New Year, you should not get frustrated. In general lenders will be much more critical of all the loans they issue including motorcycle loans. Documentation will increase and the verification of documentation will also increase. If you are not approved for motorcycle financing in the New Year, you should simply move to the next lender. There will be a wide variation between banks so just because one bank declines you does not mean that all banks will decline your motorcycle financing application.
The nice thing about online motorcycle loans is that it makes trying different banks easier. In the comfort of your own home you can submit an application and get a response almost instantly. If you get approved the bank will normally even overnight a check which you can use for your purchase. Then all you have to do is simply walk into a motorcycle dealer and pay for your bike with the check.
You may find in 2008 that motorcycle lenders also force you to put money down for a motorcycle loan where in the past they were more willing to give you a zero down payment motorcycle loan. This is simply a reflection that the banks are way under funded and need to be very wise about their loans.
Remember a motorcycle is not a car so banks view motorcycles differently. In general banks see motorcycles as a higher risk for two reason: 1. It is a toy; 2: It has a higher chance of total loss during an accident. It is important to remember this when getting a motorcycle loan because you may be required to get full coverage insurance from the lender. Sometimes your motorcycle insurance can cost a lot of money so be sure you get some quotes before you buy the motorcycle. This will help you determine if you can afford the motorcycle insurance.
Getting a motorcycle loan sometimes can be difficult. If this sounds familiar to you from past experience it is important you do not let it overwhelm you. Simply remain positive and if you are declined go to the next lender. Remember in the New Year it will be harder to get approved than in the past so persistency will pay off.
