Complete Guide to Motorcycle Loans

Updated on April 9, 2024

At a Glance

  • Motorcycle loans are available from banks, credit unions, and online lenders.
  • These loans provide financing for new motorcycles and are beneficial for those lacking immediate cash.
  • Factors influencing terms and rates include loan amount, lender, income, and credit score.
  • Borrowers can choose between secured loans (requiring collateral) or unsecured loans (based on creditworthiness), and manufacturer financing is an alternative to consider.

Getting a motorcycle is not that simple, especially if your account balance is not in its best state. If your dream is to ride a two-wheeler, you should make sure you purchase the right model. But what do you do when that price tag does not fit in your budget?

Many people opt for a motorcycle loan to pay for their new vehicle. These loans can be obtained from many places, even online. But is this the right move? Here is a guide on these loans so you know what you can expect when getting one.

Are There Loans for Motorcycles?

Yes, there are loans for motorcycles. They can be obtained from banks, credit unions, or online lenders. Once you are approved, you can use the sum to finance a new motorcycle.

Even though motorcycles are cheaper than cars, it is still difficult to get one unless you are financially stable. New motorcycles tend to cost over $20,000. For a second-hand model, you can expect to pay $7,000 – $8,000.

This type of financing is great for individuals who need a motorcycle right now, but don’t have the cash.

How Do Motorcycle Loans Work?

Motorcycle loans are similar to auto loans, with the only exception that you get them for a motorcycle instead of a car. If you cannot afford to purchase a motorcycle in full, you can use this form of financing to buy the two-wheeler before your favorite model runs out.

Not all motorcycle loans are the same. In fact, they all vary based on a few factors, such as the amount of the loan, the lender, your income, your credit score, and so on. These aspects all influence the terms and rates of the loan. Whether the loan is unsecured or secured also plays a role in your rates and terms.

Secured Motorcycle Loan vs. Unsecured Motorcycle Loan

People who seek motorcycle loans have two options to choose from: a secured loan or an unsecured loan. Generally, most individuals prefer unsecured ones as they do not have to put their vehicles at risk this way. Obviously, these come with other downsides.

A secured loan requires the use of collateral. In the case of a motorcycle loan, this is usually the two-wheeler you were eager to get. If you fail to pay off the loan, you might end up with the motorcycle taken away by the lender to cover the sum.

More often than not, a secured loan comes with decreased interest rates – an aspect that is very attractive to borrowers. After all, the lender is willing to accept lower interest rates since the risk is not as big for them due to the collateral.

While this is the case, some lenders require a down payment for secured loans. It’s inconvenient at first but can bring down the amount you have to pay off. Thus, it also reduces the interest.

Now, unsecured loans are another story. They will not require you to use your new motorcycle as collateral. Your credit is the one that matters the most when a lender is deciding whether you are eligible for financing or not.

It is important to keep in mind that just because the loan is not secured, it doesn’t mean the lender cannot take away your new bike if you do not pay off the loan. This can still happen.

Secured loans can be obtained from a bank or credit union. As for unsecured loans, you can get them from online lenders.

Online loans have the advantage of letting you pre-qualify for them before choosing the lender. This way, you’ll take a look at the loan amount, terms, and rates first.

Manufacturer Financing as an Alternative to a Motorcycle Loan

Instead of going for a loan, many bike lovers opt for manufacturer financing instead. It’s more convenient, and you can get some pretty good rates.

Motorcycle manufacturer financing involves getting financing for a bike directly from the manufacturer. You can go to local dealers and find out what your options are. Harley Davidson is one of the brands providing multiple financing options.

Similar to loans, each manufacturer financing option will come with different rates and terms. So, it’s essential to shop around before settling for one.

How to Choose a Motorcycle Loan

When you are trying to decide on a type of financing, there are a few factors to consider. Here are the criteria to use when comparing multiple motorcycle loans:


APRs tell you how much you have to pay for a loan in fees. More specifically, it will include the interest rate and extra fees.

Secured loans tend to have lower APRs, whereas unsecured ones have rates between 6% and 36%. Look for the loan with the lowest APR. Keep in mind that a good credit score might help you get a lower rate.


Each lender will require different things from applicants. The two most important aspects they will want to know are your credit score and your income. They also look at the DTI to figure out if you’re risky or not.

You might also be able to find a lender that offers you a loan with bad credit. For the most part, though, they like to see good or excellent credits. Such scores will instantly boost your chances of approval.


Repayment terms vary from one loan to another. While some lenders want you to pay off the loan faster, others offer up to 7 years. With a shorter repayment term, you don’t pay as much interest. However, a longer period will include lower payments every month.

Extra Features

Some motorcycle loans come with a few perks. For instance, some options come with a mobile application, while others fund you the very next day.

Consider what you want from the loan and choose the extra features based on that.

Motorcycle Loan FAQ

Here are some commonly asked questions about motorcycle loans:

How do I get a motorcycle loan?

In order to get a motorcycle loan, you must compare several options. Next, you can submit your application and documents, then wait for the approval.

How long are motorcycle loans?

Repayment terms vary for each loan, depending on the institution you’re choosing. Generally, they go from 2 years to 7 years.

What are motorcycle loan rates?

Unsecured loans come with lower rates, while secured loans have higher ones. On average, secured loan rates are between 6% and 36%.

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Final Thoughts

Have you fallen in love with a gorgeous motorcycle? Are you ready to choose a funding option for it? Consider a motorcycle loan, but make sure to compare various lenders so that you pick the best terms for you. This way, you’ll make your dreams come true.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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