What’s The Best Motorcycle Loan In 2021? A Helpful Guide



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Motorcycle loans are a popular option, and many manufacturers offer low-rate financing options that are certainly worth considering but may not necessarily be the right choice for you.

I have always found that an unsecured loan from an online lender has always worked well for me as they are easy to apply for, and you can check out your preferred lender from the comfort of your own home.

After scouring the options online and reading up on the best motorcycle loans available on the internet, I came across a lender which has an excellent reputation, has an easy and quick way to apply for a loan if you have a good credit rating and the process can be completed from start to finish with the finances being available in your bank account the same day!

Here is the best motorcycle loan in 2021:

The name of this company is LightStream who is a consumer lending division of SunTrust Bank, the flagship subsidiary of SunTrust Banks Inc., one of the nation’s leading financial services companies. As well as the easy and quick financing process, this company also offers low fixed rates, which I found to be some of the lowest rates available on the internet, and offers loans from $5000 – $100,000. Ideal for purchasing a new motorcycle or anything else come to think of it.

Sounds good? Then carry on reading!

This is what LightStream has to say about their service:

‘LightStream delivers a revolutionary loan experience that allows customers to focus on their purchase, rather than on their financing. With our innovative lending products and proprietary technology, consumers with strong credit profiles can receive highly competitive, fixed-rate financing via an easy, fast, and virtually paperless loan process. From the convenience and comfort of their computer or mobile device, customers can apply, be approved, sign their loan agreement and receive their funds, as soon as the same day of their application.’

As well as using a LightStream loan to finance your new dream motorcycle I also found out that they offer loans that enable you to finance a wide majority of other purchases you may wish to make which include:

  • Car Loans & Refinance Loans
  • Home Improvement Loans
  • Pool Loans
  • Timeshare Financing & Vacation Ownership Loans
  • Boat Loans & Aircraft Financing
  • Fractional Loans
  • IVF Financing
  • Jewelry Financing
  • Medical & Dental Financing
  • Adoption Financing
  • PreK-12 Education Loans
  • Horse Loans
  • and almost anything else

LightStream’s Rate Beat Program

LightStream will offer a rate .10 percentage points lower than the rate offered by a competing lender subject to satisfactory evidence being provided that you were actually approved for a lower rate with another lender for the same loan terms offered by LightStream by no later than 2 p.m. Eastern time one business day prior to loan funding. The Rate Beat Program excludes secured or collateralized loan offers from any lender and the competitive offer must be generally available to any customer with a similar credit profile. Terms are subject to change at any time.

When I researched the internet for a motorcycle loan I found that Lightstreams’s Rate Beat Program was really an excellent add-on and should make you feel confident that you will be getting one of the best rates available within the market today.

It really is a great feeling to know that you are not overpaying for your motorcycle due to high APR’s when compared to other loans which are available in the marketplace. This can make a real difference to your finances when you come to trade in your motorcycle or sell it in the future as the less interest you are paying on your loan, the less the bike has cost you.

I also found out that LightStream offers a LOAN EXPERIENCE GUARANTEE whereby if in the unfortunate circumstance you were not satisfied with the experience of getting a loan from them they will send you $100. This is carried out by the customer completing a questionnaire. The guarantee runs out 30 days after you receive your loan.

I thought the loan experience guarantee was a really nice touch and should give any applicant real peace of mind that your application will be dealt with in a professional, speedy, and friendly way.

Are there any late fees or prepayment penalties?

When taking out any loan you should check if the loan company you are considering going with has any late fees or prepayment penalties as these can add up over the length of the loan and work out to be quite expensive.

During my investigations into different loan companies, I was pleasantly surprised that LightStream does not have any late fees or prepayment penalties. They do however offer a refreshingly simple online loan process.

Philanthropy

LightStream has partnered with American Forests, an organization that has been protecting and restoring forests for more than 140 years, one tree at a time, one acre at a time, one forest at a time.

When you get your loan from LightStream they plant a tree and as we all know we need to take more care of our planet, so being that this company has partnered with American Forest shows me that they are a company with their sights firmly in the future looking out for our children and grandchildren which really appealed to me.

To apply for your motorcycle loan or anything else you may wish to finance you can just click on the link HERE which will direct you to LightStreams site. You will need to be a resident of the United States of America to be able to apply.


What’s The Difference Between A Secured And Unsecured Motorcycle Loan?

Unsecured Loans:

During my investigations, I found that an unsecured loan will consider your creditworthiness when the finance company looks at your application which means that you will not have to put your new motorcycle up as collateral. For the owner of the motorcycle, this means that the loan company cannot reprocess your motorcycle if you fail to keep up with your loan payments.

This type of load is more commonly offered by online lenders who will usually carry out a soft credit check which will allow you to view the amount, rate, and term of the loan you may qualify for. This type of soft credit check will not impact your credit score.

Secured Loan:

If the lender offers a secured loan, then that lender is taking on less risk because the amount of money borrowed by the applicant is secured on the motorcycle which is used as collateral. These types of loans are more common at banks and credit unions.

With a secured loan there may be an option for the applicant to make a down payment which reduces the loan amount and the interest which will be payable on the loan. In some cases, a down payment may be a requirement of the applicant being accepted for the loan.

Unsecured loans do not require down payments.


How Can You Compare Motorcycle Loans?

After my research, I found that the key features to compare motorcycle loans are:

  1. Lender Requirements
  2. Annual Percentage Rates (APR)
  3. Repayment Terms
  4. Extra Loan Features

Lender Requirements

Many finance companies will take into account your debt-to-income ratio and look at your credit score to determine whether they will be willing to lend money to you and at what rate that money will be lent (The APR). Many lenders these days will require a good to excellent credit score such as LightStream. There are other lenders however within the marketplace that will lend to bad-credit borrowers. Requirements on a loan that is secured may be less harsh than on a loan that is unsecured.

Annual Percentage Rates (APR)

Any loan will come with an APR or Annual Percentage Rate which is the interest rate on the loan plus any fees. The loan with the lowest APR is often the best to choose but you will need to read any small print which accompanied the loan to check that all fees and any other costs are included. You can also ask your loan officer who will give you all the information you require.

Repayment Terms

You will need to check how long your repayment term is over. A longer repayment term will mean that your payments will be smaller, but you may end up paying more for the loan in the long run. With a shorter repayment period, your monthly payments may be higher, but the overall cost of the loan will cost less.

Calculating how much you can afford before applying for a loan is always a good idea, and I explain how you can do this further down within this article.

Extra Loan Features

Some lenders offer same-day funding which means that the loan money will be available to you in your account the same day you apply. Other lenders may offer the ability for you to access your loan account on your mobile phone via an app which makes it a very convenient way to repay and keep track of your loan. Having these features is a bonus but you shouldn’t make your lending decision on the extra loan features. Having a low APR is usually the best way to go.


What Credit Score Do You Need To Get A Motorcycle Loan?

The minimum credit score requirements vary among different lenders but the higher your credit score is the more likely you will be approved for a lower interest rate loan (Low APR). Applicants with good to excellent credit scores (690 or higher FICO) will be able to access the lower rate loans.

I found that LightStream offers excellent low fixed-rate loans to applicants with good to excellent credit scores.

What Is NerdWallet’s Best Motorcycle Loan Of 2021?

NerdWallet’s ratings for personal loans award points to lenders which offer consumer-friendly features such as:

  1. Soft Credit Checks
  2. No Fees
  3. Transparency Of Loan Rates and Terms
  4. Flexible Payment Options
  5. Accessible Customer Service
  6. Reporting Of Payments to Credit Bureaus
  7. Financial Education

NerdWallet’s best motorcycle loan of 2021 was LightStream


How To Calculate A Sensible Budget For A Motorcycle Loan?

Many but not all Motorcycles cost less than a truck or car, however, they can still be a significant investment.

When I start shopping for a new motorcycle the first thing I do if I am thinking about financing my purchase is work out what I can afford to spend. I use the following steps to help me arrive at a sensible budget for my new motorcycle loan:

  1. Calculate all your cash assets
  2. Work out your total monthly income after taxes
  3. Subtract your expenses from your income
  4. Multiply this amount by your desired monthly loan length
  5. Use any cash assets as a down payment

Calculate all your cash assets:

Working out how much cash you have available to you should be the first step in working out a sensible budget for a motorcycle load. Some of this cash can be used as a down payment for your new motorcycle loan which will reduce the amount you will need to borrow and so reduce your monthly payments. However, you will want to keep some cash set aside for emergencies and other things so you shouldn’t spend it all on the down payment.

Work out your total monthly income after taxes

When working out your total monthly income you will need to deduct any taxes that are due. Make sure you include any extra income from a second job you may have or any investment which may pay you on a monthly basis.

Subtract your expenses from your income

You will now need to work out your total expenses each month including your rent or mortgage payments as well as other loans you may have, insurance costs (house, car, motorcycle, life insurance, etc), the gas you use for the car, food shopping and anything else you spend money on throughout the month. You don’t want to miss anything out.

Once you have worked out your total monthly expenses you can then subtract this amount from your total monthly income.

This will then give you the amount you are able to afford to put towards a loan for your new motorcycle, less of course for your new insurance cost for your new motorcycle and any maintenance costs).

Multiply this amount by your desired monthly loan length

Now you have worked out the amount of spare money you have each month you can multiply this by the number of months you will need to pay off the loan keeping in mind most financing options for motorcycles are between 36 and 60 months.

Use any cash assets as a down payment

Now assign the cash you have worked out to be spare to a down payment. I found that the larger your down payment the smaller and more manageable the loan will be and the less interest you will pay for the loan.


What Are The Additional Costs Of Owning A Motorcycle? How To Calculate Your Loan Amount

When deciding to apply for a loan for your new motorcycle you will have to consider that there are ongoing costs to owning a bike, so you will need to take these into consideration when making your purchase.

I have owned motorcycles for a long time and found that the additional costs to owning a motorcycle are:

  1. Insurance
  2. Maintenance
  3. Motorcycle Gear

Insurance

Many people assume that motorcycle insurance will be cheaper than a car or truck. This may be the case if you are an experienced rider with an excellent driving record, but this may not be the case all of the time.

There are a few different factors that need to be considered when you insure a motorcycle that goes beyond your driving record and the cost of the motorcycle itself.

There are certain types of motorcycles that have higher theft rates and so are more expensive to insure and there are other types of motorcycles such as sports bikes and customized motorcycles which may be seen by the insurer as having a higher risk profile and so the cost of the bikes insurance may also be much more expensive.

Shopping around for the best motorcycle insurance is obviously the best way to get the deal that is right for you, but you shouldn’t assume that it’s going to be cheap.

Maintenance

Motorcycles require much more maintenance than a car or a truck. I’m always carrying out some sort of maintenance on my bikes each month whether it is a new back tire, chain adjusting different areas of my bike.

Over time the cost of regular maintenance can add up so you will want to take this into consideration when purchasing your motorcycle.

For example, the cost of a new back motorcycle tire can be $300 -$500 and will need to be replaced every 3000 miles or so. Belts, chains, spark plugs, and other items may need to be replaced throughout the year, and the whole maintenance cost of the motorcycle may add up to be $1000-$1500 per year.

If you are going to take out a loan for your motorcycle you will want to take the maintenance cost into consideration when looking at the amount of money you will have available to service your loan payment.

Motorcycle Gear

If you do not already own a motorcycle you will need to purchase the correct gear to wear when riding your bike.

Motorcycle gear can be expensive, but a motorcycle helmet, gloves, jacket, and boots should be a must when riding a motorcycle. If you drop your bike or even have a small accident you will be glad you invested in some high-quality motorcycle gear to protect you.

A good motorcycle helmet can cost between $300-$800, you will then need a motorcycle jacket, pants, and boots so expect to pay about $1300-$1800 to kit yourself out.

If you’re taking out a loan for your motorcycle you may want to take out a personal loan to cover the cost of the bike and riding gear.

You could apply for a personal loan at LightStream who has excellent low fixed rates for applicants with a good credit rating. For more information can click HERE.


What Are The Different Financing Options?

Throughout my investigations, I found that there are different options available when it comes to deciding on a loan for a motorcycle. As with any loan, the interest rates you will pay and any terms will be decided by your credit history, the amount of down payment to choosing, and your personal assets.

So, what are the different financing options available?

  1. Dealer Financing
  2. Manufacturer Financing (OEM)
  3. Online Lenders
  4. Banks
  5. Personal Loans
  6. Credit Cards

Dealer Financing

There are plenty of motorcycle dealers who offer financing to customers who qualify. The interest rates offered through a dealership may be higher than an alternative lending source, so it is wise to investigate your options further before deciding to agree on a dealer’s loan.

Manufacturer Financing (OEM)

OEM (Original Equipment Manufacturers) Financing is where the manufacturer of the motorcycle such as Harley Davidson, Honda, Yamaha, etc offer direct financing on their new models.

This type of financing can be very beneficial if you are purchasing a new motorcycle with a special finance deal attached to it such as a 0% offer, however, in many cases, OEM financing can lead to higher interest rates and is mostly dependant on your current financial status and credit history.

Online Lenders

There is an expanding number of online lenders that specialize in motorcycle and other recreational vehicle financings as well as personal loans. The best one I have found when I was investigating this option is LightStream which offers low fixed rates for people with a good to excellent credit rating.

As well as offering excellent rates for loans, using an online lender means that you can set up your financing for your new motorcycle from the comfort of your home.

Online financing companies are extremely popular, and I have found that the majority of my friends and colleagues use an online lender due to the convenience and low rates which are available.

Banks

Motorcycle loans seem to be rarer than car or truck loans, but you are still able to find them if you carry out some research. You may find that many local banks are hesitant about underwriting a motorcycle, however, I found out that national banks and some credit unions do offer this facility.

Personal Loans

If your bank or credit union does not offer a loan facility specifically for motorcycles, you could qualify for a personal loan if you can support your application with your current financial status and personal assets. However, you will find that an online lender such as LightStream offers such a variety of loans for all different things, using this lending company may well be your best choice for a low fixed-rate loan.

Credit Cards

There are some benefits to purchasing a motorcycle on a credit card such as you will avoid credit checks, loan applications, and any penalties for repaying the loan early if this is your intention. However, the negative is that you may end up paying a far higher interest rate and larger monthly repayments.

You should really consider this option carefully if you were thinking of going down this route as the negatives may outweigh the benefits.


Top Ten Questions To Ask When Applying For A Loan

I can’t stress this point enough. When applying for any loan it is critical that you understand the agreement before signing any contracts.

Before you sign any agreement, make sure you asked the following questions:

  1. How long is the term?
  2. What is the interest rate of the loan and is the interest rate fixed or variable?
  3. Does the loan follow the rule of 78 or simple interest?
  4. Are there any penalties for early repayment?
  5. What are the penalties for late payments?
  6. What down payment is required to secure or qualify for the loan?
  7. Are you required to have full coverage insurance on the motorcycle while the loan is active?
  8. Are registration fees included in the loan?
  9. Are there any administrative fees associated with the loan? If so, what are they?
  10. How will the loan affect your credit score?

Asking these questions when applying for a motorcycle loan will help you avoid entering into any loan agreement you may come to regret at a later date.

Making sure you fully understand the terms and conditions of your loan as well as any specific responsibilities you may have will help with you servicing your loan on a monthly basis.

Don’t hesitate to ask questions if there is anything you are unsure about as the person who has been allocated as your loan officer is there to help you.

At LightStream you are able to get in touch with them Monday through Friday, 9:00 a.m. to 8:00 p.m. and Saturday, Noon to 4:00 p.m. Eastern time.


I really hope that after my investigations this article has really helped you out when deciding on a motorcycle loan.

Once you have been accepted for your loan and had your new motorcycle delivered, don’t forget to do one thing for me…

Get out there and ride!

Happy riding


Robert Blake

Hi, I'm Robert and I've been riding motorcycles for nearly 2 decades. The intention of this blog is to give reliable up to date information to other motorcyclists who are looking for answers about all different aspects of motorcycling. All the information is either from my personal experience or investigational work I have carried out myself. Happy Riding!

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