5 Motorcycle Loans in 2021: Compare Options

Unsecured vs. secured motorcycle loans

Unsecured loans take into account your creditworthiness rather than requiring you to pledge the bike as collateral. This means the lender can’t take your motorcycle if you fail to make payments. These loans are more commonly offered by online lenders, which usually let you pre-qualify for a loan to see the amount, rate and term you may qualify for without impacting your credit score.

Secured loans tend to have lower interest rates because the lender takes on less risk by having your motorcycle as collateral. You’ll find secured loans more often at banks and credit unions; some large banks offer unsecured loans for motorcycle financing.

Secured loans may require — or have an optional — down payment. A down payment reduces the loan amount and the interest you’ll pay on the loan. Unsecured loans don’t require down payments.

» MORE: Compare the best unsecured personal loans

Motorcycle manufacturer financing

Some motorcycle manufacturers offer financing at lower rates than rates on unsecured or secured motorcycle loans. Harley Davidson, for example, offers financing options for its bikes at local dealers. According to the company, rates start at 3.99% over seven years for new motorcycles.

How to compare motorcycle loans

Here are the key features to compare between motorcycle loans.

• Lender requirements: Most lenders look at your credit score and debt-to-income ratio to determine whether to lend to you and at what rate. Some lenders require good or excellent credit, while others will lend to bad-credit borrowers. Requirements on a secured loan may be softer than on an unsecured loan.

• Annual percentage rates: A loan’s APR is its interest rate plus any fees, like an origination fee. APRs on most unsecured personal loans fall between 6% and 36%; starting rates on secured motorcycle loans may be lower. The loan with the lowest rate is often the best choice.

• Repayment terms: Most unsecured loans have repayment terms between two and seven years, but some lenders have more limited options. Upstart loans have three- or five-year repayment terms, for example. A longer repayment term means you’ll have lower monthly payments; a shorter one means you’ll pay less in overall interest. Use a personal loan calculator to estimate your rate and monthly payment based on your credit score.

• Other loan features: If you have multiple loan offers at affordable rates, a loan's unique features can help break the tie. Some lenders offer next-day funding, access to your credit score or a mobile app to manage your loan. These features shouldn’t trump the offer with the lowest rate, but they can help make the process of getting and repaying your loan more convenient.

Motorcycle loan frequently asked questions

Where can I get a motorcycle loan?

Motorcycle loans are offered through some motorcycle manufacturers, banks, credit unions and online lenders. Compare offers from multiple lenders to find the lowest rate.

How do I get a motorcycle loan?

Getting a motorcycle loan starts with comparing multiple loan offers. You'll then submit an application, typically with documentation like W-2s and pay stubs. The application will trigger a hard credit pull. Once approved, you'll typically receive the loan within one to five business days.

What credit score do you need to get a motorcycle loan?

Minimum credit score requirements vary among lenders, but the higher your credit score, the more likely you'll be approved for a low interest rate. Borrowers with good to excellent credit scores (690 or higher FICO) receive the lowest rates, though some lenders offer bad-credit loans.

What are repayment terms on motorcycle loans?

Motorcycle loans typically have repayment terms between one and seven years. A longer term means lower monthly payments, but more interest.

What are motorcycle loan rates?

Rates on personal loans from online lenders range from 6% to 36%, while unsecured bank loans can have rates between 7% and 25%. Federal credit unions cap interest rates at 18%.

You can see what rate you qualify for on an unsecured personal loan by pre-qualifying. Doing so with NerdWallet lets you see potential rates and terms from multiple online lenders and doesn’t affect your credit score.