Written by Crunch the numbers
How do motorbike loans work?
Motorbike loans are a pretty simple product, working in much the same way as a car loan. Here are the key points you’ll need to know:
- Loans are secured by your motorbike, meaning it’ll have to satisfy lender criteria related to age, condition and model
- Borrow from $5,001 up to 100% of its purchase price (depending on how much you’re eligible to borrow)
- Repay the loan over a term between one and seven years, with weekly, fortnightly or monthly repayments
- Make repayments with interest and fees (certain lenders may waive some or all fees) until your loan is repaid in full
- Pay as large a deposit on the purchase as you like, with some lenders also offering residual or balloon payments as an option
How do I compare motorbike loans?
There are plenty of ways to go about comparing your motorbike loan options before you sign your contract. Here’s what you should be looking out for:
- Interest rate: look for the lowest rate available for your situation. The lower your rate, the less you’ll pay overall.
- Fees: additional charges like establishment and ongoing fees can also appear, so look for lenders that charge less in the way of fees.
- Comparison rate: this combines your interest and non-conditional fees into a single rate, so it gives a more accurate indication of your loan’s cost.
- Available loan amounts: different lenders have different minimum and maximum loan amounts, so make sure you can borrow what you’re after.
- Available loan terms: similarly, not all lenders will offer the full range of one to seven years for terms. Look for those who can support your preferred term.
- Repayment flexibility: if you want the freedom to repay your loan ahead of schedule, some lenders may allow you to do this for free (most will charge fees, though).
- Eligibility criteria: of course, you’ll need to make sure you’re eligible for the loan you’re after. There’s no use applying for something you can’t be approved for.
- Bike eligibility: it isn’t just about you, though; your bike will have to meet criteria set by your lender, primarily related to its age and condition.
Fortunately, when you apply with Savvy, we’ll handle the heavy lifting for you when it comes to comparing your bike loan options. We’ll consider offers from our wide range of lending partners to help secure you the best deal available for your profile!
What types of motorbike can I finance?
Savvy can help you finance a wide range of different types of motorcycle, including the following:
- Adventure bikes
- Cruiser motorbikes
- Off-road motorbikes
- Quad bikes
- Scooters
- Sport motorbikes
- Touring motorbikes
Speak with one of our friendly consultants to discuss your finance options for your chosen bike to kick your application into gear!
What factors impact my borrowing power?
There are plenty of factors that can impact the amount you’re eligible to borrow, including the following:
- Your income and expenses
- Your job stability
- Your credit score
- Your record repaying similar loans in the past
- Your assets, including savings
- Your liabilities (other outstanding loans)
- Your dependants
What other costs will I have to budget for when buying a motorbike?
On top of the purchase price of the bike and your loan’s interest and fees, you’ll need to consider a variety of other costs, including:
- Comprehensive insurance
- Registration
- Stamp or motor vehicle duty
- Maintenance costs
- Fuel costs
Why compare leisure loans with Savvy?
Once you tell us about yourself and the loan you're after, we'll compare offers for you and prepare your formal application.
We're partnered with some Australia's leading lenders to bring you a range of competitive offers to compare in one place.
We're a Platinum Trusted Service Award winner with Feefo and our rating of 4.9 stars our of 5 shows our customers' satisfaction.
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Savvy is rated 4.9 for customer satisfaction by 620 customers.
How to reduce your motorbike loan interest rate
Maintain a strong credit score
Perhaps the most effective way to help you lock in a low rate is to have a good credit score. This is one of the biggest factors when it comes to determining approval and interest on your loan. Continuing to pay your debts on time and lowering your available credit limits can keep your score strong and continue to build it up.
Have a similar loan in your history
A good credit score is a strong indicator of your reliability as a borrower, but having a history of successfully repaying a similar loan in the past is just as valuable from a lender’s perspective. They’ll want to be as certain as possible that they can trust you with the responsibility, so pointing to a past loan could help your lender’s confidence in you.
Choose a new or near-new bike
While they may cost more to purchase, bikes that are brand-new or only one or two years old are more likely to be rewarded with low interest rates. Although the difference in rate may be small compared to an older used bike, when we’re talking about loans worth tens of thousands, even small discounts can be meaningful in the long run.
Have savings in the bank
Because repaying a loan requires financial discipline, lenders will look in all the areas they can to determine whether you can take on the responsibility. One of the factors they look at is the savings that you’ve built up in your account. Not only are they a valuable asset, they show that you’re responsible when it comes to your cash.
Be asset-backed
One of the most effective ways to net yourself a lower interest rate is by showing that you’re asset-backed. In most cases, this means you own a house, either outright or with a mortgage still under your belt. Lenders like borrowers who own property, so you can expect to pay less than someone with the same profile but no property ownership.
Compare your options with Savvy
Perhaps the simplest way to save on your loan is to compare as many options as you can. With our vast panel of reputable Australian lenders, we’ll run your application through our high-tech system to match you with the cheapest and best lender for your needs.
Motorbike loan eligibility and documentation
Frequently asked motorbike loan questions
If your bike is too old or not in good enough condition to act as collateral in the eyes of your lender, you may be able to go with an unsecured loan instead. This will allow you to buy any bike you wish, regardless of age or condition, and can often be processed and approved more quickly. However, these loans come with higher interest rates and fees and lower borrowing limits (no more than $75,000).
Yes – we can help you finance your bike regardless of whether it’s purchased from a dealership, private seller or auction house. As long as it meets their lending criteria, we can help you out!
Yes – we’re partnered with lenders who specialise in dealing with bad credit customers. Whether you have a few old defaults or have been discharged from bankruptcy, we’ll try to help you find a loan to suit your situation.
Getting your motorbike loan through your dealership may seem like the most convenient option, especially if they advertise 0% p.a. finance, but there are factors you should consider before you dive into your application. These include:
- Purchase prices and fees may be inflated to compensate for low or no interest
- Interest-free periods may only be for a short time
- You may be required to add a hefty balloon payment to your loan
- Not everyone will qualify for the lowest base rate anyway
Yes – we can help you get your motorbike loan pre-approved. This can give you an idea of your budget and indicative interest rate, as well as provide an upper hand in price negotiations with sellers.
You may be able to have your loan formally approved as soon as 24 hours after you apply and drive away within 48 hours. However, factors like the time of day and week you apply, the complexity of your profile, your lender’s processes and caseload and your bank’s transfer time can all impact the speed of approval and funding.
