How Long Are Motorcycle Loans?
Summary
Wondering how long a motorcycle loan is? Learn typical term lengths, what affects them, and how to choose the right term for your motorcycle loan.
In this article:
If you’re thinking about buying a motorcycle, you may be considering a loan but wondering how long it takes to pay off. Motorcycle loans typically range from two to five years. The right loan term may depend on your financial situation, budget, the size of the loan and the lender’s requirements.
Learning more about typical motorcycle loan terms may help you compare financing options and plan for repayment before you hit the road.
How do motorcycle loans work?
You generally have two options if you’re looking to finance a motorcycle: You can get a personal loan and use the proceeds to purchase a motorcycle, or you can get a loan through a motorcycle dealership.
With a personal loan, you receive a lump sum of money from a lender, bank or credit union that you repay in fixed monthly payments (including interest) over a set period of time. A personal loan generally has a fixed interest rate, meaning your payments stay the same until the loan is paid in full, as long as you pay on time. You can also use a personal loan to pay for expenses like gear, repairs and maintenance.
A personal loan may be secured or unsecured. A secured loan is backed by collateral (something of value you possess that you use to back the loan). With a secured loan, you may qualify for a larger loan amount or a lower interest rate than you would with an unsecured loan, which doesn’t require collateral. However, if you don’t repay a secured loan as agreed, the lender can take your collateral to recover the amount owed.
When you finance a motorcycle through a dealership, the process is similar to taking out an auto loan. The motorcycle acts as collateral, and the dealership will arrange financing through a lending partner. The interest rate on a loan through a dealership may be higher than a loan you get directly from a lender.1
How long is a typical motorcycle loan?
While many motorcycle loans have terms between two and five years, the exact duration varies by lender. For example, some lenders may offer terms up to seven years.
A shorter loan term could mean you make higher monthly payments but pay less interest overall. With a longer term, your monthly payments may be lower, but you could pay more in total interest.
What factors can affect your motorcycle loan term length?
There are a number of factors that may influence the length of the term for the loan you choose.
- Your purchase price and borrowing amount: How much your motorcycle costs can affect your loan term. If you take out a larger loan for a more expensive bike, you may need a longer repayment period to keep your monthly payments affordable. A smaller loan amount may be easier to pay off in a shorter amount of time.
- Your down payment: A down payment is a percentage of the purchase price you pay upfront when buying a motorcycle, vehicle or home. The size of the down payment reduces the amount you need to borrow. The bigger the down payment, the smaller the loan, which can make payments on your loan easier to manage.
- Your credit history, credit score and income: Lenders use your credit history, credit score and income to determine your loan eligibility and loan terms. Stronger credit and higher income could mean you qualify for a longer loan term (and possibly a lower interest rate).
- Your lender’s policies: Loan terms may differ across lenders, banks and credit unions. Lenders set their own minimum and maximum term lengths. Look for a lender who offers term lengths that fit your needs.
How much does a motorcycle loan cost?
The cost of a motorcycle loan depends on factors such as the price of the bike, whether it’s new or used, the interest rate for the loan and the length of the loan term. As you think about how much you want to borrow, you should also consider factoring in additional costs such as bike maintenance, insurance and fuel.
Here’s an example of how much a $10,000 motorcycle loan would cost for loans with the same interest rate but different lengths.
| Loan term | 36 months | 60 months |
|---|---|---|
| Loan amount | $10,000 | $10,000 |
| Interest rate | 24.99% | 24.99% |
| Estimated monthly payment | $398 | $293 |
| Total interest paid | $4,312 | $7,607 |
| Total loan cost | $14,312 | $17,607 |
Source: Experian.2 These are estimates. Your rates and terms may be different. Payment amounts may differ depending on how the lender calculates interest and whether fees are included.
How do I choose the right term length for a motorcycle loan?
The right motorcycle loan should come with a payment amount that fits your monthly budget. First, consider what loan amount and interest rate you may be comfortable taking on. Then, compare monthly payments across different term lengths. If you’d like to see how the loan term affects monthly payments, a personal loan calculator may be a helpful tool.
If lower monthly payments are worth the trade-off of paying more in interest overall, you may look for a longer term. If you have room in your current budget and want to minimize the cost of the loan, a shorter term may be better for you. If you want to lower both your monthly payments and total interest, you could consider making a larger down payment to reduce how much you need to borrow.
Ride with a loan term that fits your needs
If you’re weighing your motorcycle loan options, consider checking for prequalified offers. Prequalifying gives you an idea of the kind of loan you might receive before you formally apply. Checking for prequalified offers usually takes just a few minutes, and it won’t affect your credit score. With a little research, you can find the right personal loan to get your wheels moving.
Sources
This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.
