As a motorcycle enthusiast, you’re probably dreaming of a specific make and model that you want to buy and own. Yet, your salary can’t cut it and saving up just doesn’t seem to work the way you would like it to work. Something unexpected always pops up and you find yourself unable to save even a fraction of the money you need to buy that dream motorcycle. Have you, though, considered a different financing option yet? Learn more on how you can finance it.
Do you have any idea as to which financing option I’m referring to? Well, if not, let me put it this way. If you were buying a car, you could get a car loan, so how come a motorcycle loan isn’t crossing your mind already? You might have thought that this option doesn’t really exist, which is why you haven’t thought about it too much previously. Yet, since it’s clear that saving up is pretty much impossible, I say it’s time to consider that other option, i.e. the option of borrowing money to buy your two wheeler, because it definitely does exist.
When I mention borrowing money to buy a two wheeler, though, I’m not thinking of borrowing from the people you know and hoping that they won’t hold a grudge if you take your time to repay the money. Sure, if you have wealthy friends ready to give up a portion of their money to help you achieve this dream of buying a particular motorcycle, then by all means go for it. But, be absolutely sure that they won’t hold this against you in the future. If life has taught us anything, however, then it’s that mixing money and friendships usually doesn’t work out for the best, so it would be better to refrain from borrowing from the people you know and love.
Fortunately for you, there’s an option that doesn’t involve holding grudges. Basically, it consists of you borrowing money from a bank and agreeing to repay it in a specific period of time and at a certain interest rate. Just like there’s a car loan, there’s such a thing known as a motorcycle loan. It’s time for you to get better acquainted with this option now, as well as understand how it can differ from a general consumer loan, so as to decide later on which option you should actually use and how to get the one you want. So, let’s talk.
What Is An MC Lån?
A motorcycle loan, also known as an MC lån, is practically the loan that people get when they want to use the money to buy, well, a motorcycle. This is a pretty obvious thing, but that’s not all you have to know about this option. If you decide to go for it, you’ll be limited not only in the amount you can borrow, but also in the actual purpose you can use the money for, which should be logical already. Basically, you can use the money only for your two wheeler, whereas some other options allow for more freedom regarding the usage of the money. We’ll address that later, though.
Moving on, the bank that will offer you this loan type will actually use your motorcycle as collateral, i.e. as security that you’ll repay the money, meaning that you’ll essentially have a mortgage on your ride. If you don’t manage to repay everything on time, the bank will have the full right to confiscate the motorcycle from you. So, it is essentially not completely yours until you have repaid the MC lån in full. This is how all secured loans work, and I am guessing that you’re not surprised.
There is an upside to the fact that the MC lån is secured, though. Secured loans usually come with lower interest rates, because the lenders have already protected their own interests with collateral. So, this can be a great option for all of those individuals who are looking to get lower interest rates and thus more favorable lending terms overall. Interest rates influence the actual price of your loan, so the higher it is, the more expensive it will be, which is precisely why everyone prefers lower ones.
Your options, as well as your borrowing terms, will also depend on who you’re buying the motorcycle from. If buying from an individual, i.e. a private person, you’ll need to apply for the loan directly through a bank, and you’ll receive the money personally. If, however, you’re buying from a dealer, you can apply for your MC lån through that dealer, in which case you may get more favorable borrowing terms. So, this is something to consider as well, especially if you’re not sure where to buy your two wheeler just yet.
How Is It Different From A Consumer Loan?
The MC lån is different from a consumer loan, although in your case, the purpose of using them would be the same. Speaking of those purposes, that’s the first difference to take note of. When you apply for a consumer loan, you’ll essentially be getting money into your account and you’ll be free to use it anyway you want, with no limitations at all. Thus, the amounts you can borrow are usually higher this way as well. This is the traditional loan type that everyone is used to by now, so I suppose there’s no need for me to dwell on explaining it further.
If you do need further explanations, here you go: https://www.cnbc.com/select/what-is-a-personal-loan/
Now, while we are all used to hearing about those personal loans and while most of us know how they work, some of you could still be confused about something specific. Doesn’t the MC lån sound just the same as the personal loan? Well, apart from the difference I’ve explained above, there are two more crucial ones to consider. First things first, personal loans are often unsecured, which practically means that you won’t risk losing your motorcycle by providing it as collateral to the lender.
Secondly, it’s already clear from the above that the interest rates are conditioned, among other things, by the collateral, or the lack thereof. So, since these types of loans won’t require any kind of collateral, it’s only logical that you can expect them to be a bit more expensive. They’re known as unsecured ones, and finding one with an interest rate lower than 10% is very uncommon, if not impossible. You get the peace of mind by not offering collateral, but you pay more for that peace of mind by agreeing to higher interest rates. If that’s a price you’re ready to pay, then feel free to do it.
Which Option To Get?
The clarifications as to what consumer loans and what MC loans are must have led you to this important question. Which option should you get when you’re looking to finance your motorcycle? This question is not that easily answered, though, since there are benefits, as well as drawbacks, to both of those options. One offers lower interest rates, while the other requires no collateral. So, for starters, you need to decide what’s more important for you between those two things.
You shouldn’t make that decision based on just a feeling, though. It’s imperative for you to get the best option, and your current financial situation will be the answer to what it is that’s actually best for you. If you can’t afford higher rates, going for the MC lån is better, and so it is if you don’t have a very good credit score. Why? Well, because the credit score will actually affect those rates even more, and a poor one will have you struggling to get good rates even on the secured option, and let alone on the unsecured one.
On the other hand, if you have a great credit score, there’s a good chance that you’ll qualify for great interest rates on the unsecured consumer loan as well. There could be no need for you to go for the secured one and thus offer your motorcycle as collateral if you can get such great rates without providing such security to the lender. So, as it’s clear, the choice you’ll make will depend on your financial situation, your credit score and your preference as well. Make sure to take carefully assess both of the options while keeping your situation in mind, and then be the judge of which one would be best for you.
How To Get It?
Whichever option you choose to go for, you’ll have to take some similar steps in order to actually get the money for your motorcycle. For starters, it would be good to work on that credit score before applying for any of these, as it’s clear that it will have an impact on your interest rates. Then, you’ll have to find the perfect lender, which might not be easy, as there are numerous ones out there, but not all of them will offer such favorable borrowing terms. You should research various ones before choosing and always go for the lender that’s reputable and known for protecting their clients’ interests, as well as their own. And, of course, remember, if you opt for the MC lån, you can apply through the dealer.
The hard work is done, and now you simply have to apply. Complete the application steps and provide the lenders with the necessary documentation so as to allow them to review your application and consequently approve it. You’ll wait for a while to be approved, and then you’ll get the money and finally get that motorcycle you’ve been dreaming of.
