Can You Refinance A Motorcycle Loan?
Just because you can do something doesn’t mean that you should. Almost anyone with a motorcycle loan has the option to refinance at some point. A motorcycle loan is a personal loan, so the “refi” approach means taking out a second loan with better terms and using the proceeds to pay off the first loan. This article will cover the “why” and “how” of doing that.
Author:Dexter CookeReviewer:Darren McphersonMar 30, 202370.4K Shares978.1K Views
Just because you can do something doesn’t mean that you should. Almost anyone with a motorcycle loan has the option to refinance at some point. A motorcycle loanis a personal loan, so the “refi” approach means taking out a second loan with better terms and using the proceeds to pay off the first loan. This article will cover the “why” and “how” of doing that.
When should/could you refinance a motorcycle loan?
When considering refinancing a motorcycle loan, a factor to remember is that bikes depreciate quickly. Larger bikes can go 50,000 miles if they get regular maintenance, but sport bikes begin deteriorating after 20,000 miles. The average motorcycle loan is 36 to 60 months. Do the math. Will you still be paying for the bike long after you stop riding it?
This is where the debate between “could” and “should” becomes relevant. Taking out a second loan will make it more difficult to sell the bike if you want to do that. Keeping it too long could make it worthless as a trade-in. A better option might be to use your current motorcycle as a down payment and finance a brand-new one.
Refinancing could be a great option if your motorcycle is in good shape, and you want to keep it for the foreseeable future. At that point, you need to consider whether to impact your credit score and credit history because both will be affected by a decision to refinance.
How to apply for motorcycle refinancing
The original loan you got to buy your motorcycle may be a standard unsecured personal loan or could be a secured motorcycle loan which is similar to an auto loan. Larger dealerships often have financing departments that can help you buy a more expensive motorcycle. Less expensive and used bikes are typically purchased with personal loans or cash.
Refinancing is different. Lenders don’t offer secured loans on motorcycles that are already depreciating, so you’ll need a personal loan to pay off the original loan. You can find personal loans through a bank, credit union, or online lender. To apply, you’ll need the following:
- Valid driver’s license or other state-issued identification document
- Proof of employment and income
- Bank routing and account numbers
You don’t need a copy of your credit report, but it doesn’t hurt to get one. While you’re at it, check your credit score. The lender will review both. Know what’s on the report before the potential lender reviews it because they may have questions about some of the items it contains.
The Bottom Line
As we stated earlier, this really isn’t a question of whether you can get refinancing – it's if you should. If you choose this route, you’ll likely find lenders that will work with you. Gather the necessary documents, do your homework on lenders, and compare rates and terms. You might also want to check the book value on your bike to see if refinancing makes sense.
Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of [publisher] or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.
Dexter Cooke
Author
Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations.
As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all.
Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
Darren Mcpherson
Reviewer
Darren Mcpherson brings over 9 years of experience in politics, business, investing, and banking to his writing. He holds degrees in Economics from Harvard University and Political Science from Stanford University, with certifications in Financial Management.
Renowned for his insightful analyses and strategic awareness, Darren has contributed to reputable publications and served in advisory roles for influential entities.
Outside the boardroom, Darren enjoys playing chess, collecting rare books, attending technology conferences, and mentoring young professionals.
His dedication to excellence and understanding of global finance and governance make him a trusted and authoritative voice in his field.
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