Although motorbikes are often less expensive than cars, you might still need a motorcycle loan to buy or upgrade them when you don’t have enough budget. Alternatively, you might be able to buy a motorcycle outright but decide to take out a loan to improve your credit instead, especially if the bank offers low-interest rates.
However, you need to find out more about a motorcycle loan before deciding to get one. This post will help you with much useful knowledge to have an overall look at this loan type.
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What Is A Motorcycle Loan?
Motorcycle loans can be personal or specialty loans used to buy a motorcycle or an ATV. Similar to a car loan, the lender lends funds for a motorcycle loan, which you then pay back in interest-bearing monthly installments.
Compared to loans for trucks, cars, or other vehicles, motorbike ones often have lesser loan amounts.
There are various options for a motorcycle loan to help you buy your ideal motorcycle.
- Online lenders: Since these lenders don’t need to worry about brick-and-mortar costs, you might find more affordable rates and a quicker application process.
- Banks: This is one of the most trustworthy options. Particularly if you already have an account set up in a specific bank, you might want to work with a banking organization you are accustomed to.
- Credit unions: Interest rates at credit unions are typically lower than those at conventional brick-and-mortar banks.
- Dealerships: You can apply for loans from the dealership if you’re buying a bike there. Before you decide to get a loan from a dealership, make careful to examine their terms.
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Top 4 Best Motorcycle Loan
Robinsons Bank
In terms of asset and capitalization size, Robinsons Bank, the financial services division of the JG Summit Group of Companies, is one of the fastest-growing commercial banks in the Philippines. JG Summit Capital Services Corp. owns 60.0% of the bank.
The age range for applicants at Robinsons Bank must be between 21 to 65. Depending on the motorcycle model, the down payment ranges from 9 – 30%. The aspect above will also affect the loanable amount.
On the other hand, the loan periods might range from 6 to 36 months. The interest rate can alter. The selling price and down payment will determine it.
Bank of the Philippine Islands (BPI)
Bank of the Philippine Islands (BPI) is a Philippines universal bank. It is the first bank in Southeast Asia and the Philippines. Moreover, it is one of the most successful banks in the Philippines and ranks second in market capitalization and assets, making it the fourth-largest bank overall.
Big bike loans are available from BPI. They accept borrowers between the ages of 21 and 70. Term length and the type of motorcycle will determine the down payment. The bank will lend anything between PHP 200,000 to 70% of the motorbike’s price.
One to three years are the possible loan terms. Depending on the length, interest rates might range from 8.83% to 27.84%.
Security Bank
In the Philippines, Security Bank Corporation is one of the reliable universal banks. It was the first privately owned bank in the post-World War II era and opened on June 18, 1951, under the name Security Bank and Trust Company. In 1995, Security Bank became a publicly traded company on the Philippine Stock Exchange.
At the Asian Banking and Finance’s Wholesale and Retail Banking Awards, the Security Bank was recognized as one of the typical examples of the bank’s superior loans and offerings.
About their basic terms, you must be 21 to 65 years old to qualify for a Security Bank motorbike loan. A minimum of 30% of the unit’s price should be put down. They may lend up to 70% of the total purchase price.
Moreover, you can have a maximum of 36 months for the terms. Depending on the length of the period, they demand interest rates ranging from 8% to 26.05%.
City Savings Bank
City Savings Bank was formed in Cebu City in 1965 and is a thrift bank subsidiary of Union Bank of the Philippines. It is also a part of the Aboitiz Group of Companies. Its operating efficiency, non-performing loan ratio, and capitalization levels are among the highest in thrift banking.
Again, City Savings Bank only accepts customers aged 21 to 65. The bank requires between 5% and 10% as a minimum amount for the down payment. Thus, the selling price will determine this. They also offer loans between PHP 20,000 and PHP 300,000.
Upon acceptance, City Savings Banks will go through the loan’s conditions, rates of interest, and required down payment.
Tips For Getting A Motorcycle Loan
Review The Credits
Your creditworthiness may have an impact on the conditions you are eligible for, such as monthly payments and interest rates.
Check your credit ratings if you’re considering applying for a motorcycle loan to see if there’s a chance to raise them and potentially receive a lower interest rate.
Comparison
Comparing prices while you shop allows you to select a motorcycle with both the lowest retail price and the best loan terms.
It might not seem like much of a difference between interest rates of 5% and 6%. Yet, getting a 5% interest rate instead of a 6% one may result in hundreds of dollars in interest savings throughout a $20,000 loan’s 48-month repayment period.
You might search and compare some other factors below to decide on the best loan:
- Total borrowing dollar amount.
- Monthly payment.
- The rate of interest.
- Total financing costs.
- Additional charges, such as a penalty for early or late payments.
- Check the annual percentage rate (APR).
Conclusion
Getting a motorcycle loan will help you purchase your ideal bike. This article has provided all the necessary information about this loan type.
Many banks and financial services can offer it, but you should do research and compare them to choose the best one with a suitable interest rate.
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