It is a very simple reality that when you have a very bad credit rating or you’re in bankruptcy the banks are going to charge you a large interest rate. Particularly for motorcycle loans if you are looking at long-term loan of five to six years your just raise going to be about 11%, and it goes up depending on how bad your FICO score is. If your FICO score is in the low six hundreds you’re going to be looking at an interest rate as high as 15 to 17% depending on the go through for your financing. I will assume that you really have to get a motorcycle for the purposes of getting to work. This is a really good reason for getting a loan in the first-place, but if you are intending to buy a motorcycle for pleasure purposes only and you have a miserable credit rating I would think long and hard about getting yourself into any more debt. Especially now with the new fledgling economy in the United States and around the world.

A perfect example of a smart loan would be a motorcycle loan if you intend to get rid of a truck or car the cost you more for fuel, insurance, repairs, etc. If you plan to sell your vehicle (car or truck) and pocket the money then good for you, you’re beginning to use your head. Still you need transportation so motorcycle is the perfect option if you want to save money on fuel, insurance, repairs, and perhaps even storage. Maybe you’re getting out of having to pay a car lease payment as well in your monthly payments on a motorcycle loan will be far less. Once again, you are using your head.

There are several options what looking for your motorcycle financing, and I would like to go into a few right now. First off, you have the option of going online to research possible motorcycle loans, the interest rates incurred, and your eligibility for approval. Banks tend to be very conservative when it comes to lending money so you may be forced to go online. Your local bank will probably want some kind of collateral such as liquid assets, home equity, you’re perhaps a cosigner. They really don’t care what their security is on your loan as long as they can cover their ass (to put it bluntly).

Even if you tell the loan officer of your brilliant plan to cut down expenses during the rough times of the New World economy, and how you intend to save money on monthly payments, gasoline bills, and insurance premiums, they are not going to be very impressed with your credit rating as it currently is. I know there are many web sites out there in cyberspace to tell you you can get a motorcycle loan when you have really bad credit. Yes, there are plenty of web sites that tell you you can get a motorcycle loan approved while you are still in the middle a bankruptcy, but in general these writers are not truly “underwriters”. If you are really serious about getting approved for motorcycle loan while you are still in bankruptcy you ought to be talking to a cosigner. I know the getting a cosigner is a humiliating experience (especially if you’re a grown man or the age of 30) but the old saying goes, “pride goes before a fall.” Something like that anyway.

When you are in bankruptcy usually for about seven years your odds of getting approved for a loan with a reasonable interest rates are zero. Even with a cosigner you’re still going to have to pay exorbitant amounts of interest. I suppose why I am talking about motorcycle loans and bankruptcy today is because a friend of mine recently got a loan for a motorcycle and he had really poor credit. He was not in bankruptcy even in his interest rates very high and he still had to have a cosigner on the loan. The interest rate he finally ended up having to pay was 12.5% over a six-year term. He bought a brand new Honda (I have no idea what kind of Honda motorcycle) with a sticker price of over $40,000. He was a such a rush to get on his new motorcycle he did not take the time to look closely at how much interest you have to pay over the six-year term of his loan. So of course I had to be the guy who rains on this parade and calculated the math.

Below are the results of my simple calculation on his motorcycle loan. As you can see he is paying an extra $15,205.48, and his monthly payment (he is only paying once a month which is the worst thing you can do when you’re trying to bring the principal balance fast as possible) is $756.24, and this does not include a much insurance he has the pay on a monthly basis. 750 bucks is a lot of money to pay every month and I don’t care what it is you bought.

Motorcycle Loan Calculation Results
Total Amount to be payed: 55205.48
Total amount of interest 15205.48
Payments: 756.24

The bad news in this story is the my friends car payments before he bought his new motorcycle were only $350 a month. On top of all of this he kept his car so he banged up his monthly responsibilities to over $1000. He is enjoying his new Honda motorcycle but when the fluff flies away, the dust has settled, and reality sinks in, he is going to be sorry.

There is no moral so this story whatsoever, and I’m not telling my friend or anybody on this planet whether they should or should not be getting a loan for motorcycle or for anything. I just telling the story the way it is and you can make your mind up whether or not my friend is on his way to further delinquency. Have a great Christmas and a happy new year and keep your money in your pocket and don’t be a fool.