While motorbikes are cheaper than cars, the cost of riding gear, licence fees and insurance quickly adds up, so the last thing you want is an uncompetitive loan adding to your costs. Take a look at the guide below from Motorbike Loan Finder to find out what financing options you have available to help you get your new or used motorcycle.
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What is a motorcycle loan and how does it work?
Motorcycle loans are basically loans where the lender will allow you to use a motorbike as security; however, not every car loan lender will approve a motorbike as security for a loan. You may be able to get an unsecured loan in this case. Loan terms vary between one and seven years and you may be able to use some of the funds to purchase additional items with your bike, such as insurance.
How much do motorcycles cost?
Costs for a motorcycle vary. While the actual purchase price is generally cheaper than a car – even new motorbikes will usually set you back less than $10,000 – you still need to take into account insurance, riding gear, licence fees and other upfront costs you will need to pay. Some lenders may let you take out a loan that is more than the price of your motorbike to cover these costs, but other lenders may only let you borrow the cost of your vehicle. Check these terms before you apply.
Bike loan calculator: Find out how much you can borrow
How to choose your motorbike
When you're shopping around for your two wheels, it is important to keep these factors in mind.
Decide on a type of bike.
There are different bikes that you can consider buying. You could consider a Harley Davidson if you're after a cruiser, a sports bike if you're after speed or a touring motorbike for long-distance travel. You could also look at a dual-sport bike, a standard motorbike or a postie motorbike. You could even check out a scooter if you're after a cheaper option.
Is the engine capacity the right size?
Make sure you research the law around licence type and engine capacity. Depending on your state laws, you may have a bike you can't ride. For instance, in NSW, you'll need to check that the bike you want to buy is listed in the Approved Motorcycles for Novice Riders guide.
How does it ride?
As with buying a car, you should always consider taking the bike for a test ride. How does it handle? What is the acceleration like? These are the kinds of questions you should be thinking about.
What you should think about when comparing motorcycle loans
When comparing your loan options, remember to take the following features into consideration to see if the loan is right for you:
What is the loan amount you need? Check the minimum and maximum amount on offer when comparing your car loan options, and ensure you're able to borrow the amount you need.
What will you loan term be? For a fixed-rate loan, you can usually borrow money for between one and five years, while variable-rate loans usually have terms of between one and seven years.
Do you need secured or unsecured? A secured loan will use your motorcycle as a guarantee in case you default on your repayments, while an unsecured loan does not require any guarantee. If you need to borrow more than the cost of the vehicle or want flexibility with your repayments, you may want to opt for the unsecured loan option.
What interest rate will you be getting? The interest rate you will be paying on your loan will contribute significantly to the cost of the loan. This rate will be fixed or variable. A variable rate can fluctuate over the course of the loan while a fixed rate is set for the life of the loan.
What fees will you be charged? Lenders may charge a range of upfront and ongoing fees in order to set up the loan and cover the administrative costs of managing your loan account. Make sure to take these into account so you can get a sense for the actual cost of the loan.
Can I make extra repayments? One way to bring down the interest paid on your loan is to make extra repayments when you can afford it. If you feel like this may be of benefit to you, ensure your loan offers this before you apply.
Beyond Bank Low Rate Car Loan. The motorbike cannot be more than two years old.
Latitude personal loan. The motorbike cannot be more than ten years old.
Cashfirst secured car loan. The motorbike needs to be less than seven years old.
ANZ secured car loan. The motorbike needs to be less than seven years old.
IMB Secured Personal Loan. The motorbike needs to be less than six years old.
Things you probably want to avoid
Taking out a loan you can’t afford. Think about the actual cost of the loan, which includes all applicable fees and rates, before you apply. You then need to determine the cost of your repayments and the length of time you will need to budget for them.
Applying for loans that are restrictive. Some loans may place restrictions on the loan that can stop you from saving money or paying back your loan sooner. Check if you are able to make additional repayments or if you will be charged for paying back your loan sooner.
How you can apply for a new bike loan
Compare your motorcycle loan options using the comparison table on this page. Once you have found the right loan for you, click "Go to Site" to be directed to the lender’s website to fill out an application form.
The eligibility requirements for personal loans will differ between lenders, but generally you will need to be over the age of 18, a permanent Australian resident or citizen and have a good credit rating. If you are taking out a secured loan there will also be restrictions regarding whether the motorcycle you’re looking to purchase is eligible.
When you apply for a loan, you should have the following documents ready:
100 Points of ID, such as a passport or driver’s licence
Employment details, including your employer’s name and contact details plus copies of recent payslips
Financial details, including information about your assets, debts, income and liabilities
If you are self-employed, you will need to have supplementary financial documents
Registration details of the bike you intend to buy if you don't have pre-approval.
Jim works full time for a regional office and enjoys a short 15-minute bus trip to work every day. However, when he is promoted and starts working in the city, he doesn't like the one-hour commute on his bus. He owns a car but doesn't want to have to pay the hefty CBD parking fees. Jim decides he is going to get a second-hand motorbike for his commute.
He works out he can comfortably borrow up to $10,000 for his new purchase. He compares his loan options, including the rates, fees and terms. He wants to be able to make extra repayments and so opts for a variable rate loan. He receives online conditional approval for the $10,000 he needs and then starts his search online for his new wheels.
Have more questions?
Can I get a secured motorbike loan?
If you need a lower rate on your loan, you may want to consider securing the loan by using the bike as collateral. This means that if you default on your repayments, then the lender can repossess your bike to cover the costs.
I have bad credit, can I still get a loan?
This question never has a definitive answer as it depends on a wide range of factors. If you'd like to compare a range of unsecured bad credit loans that you could use to buy a motorbike, head on over to this guide to find out more.
While the offer of a 0% interest finance option may sound temping, it's important to always compare your options. You'll also have to consider balloon payments, monthly costs and other ongoing fees. Find out more information about 0% financing.
Matt Corke is the head of publishing in Australia for Finder. He previously worked as the publisher for credit cards, home loans, personal loans and credit scores. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time he has survived the dot-com crash and countless Google algorithm updates.
You'll receive a fixed or variable rate depending on the lender you are approved with Apply for up to $100,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
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