Credit score and motorcycle loan interest rates
Applying thinking of applying for a motorcycle loan and want to know what interest rate you’ll get with your credit score? Lenders look at many factors when deciding on approval and your motorcycle loan interest rate, and one of the most important is your credit score.
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How your credit score and motorcycle loan interest rates work
Your motorcycle loan interest rate is calculated based on your credit score, which reflects your ability to make repayments as a trustworthy borrower.
A higher credit rating just makes it easier to get lower motorcycle loan interest rates - so there’s very little reason not to consider understanding and improving your credit score before applying.
Lower credit scores don’t necessarily mean you will only be approved for motorcycle loans with high interest rates, it just means that you’ll be required to provide more supporting information if you want to access a better deal from a lender or you will have to deal with a lender that specialises in bad credit personal loans.
What motorcycle loan interest rate will your credit score get you?
If you are only taking your credit score into account when applying for a motorcycle loan:
- Excellent credit scores provide access to the lowest rates on offer.
- Average credit scores may result in a motorcycle loan interest rate up to 5 per cent higher.
- Low credit scores almost always result in very high interest rates.
It’s also important to understand that interest rates aren’t the only indicator of a good deal on motorcycle finance, and that motorcycle loan interest rates are determined by a number of factors, not just your credit score:
- Your personal credit history
- The amount you wish to borrow
- The length of the loan period
- The value of any collateral - if any - used on the loan
Important: A brand-new motorcycle purchased from a franchise or dealership - i.e. not a private sale - will often get you the lowest interest rates on a motorcycle loan.
If you’re more interested in saving money than just getting a good deal, it’s important to consider the length (term) of your loan. The sooner you repay your loan amount, the greater the amount of total interest you will save.
How to get a better credit score and better motorcycle loan interest rates
If you’re wanting to get a better motorcycle loan interest rate by improving your credit score, you have two main options to consider.
- First, you can hold off on making your motorcycle loan application while you take steps to improve your credit score, pay off any defaults or outstanding debts, correct any errors on your credit report, and wait for any negative events to be cleared from your report over time.
- The second option is to apply for the motorcycle loan at the higher interest rate, and then refinance your motorcycle loan further down the line once you’ve made consistent repayments and improved your credit score to a higher rating level.
Only you will be able to decide which option is more suitable for your situation.
How can you check your score?
You can check your credit score for free and without any impact on your credit score with Money Matchmaker®.
You'll need to create an account with these details:
- Full legal name
- Driver Licence number
- Residential address
- Date of birth
Your score won't be negatively affected and we protect your data with encryptions.
Written by
Loans Expert
Shaun McGowan
Reviewed by
Editor
Sean Callery
