Before You Ride, Plan Your Financing

Imagine yourself riding along Florida's scenic roads, feeling the warmth of the sun and the thrill of freedom that comes with owning a motorcycle. Before you hit the open road, though, you'll need to figure out how to pay for your bike.

Financing a motorcycle can seem overwhelming, but it doesn't have to be. This guide breaks the process down into five easy steps. Whether you're buying your first bike or adding another to your collection, you'll find out how to secure the right loan so you can ride with confidence.

Step 1: Determine Your Budget

Before you start shopping, figure out how much you can realistically afford. It's easy to get carried away by new features, but a clear budget helps keep your finances in check. Check your monthly income and bills first. Try to keep your total debt payments, including a new motorcycle loan, at or below 35% of your gross monthly income.

Don't forget to factor in all the costs of motorcycle ownership beyond the sticker price:

• Down Payment: Most lenders require a down payment, often around 10-20% of the motorcycle's purchase price. A larger down payment can lower your monthly payments and help you get better loan terms.
• Monthly Loan Payments: This is the biggest part of your budget. Use SCCU's online motorcycle loan calculator to estimate what your payment might be based on different loan amounts, interest rates, and term lengths.
• Insurance: While Florida law doesn't require motorcycle insurance, it does require all riders to show proof of financial responsibility, whether that be with liability insurance or filing for a Financial Responsibility Certificate through the Florida Department of Highway Safety and Motor Vehicles.
• Gear and Maintenance: You'll need a helmet, jacket, and other protective gear. Also, set aside funds for regular maintenance like oil changes, new tires, and unexpected repairs.

Step 2: Check Your Credit Score

Your credit score is a three-digit number that shows lenders how well you handle money. The higher your score, especially if it's 700 or above, the better your chances for low interest rates and good loan offers. Every year, you can get a free copy of your credit report once a year from the major bureaus at AnnualCreditReport.com. Look it over for mistakes that could be lowering your score.

If your score is lower than you'd like, don't worry. Here are a few tips to help improve it:

• Pay Bills on Time: This is the biggest factor. Paying your bills by the due date every month can build a strong history.
• Lower Your Balances: Try to keep your credit card balances low compared to your credit limit.
• Hold Off on New Accounts: Every time you apply for a new credit card or loan, your score might drop a little bit temporarily.

Step 3: Explore Your Loan Options

Now that you have a budget and know your credit score, it's time to find a lender that benefits you the most. You have a few different choices, and each has its pros and cons.

Banks and Credit Unions

A bank or credit union is a common choice for financing any vehicle. While both offer similar loan products and repayment terms, you'll often find that credit unions offer lower interest rates and fees than banks. Here at SCCU, we offer the kind of reliable, local service you can count on, so you feel confident during every step.

Have a look at our motorcycle interest rates to get an idea of what to expect when getting a loan. Please note that rates are based on approved credit.

Additionally, check out our easy-to-use motorcycle loan calculator to help you estimate your monthly payment, total interest, and total repayment amount for a loan.

Dealership Financing

Many motorcycle dealerships offer in-house financing as a convenient one-stop shop. While it can be fast and easy, the interest rates may not be as competitive as those from a credit union or bank. It's always smart to compare their offer with others. SCCU partners with many local motorcycle dealerships, so we encourage asking to finance your new bike with SCCU at the dealership to take advantage of the same great rates and service.

Manufacturer Financing

Sometimes the company that makes the motorcycle offers special financing deals. You might see ads for very low interest rates during sales events. These can be great, but they often require a very high credit score and are usually only available for a short time on specific models.

Step 4: Get Pre-Approved for Your Loan

Getting pre-approved for a loan before you start shopping is one of the smartest moves you can make. Pre-approval is a conditional commitment from a lender to give you a loan up to a certain amount. It shows sellers and dealerships that you're a serious, qualified buyer.

The pre-approval process is easier than you might think. It includes submitting a loan application with your financial information, followed by the lender reviewing your credit and income to determine what you qualify for.

Why is this so helpful?

1. Keeps you on budget: You know exactly how much you can spend, so you won't fall in love with a bike that costs too much.
2. Gives you negotiating power: When you walk into a dealership with financing already lined up, you're a "cash buyer" in their eyes. You can focus on negotiating the price of the bike, not the confusing monthly payment terms.
3. Saves time: Since the hard part of the financing is done, the final paperwork goes much faster.

Step 5: Finalize Your Loan and Ride Off

Before you sign anything, take a moment to review the loan agreement carefully. Double-check that the interest rate, loan amount, and term length match what you discussed. You should clearly understand when your first payment is due and how much it will be. If anything looks confusing, just ask. We're here to help you understand, not to rush you.

Once you sign the loan papers, the dealership will handle the title and registration work for you. Then, the best part happens: they hand you the keys.

Start Your Engine with SCCU

At Space Coast Credit Union, we're here to help you get on the road. If you're ready to take the next step, you can easily apply for a loan online or reach out to a Team Member for more information. Let's make your dream of owning a motorcycle a reality!

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