Compare motorcycle loans Australia

A personal loan for the purchase of a motorbike generally works in the same way as any other kind of personal loan. When approved, you will be required to pay off the balance of the loan, with interest, in a period of time agreed upon by you and your bank or lender, known as the term.

Your interest on a personal loan may be fixed, meaning it stays the same over the term of the loan, or variable, meaning it can fluctuate up or down, depending on market forces and the decisions of your lender.

Repayments can be made weekly, fortnightly or monthly, depending on your preference and the arrangement you have with your lender. Depending on the kind of loan you have, you may be able to make additional repayments, or pay off the balance early.

Refinancing is essentially a process of replacing an old loan with a new one. If you already have a motorcycle loan and are looking to refinance, or if you would like to know if this is an option for down the line, then yes, it is certainly possible to refinance a motorcycle loan.

There are a few reasons you might want to refinance a personal loan – it might be that you are consolidating all your debts into one, that you have found a loan with more favourable terms, that you wish to extend the term of your loan, or that your credit rating has improved, and you want access to better terms and interest rates.

It is important to be aware, though, that refinancing can come with costs. When you refinance a loan, you may be charged administration fees by your lender, and it’s likely there will also be fees and charges for setting up your new loan.

If you are on a fixed rate loan, then you may also be charged a ‘break fee’ by your lender, for exiting your current loan before the term is complete.

With all this in mind, if you plan on refinancing your motorcycle loan, then it is worth weighing up the costs of doing this alongside the potential savings benefit of the new loan, to determine if you will actually save money in the long term.

When you’re comparing loans for motorcycle finance, as with any kind of personal loan, some important considerations to keep in mind include:

Whether the loan is secured or unsecured

The interest rate on a secured loan may be lower than the interest charged on an unsecured one. It is worth noting that, to take out a secured loan, your lender must approve the item you are using as security. It may be the case that a lender is more readily willing to accept a new bike as security versus an older or second hand one, but this will depend on the individual lender.

Whether the interest repayments are fixed or variable

A fixed interest rate will remain the same for the whole term or the loan, whereas a variable rate can fluctuate up or down, depending on market forces and your lender’s decisions. While variable rates are vulnerable to rising, these kinds of loans can come with added features that you may find useful, such as the ability to make additional repayments on your loan.

The loan term

The ‘term’ of a loan refers to the amount of time you’ll have to pay it off. When comparing loans, it is worth keeping in mind that, even if the repayments on a longer loan term might seem lower, the additional interest charges you’ll pay could cancel out any saving you’ll make.

The fees and charges attached

When it comes to a personal loan for motorcycles, as with any kind of personal loan, you will need to factor in fees and charges to determine exactly how much you’ll be paying. Some lenders will charge upfront fees to set up an account, and some may charge ongoing administration fees, so it’s important to find out how much you’ll be charged. You can check the loan’s terms and conditions, and Target Market Determination (TMD), or ask the lender directly for more information.

Whether you can make additional repayments

As mentioned, some variable rate loans come with the ability to make additional repayments. This means that you could bring down the balance of your loan and potentially be charged less interest, and even pay off your loan more quickly, although the trade-off could be paying more in interest, if your lender decides to raise their rates.

Generally speaking, the process of applying for motorbike finance will be similar to the process of applying for any other kind of personal loan. The lender will need to confirm your identity, which will typically be done by providing 100 points of ID through documents such as your driver’s licence or passport.

Your lender will also want to get a picture of your financial situation, to assess your ability to repay the loan, and therefore you may be asked to provide such things as:

• Employment details, including copies of recent payslips
• A list of assets you own
• A list of your debts and liabilities
• A breakdown of your monthly expenses
• Details of the bike you intend to purchase

A lender may not ask for all of these details, but it is a good idea to have them on hand when you’re thinking about applying for a personal loan.

If you have your eye on a shiny new bike but are unsure whether it will be more financially sensible to buy it or lease it, there are a number of considerations to keep in mind.

Some pros of leasing a bike rather than buying might be lower upfront costs and the opportunity to trade up to a newer model (depending on the kind of lease you have). It is worth keeping in mind, though, that if you lease a bike, it will not be yours, and you will not be able to modify it. You will also likely have to continue making lease payments on it, whereas repayments end with a bike loan when you have paid it off.

Some pros of buying a bike might be the fact that you will own it, meaning it will count as one of your assets, and you will have no restrictions on the mileage you can drive, or on making modifications. Some potential downsides might be higher upfront costs, and the depreciation of your asset over time.

If you want to know more, Canstar has a breakdown of the pros and cons of buying versus leasing a vehicle.