It’s much more convenient to have your own vehicle than to commute everywhere using public and private transportation services. Getting a motorcycle would make traveling around town so much easier.
In Singapore, a new motorcycle’s retail cost ranges from $5000-$10,000 on average, while a car costs significantly more at $106,000. The more practical choice for a vehicle would thus be a motorcycle. And if you are open to buying a second-hand motorcycle, you can expect the motorbike’s price to be halved.
But the problem is that most people don’t have the cash readily available to buy a new vehicle upfront, even for a motorcycle. The best solution would be to acquire a bike loan or some motorcycle financing.
This guide will show you how to get motorcycle loans in Singapore.
What Is a Motorcycle Loan?
A motorcycle loan is when a lender grants a certain sum of money to another party to aid him in paying for his motorbike. The borrower would then pay the obligation in fixed instalments throughout a certain period depending on the loan terms.
Varying from one lender to another, the period of payment for a motorcycle loan typically lasts from 36 to 60 months. You can use a loan calculator to compute how long you would have to make loan payments. But, the amount provided in the loan calculator is only an estimate.
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Where Can You Get a Motorcycle Loan?
In-house financing from the dealership
When you go to a dealership to buy a motorbike, chances are they will offer you their in-house financing options and tempt you with their competitive interest rates. Motorcycle dealers use this strategy to make it easier for customers to buy their motorcycles.
It’s much more convenient for borrowers to get motorcycle financing directly from where they purchase the motorbike because the application process is much faster. Search for other lenders with the best prices first before committing.
Typically, a buyer pays an average minimum down payment of 15% for a new bike and borrows the remaining amount from a dealership’s in-house financing at an interest of 5% per annum. For a secondhand motorcycle, the in-house financing interest rates will likely be about 2% to 3% higher per annum.
The maximum loan tenure typically lasts about four (4) years, depending on the terms of your loan contract.
Motorcycle manufacturer
Manufacturer financing is available from some motorcycle companies, such as Harley-Davidson, BMW, Kawasaki.
Unlike motorbike dealers, motorcycle manufacturers earn mainly from motorbike sales and not on interest on loans. Hence, they will most probably offer lower interest rates.
It might be more beneficial for borrowers to go directly to the manufacturers and take advantage of their rates. Some lenders’ financing options don’t even require a down-payment.
One downside is that only a few manufacturers have their own financing firm that offers their customers loan options.
Motorcycle refinancing from a bank, credit union, or money lender
If your credit rating has improved since you got your motorcycle financing, you can try refinancing your loan. With a high credit score, borrowers might be eligible to get a new loan from other banks, financial institutions and credit unions that have a lower rate to pay off their original motorbike loan. The borrower will thus pay less money on interests.
P2P lending
Peer-to-peer lending sites are an accessible motorcycle financing option for borrowers who do not own a credit card or bank account. P2P Lending is done on sites that connect lenders who furnish unsecured loans to individuals who need it. Borrowers can get motorcycle financing without the need for a credit card.
Other financing option: unsecured personal loan
Unsecured personal loan from money lenders
If you want unsecured motorcycle financing from lenders, the interest rate is usually 1-4 % for the first year of their loan. The advantage of unsecured credit is that borrowers will get the financing decision almost immediately.
For shorter-term and lower interest financing, borrowers can consider a personal loan from licensed money lenders. Depending on the legal requirements and qualifications, a borrower can get up to six times their salary.
Tips for Getting the Best Motorcycle Loan
- Review your credit score. It will help you determine the type of motorcycle financing that you can get. Indeed, lenders look at a borrower’s credit scores to gauge his ability to pay his obligations and decide whether to approve the application based on that.
- Use a loan calculator. This is to know if you can afford a particular motorbike based on your current financial situation. Know your budget and only buy within your means, so you don’t risk defaulting on your payments. Also, don’t forget to factor in the road tax required each year which costs around $63 in Singapore.
- Shop around for the best loan that you can get with your budget. When choosing one, compare the interest rate, the total amount you will be paying, and the loans’ monthly payment. Check the lender’s online sites and the contract’s fine print to see if they have additional fees.
- It is not advisable to use your credit card to make purchases. This is because of their high-interest rates and penalties for late payments.
We hope that this article has helped you learn more about motorcycle financing.
If you require a motorbike reloan for your current motorcycle credit, 1 Fullerton Credit will be able to help! 1 Fullerton Credit is a licensed money lender that is open every day of the week.
Fill out an application form to set an appointment and customize your plan. Once agreed with the terms of the contract, you can instantly receive your loan amount.
