19 Aug All that you should know about MotorBike Finance!
A vehicle isn’t a luxury anymore. It has become an essential commodity. However, when it comes to affordability, not all can acquire a vehicle under self-financing options. In such cases, we will have to look for other options that can fund our requirement. The whole process doesn’t come to an end once you get the vehicle under your shelter, the real planning starts only after that. You have to plan your repayment strategy clearly. Only then you can choose the right finance option. Though it is not possible to thoroughly educate you on the process of acquiring a vehicle through loans, we will be able to help you gain the basic understanding of motor bike financing options available and how you should go about it.
What are the financing options?
As far as motorbike financing is concerned, there are two options available, Direct Lending and Dealership Financing
Credit unions, Banks, and other financial institutions are the various sources from which you can procure loan directly. The borrower and the lender go on an agreement basis where they negotiate and decide on terms of the loan amount, repayment period, interest and other miscellaneous charges. The main advantage of direct lending is that you have the chance to enquire about different lenders before fixing on one. Since you are getting the loan amount before buying the vehicle, you become aware of the rate and other terms that are highly helpful when you buy a vehicle.
As the name self-suggest, in dealership financing, you are funded by the dealer himself. It is the most prevalent type of vehicle financing. Instead of the financial institution, here you enter into a contract with the dealer. The next process is quite similar, you negotiate with the dealer and agree to the terms of loan amount, the rate of interest and the payback period. Here there is a third party called the assignee, to whom the dealer sells the contract. Now the amount due is payable to the assignee. The assignee can be any financial institution. The main advantage here is that you have multiple options and the dealer will help you to pick the right one. Sometimes dealers launch special credit rating programs for certain vehicles, which facilitate extended credit period, less interest and other options.
Quick tips to remember:
Before you choose a financing option, give these tips a quick thought. This will legally and financially save you any given day.
- Consult the state laws that impose conditions on vehicle financing and leasing process. Most of these laws are enforced to protect the consumers. So make sure you are aware of them
- Be certain of how much you can afford before you knock the doors of financial institutions. You might not be able to repay huge sum and might later regret your decision
- Plan your income accordingly so that you have a decent amount in hand even after you have paid your debts in a month.
- It is a great idea to short close your debts. But do not completely expend all your savings. You should have sufficient funds to meet unexpected expenses, which might arise.