While many lenders are hesitant to hand out loans to those with bad credit or a bad credit history, this is not the case with all lenders. Some lenders are granting motorcycle loans to those with bad credit because they are not as focused on your past history. They use other ways to decide if your credit is worthy of a loan, such as looking at your job history and debt-to-income ratio.
Military personnel with poor credit hoping to get a motorcycle loan need not worry because it's possible. Here is what you need to know in trying to get the loan.
Why have motorcycles become so popular?
Military personnel can appreciate the sense of freedom a motorcycle allows when driving making them feel less restricted. The market for motorcycles has increased over the last few decades because they are less expensive than cars.
They are more popular than cars with many military men and women because they are cheaper to run, they look great and they are exciting to ride. They are easier to repair and park, they can stop anywhere and they are more flexible in traffic.
While motorcycles are less expensive, motorcycles are still considered a large purchase, so military personnel are usually still in need of a military motorcycle loan. The loan allows them to make monthly payments on the motorcycle rather than providing the cash upfront for the large purchase.
Buying New or Used
Military personnel that have decided to try to get a motorcycle must first decide if they want something used or new. It's going to cost more to get something new and the price is on average $12,000. With a military loan, you are only going to get up to $4,000 so you'd have to be prepared to pay the rest in cash up front or have them take the rest out of your monthly military pay.
Another option for military is to get something used with your motorcycle loan. Bikes in great condition are on sale all of the time for a great deal where the loan may cover the whole bike or most of it.
What does the Installation Loan Cover?
The great news about installation loans is that the military personnel decide what it will cover. Some choose to use it as a partial payment on a new bike, some choose to buy a used bike with it, and others use it for bike repairs. Repairs can add up on bikes because they sometimes need new tires, break pad replacements, and engine oil changes.
Others use their loan for upgrading their bike by getting a customized seat or getting a windshield more suited to their height.
Another option is to use the loan for motorcycle apparel and safety equipment. While it may seem that wearing leather jackets and boots is for appearances, this is actually designed to protect against wind chill and falling off of the bike. They even keep riders cooler in hot seasons with their breathable liner. The loan can go towards protective clothing or other safety equipment like a helmet and knee or elbow guards.
How to get the Loan
Having collateral to back up the amount of the loan is the only guaranteed way to get approved for the loan. Most people don't have collateral because if they did, they wouldn't need the loan.
Finding a lender that will work with all people knowing that most at some point encounter financial troubles is the key. Many lenders would rather see that you are paying your bills now and are holding a steady job that will allow you to make monthly payments.
Since bad credit scores are only one aspect of your financial story, lenders want to know more about your current situation. While they may analyze your information on the application more thoroughly than someone with good credit, it doesn't mean they won't approve you.
Being a military member provide a qualification not everybody has because you hold a steady job with a regular income. They will then take a look at your debt-to-income ratio to make sure you don't have more debt than your income can handle. Once all of these items meet the lenders requirements, it's likely you'll be offered a better rate just for being a military member.
While it may seem impossible to get a loan for those military personnel with bad credit, it's possible to get one if you can prove your income and if your debt-to-income ratio is acceptable. If those items don't meet their standards, work to improve these items and get current on all bills, and then you can try to apply again in the future.
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