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Subprime Mortages Having An Effect On The Motorcycle Loan Market

By: Jay Fran

In the past year and beginning of the New Year it is not a secret that the banks are having some major issue with respect to loan losses. But these losses are not only affecting the banks mortgage business. In fact it has been noted that many banks may be selling off their auto loan businesses and motorcycle loan businesses just to raise capital. This will result in a tougher motorcycle loan market for the New Year.

If you are a motorcycle buyer in the New Year expect the ease of motorcycle financing to not be so easy anymore. There will be lenders still offering motorcycle loans but these loans will be much more restrictive than in the past. Expect higher interest rates and if you have had credit issues your loan may be a little harder to obtain. Therefore, it is important to get your credit cleaned up if you have had any issues in the past. Also try to minimize the outstanding debt you have showing on your credit report. This will help you when bank look at your credit report and determine if you are a good or bad credit risk.

A change in the credit scoring model from Fair Isaac will likely have an impact on the market in late 2008 if bike lenders adjust their scoring models to reflect this market. Essentially this scoring model will help those with past credit problems that are currently current on all their payments. So it takes into account the most recent credit score situation a little more than the past credit scoring model from Fair Isaac. But do not expect this new model to just open up the credit for sub-prime customers.

For motorcycle buyers internet motorcycle loans may work out a bit better in the new year than other forms of financing. Online lenders are lean and do not many times have the overhead that banks have. As a result, they can frequently offer some better rates. Many of the internet based motorcycle lenders did not do mortgage loans so they do not have huge loss exposure. This helps them offer better rates than many of the bigger banks that have substantial mortgage loss exposure.

If you have bad credit and are declined for a motorcycle loan do not get discouraged. Often new motorcycle buyers find themselves discouraged by a decline. But in the New Year declines will be more frequent so you will likely have to submit applications with different banks and lenders. Owning a motorcycle is one of the best experiences so make sure you get to enjoy this lifestyle.

With internet based motorcycle loans you will find that it is quick to submit an application and get a response. Also there is good communication from online motorcycle lenders so your service will be high quality. When you are approved for motorcycle financing online your funds arrive fast and you can get to the dealer quickly to pick up your bike.

You may find in 2008 that motorcycle lenders also force you to put money down for a motorcycle loan where in the past they were more willing to give you a zero down payment motorcycle loan. This is simply a reflection that the banks are way under funded and need to be very wise about their loans.

Losses to banks in general are higher this year versus last so banks may require insurance. Be prepared to get motorcycle insurance if you finance in the New Year and also look to make sure you can afford your bike and insurance. Late payments will result in higher repossession and lenders look to repo bikes faster in the New Year to off set losses. In general, a newer bike yields more used to lenders than older bikes.

If you want to ensure you get financing in the New Year, make sure you let the lender know you have money down, insurance, and clean up your credit. These 3 things can help the most. But this does not mean that if you have bad credit in the past you can not be approved, you will simply have to work harder.

Article Source: http://www.article-exposure.com

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