8 Benefits of Taking a Motorcycle Loan Over Cash Payment

Deciding on how to finance a motorcycle purchase can be very challenging. Generally, there are two main ways you can finance your dream bike: cash or a loan. If you have enough savings, you may probably want to buy cash.

However, not many people can be able to afford to pay cash. Sometimes even those who can pay cash get confused about which financing option is ideal. This article provides a comprehensive overview of the benefits of using motorcycle loans over cash payments.

Why do people use cash to pay for their motorcycle purchases?

Not everyone can afford to pay for their motorcycle in cash. However, those who can make cash payments tend to enjoy several benefits, such as limitations on overspending. Also, cash payments do not involve any interest rates, so you can save some money.

Despite the benefits that come with cash payments, there are also drawbacks. For one, there may be limitations on the type of motorcycle you will need to buy. Also, cash payments can significantly drain your savings, making you take on a financial burden.

Benefits of a motorcycle loan over cash payment

A motorcycle loan is a loan that online lenders offer borrowers to purchase a motorcycle. The loan is either secured or unsecured. The secured loan will use the motorcycle as the security, while the unsecured one will not need collateral. You can enjoy several benefits by using a motorcycle loan to finance your purchase over cash payment. Here are the top benefits:

1. It enables you to buy your dream bike

In the market, there are many motorcycles from various brands. The options available expand your choice options. Sometimes, you may find a bike that pleases you and has the specifications you need. However, it may be out of your budget.

In such a case, getting a motorcycle loan is the best thing for you. A motorcycle loan ensures you can purchase your dream bike if you lack enough cash to pay. Most lenders will require you to make at least a 10% down payment while they provide the other 90%.

2. It is faster to access the funds through a loan than saving

Not many individuals will have ready savings to buy their dream bikes. If you purchase with cash but lack the funds, you need to start saving. The saving period may take a while before you reach the amount necessary to cover the entire purchase cost. It may even take more than 18 months, depending on your income.

On the other hand, if your lender approves your loan, you can have access to the funds at a faster rate. The fast access to funds ensures you do not need to wait long to buy the motorcycle of your choice.

3. Provides a financial relief

In most cases, people use their savings to settle emergencies. Therefore, using your saved funds to purchase a motorcycle might be unwise. So, what will happen if bad times strike? It is always vital for one to have savings to cope with bad times or immediate financial requirements.

One of the main reasons a motorcycle loan is the best is that it enhances your ability to use your savings to cater to emergencies only. A motorcycle loan provides financial relief because you do not need to dry up all your savings. You will only need to spend a portion of your monthly income to settle the loan.

4. It has easy application procedures

Many individuals have the misconception that applying for a motorcycle loan involves a complicated process. The misconception often drives them to consider cash. However, that is not the case. In this modern world, it is very easy for anyone eligible to get a bike loan to access them.

Many lending companies and financial institutions encourage online loan applications. In addition, you can search for a suitable lender online without visiting their physical office at first. Thus, the online process makes the loan shopping procedure easy.

You can begin your loan application process from the comfort of your own home. Furthermore, after providing the necessary documentation to the lender, you can receive your loan in no time.

5. It has minimal impact on your monthly budget

There is a high chance that out-of-pocket payments can leave you cash-strapped. A motorcycle loan will help you eliminate the financial dilemma. Furthermore, paying monthly instalments to settle the loan is much better than being cash-strapped.

The motorcycle loan will ensure you still have enough funds to cover expenses like medical bills. Thus, a loan has minimal impact on your monthly budget. Another merit of the loan is that you can still save while paying off your loan.

6. It avails an opportunity to enhance your credit score

Maintaining a good credit score is essential, primarily if you aim to get a bigger loan in the future. In most cases, lenders often offer motorcycle loans at low-interest rates. The low-interest rates ensure that repaying the loan is very easy.

On-time loan repayment is beneficial as you stand a higher chance of improving your overall credit history. It will also make loan approvals in the future to be very easy. In addition, some lenders will offer you a motorcycle loan even if you have bad credit.

7. Flexible terms of payment

Generally, many motorcycle loan lenders provide a 12-38 months repayment period. It means you can choose how long you would like to settle the loan. Given the repayment period, lenders will calculate how much interest you will need to pay.

Thus, it is always crucial to determine your financial capabilities. The flexible payment terms will ensure you can own your dream bike while making payments each month, depending on your financial ability.

8. It helps cover additional costs

In most cases, motorcycle purchases come with extra costs. For instance, you may need accidental or insurance coverage. The bike may also require additional accessories or customization.

Unlike cash payments, the motorcycle loan will help you cover any additional costs that come with the motorcycle purchase. It means you do not need to waste time saving for additional accessories or other costs.

In addition, some lenders collaborate with motorcycle dealers to offer bike owners benefits, such as cashback, discounts, and insurance coverage. Therefore, you stand to benefit more from motorcycle loans than from using cash payments.

Final thoughts

The decision on whether to use cash payments or motorcycle loans for bike financing comes down to the outcome of the financing method. Currently, lenders offer loans that provide borrowers with exciting benefits, ensuring that it is a more convenient and comfortable option.