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The Facts on Military Loans and Motorcycle Loans for Those With Bad Credit

Believe it or not, but applicants for military loans and motorcycle loans for those with bad credit exhibit a surprising array of similar characteristics that separate them from the general users of lending services offered by sub-prime lenders. For one thing, the demand for these two types of loans has taken a significant upward trend over the last decade, with demand for both increasing at about the same rate of growth.

Sub-Prime Lenders

Do not be put off by the connotation of sub-prime. It is not meant to make anyone feel inferior. It is a typical term in the lending markets. It simply refers to lenders who are willing to take a risk on borrowers who do not have the best credit ratings or credit histories. And many military loan and motorcycle loan applicants seem to have somewhat speckled pasts when it comes to credit histories.

Traditional Lenders

Traditional brick and mortar financial institutions, such as credit unions and banks, put a lot of stock in applicant credit ratings before offering a loan. These traditional lenders have tightened their credit policies making it much harder, for even the financially endowed, to get a loan nowadays. Unfortunately, military loans and motorcycle loans for those with bad credit are not exempt.

Gap In Lending Services

Noticing this gap in lending services, private lenders have stepped forth to tap into this market. However, if you have had long-standing accounts with traditional institutions, or if you have retirement or investing accounts with them, you should apply to them first. Your interest rates will be lower. If this is not the case, you should probably should just skip the hassle of applying with them and find a private lender for your military loan or motorcycle loan for those with bad credit.

Be Prepared to Shop

Since you already know that you have a poor credit rating, your best bet would be to seek lenders who specialize in military loans and motorcycle loans for those with bad credit. Before you do, you should prepare yourself. Check your credit ratings with each credit bureau. This will let you know precisely how lenders view you financially. Seek correction for any mistakes. Also, gather your documentation:

- Bona Fide Government Identification

- Proof of Job and Salary

- Checking Account Number (direct deposit)

- Proof of Residency

If you are looking for a motorcycle loan, you should have a model and a price pretty much squared away. Do not already have a deal signed. Walking onto a dealer lot with pre-arranged financing lets you call the shots when seeking a deal..

Loan Shopping

As mentioned earlier, the market has seen a significant rise in sub-prime lenders. You should be able to pick and choose to find the best interest rates, the lowest fees, and the most comfortable repayment terms. Many of these lenders have set up shop on the internet for military loans and motorcycle loans for those with bad credit. Just as you would for any transactions completed on the web, such as filling out financial and personal information forms, or loan applications, make sure the website is secure.

Know Your Lender

Check the reputation of the lender by browsing online Better Business Bureau listings and personal finance forums. Use the key phrases: Military Loans. Motorcycle Loans. You will be rewarded with website addresses of many lenders. You will even find brokers who will take your general and financial information and come up with a list of lenders most likely to approve your application for a motorcycle loan or military loan for those with bad credit.

Common Mistakes Motorcycle Buyers Make When Looking For a Motorcycle Loan

Whether interest rates are high or low or it's the end of a model year with lots of incentives, motorcycle buyers tend to make the same mistakes when shopping for a motorcycle loan. Here are four common mistakes motorcycle buyers make with motorcycle loans.

Shopping for a motorcycle before shopping for a motorcycle loan.

Many motorcycle buyers enter the showroom looking for a motorcycle before they determine how much money a motorcycle lender is willing to loan to them for the purchase of a motorcycle. There is no need to shop for a $20,000 Harley Davidson motorcycle, if a lender is only willing to provide a loan amount of $10,000.

Additionally, once motorcycle buyers enter the showroom slick salespeople often pressure them into motorcycle loans with much higher internet rates than they could have gotten had they shopped for a motorcycle loan at a bank, credit union or online. Salespeople do not like motorcycle buyers to leave the dealership to get a motorcycle loan. In the salespersons mind this only increases the chance of losing a sale and commission. Therefore, salespeople frequently try for a quick sale which normally results in pushing motorcycle buyers to get motorcycle financing at the dealership.

The bottom-line is that it is always best to shop for a motorcycle loan before entering the showroom.

Diving into the unknown motorcycle loan.

Motorcycle buyers often jump into motorcycle loans that they do not completely understand or may not be the best alternative for them. For instance, in today's age manufacturers frequently run credit card motorcycle loan promotions on their private-label credit cards. But these promotions typically offer a low interest rate for a short term like 12 or 24 months and have a much higher interest rate after the short promotional term. On a credit card promotion if motorcycle buyers can not afford to pay off the loan during the short promotion period, then they are typically better finding a lender offering an installment motorcycle loan for a longer term.

Borrowing too much.

The most common mistake the first time motorcycle buyer makes in not having a clear sense of how much motorcycle they can afford. This is especially true for young motorcycle buyers who look to buy the top sport bikes that cost up to $10,000 - $15,000. What they fail to realize is that financing a $10,000 - $15,000 motorcycle can stretch them to thin, resulting in them having little cash to enjoy themselves and the motorcycling lifestyle. They may also have too little cash to pay for insurance, maintenance, registration or new accessories for their motorcycle.

Not asking the right questions.

The first warning sign that motorcycle buyers should see is that if they do not understand the type of motorcycle loan, then they should be sure to ask a lot of questions.

Here are some good questions to ask:

o Is the interest rate fixed or variable? If fixed how long will it be fixed for?

o Are there circumstances that can make the interest rate on the motorcycle loan change in the future?

o What happens if a payment is 30 days late? Does the interest rate increase?

o What happens if a payment is 60 days late? Does the interest rate increase?

o How long is the term on the motorcycle loan?

o If the loan is an installment loan, does it use rule of 78 or simple interest? (Simple interest is always better because it does not penalize the motorcycle buyer if the loan is paid off early.)

o What is the down payment requirement to get the motorcycle loan?

o Is full coverage insurance required?

o How much is registration and are these fees included in the motorcycle loan?

o Are there any administrative fees to get the motorcycle loan and if so how much are the fees?

Overall, motorcycle buyers can avoid these common mistakes by spending a little extra time focusing on shopping for a motorcycle loan and asking lots of questions