While the auto industry seems to be more lenient in approving financing for buyers with poor credit, those looking to buy bikes often find it nearly impossible to find a lender willing to work with them. However, there are ways to improve your chances of getting approved for a bad credit motorcycle loan.
The first thing is to verify your income. Bring in pay stubs for several months, and/or copies of your last two tax returns. If newly employed, get a certified letter from your boss to prove t you do have a job. Many creditors may be willing to issue the loan if they can garnish payments right out of your paycheck each month.
Banks and other loan companies like to know that you are not transient. Proof of residency is important. Show them a couple of utility bills to prove residency as well as for identification purposes, along with a valid driver’s license. They will check your records with the Department of Motor Vehicles.
Your credit records will also be scrutinized, so it is a good idea for you to be aware of your own FICO score ahead of time. You can check it out yourself online. If you believe there are any mistakes regarding negative reports against you, contact your other lenders and try to get them corrected pronto. Even just one minor error can mean the difference between being approved for your motorcycle loan and being rejected. In addition, if your credit cards are already maxed out, you will need to try and reduce some of your balances by at least 30%.
Communication is the most important thing you can have with a lender. If you have filed for bankruptcy, let the lender know why. Was it because of a failed business, a catastrophic event in the family, high medical bills, divorce? Try to reassure them this is past history and will not happen again.
Getting someone to co-sign the loan with you in order to guarantee payments will be made even if you cannot make them is another option lenders may require. In addition, some lenders may demand that you take out extra insurance on the purchase such as GAP protection and extended warranties as well as full accident and theft insurance to cover any possible losses, and help guard their investment as far as resale value of the motorcycle should they end up repossessing it.
Financing