If you have had your eye on a new or used motorbike for a while. Perhaps you’ve been weighing up whether to purchase a sports bike or lean more toward an adventure bike. Chances are you haven’t given much thought to what type of loan you may need to purchase the motorbike.
So what’s the difference between an unsecured motorbike loan and a secured motorbike loan and what does it mean for you?
Secured or Unsecured – What is the difference?
A secured motorbike loan is where you secure an asset against the loan. Commonly this is the motorbike you are purchasing but motor vehicles, caravans or boats can also be used as security for the loan. Being a secured loan, if you can’t repay the debt back, the lender may sell the asset to recoup they’re money back.
An unsecured motorbike loan does not hold any security, however the level of risk is higher to the lender, meaning you may be charged a higher interest rate that that of a secured motorbike loan. With both loans the repayment depends on the loan amount and what term you decide to take the loan over.
Benefits of a Secured Motorbike Loan
A secured motorbike loan offers a range of advantages including:
Generally a lower interest rate – This is due to the overall risk to the financier being lower.
Quicker application and approval – Lenders will assess the loan quicker as they know what the funds will be used for.
Fixed Repayments – Your repayments are fixed for the loan term, meaning you know what you’re paying today and throughout the term.
Benefits of an Unsecured Motorbike Loan
An unsecured motorbike loan offers a range of advantages including:
No risk of losing your personal property – As there is no security held against the loan, should you not be able to pay the loan, you will not lose the motorbike.
Private Sales – Unsecured loans are generally easier especially if you’re purchasing through a private sale. You can have the cash readily available should you spot a bargain.
Lower Rates than credit cards – For many buyers, it’s an easy option to cash withdraw from they’re credit card, but usually get a shock when they find out the interest rate for cash withdrawals is high. Personal loans are often a much lower interest rate.
As with all financial products you need to consider the pros and cons to make sure the loan will be suitable for your needs.
If you need more information on secured vs unsecured motorbike loans, contact one of our motorbike finance specialists on 1300 350 118