If you’re dreaming of buying a motorbike, you must settle your finances first. You might start saving money and creating a fund for the investment. However, you might suffer from poor credit scores and don’t want that to hamper your purchases.
How do you get your dream motorbike in this situation?
Well, you might start Googling “bad credit bike finance” to get a loan from financing agencies. But, it’s vital to improve your credit score, handle payments better and compare multiple lenders.
These steps put you in a better position to get the required financing for your bike. Continue reading to know all the details!
1. Stop Using Your Credit Card
Making all payments using credit cards is not a good move for having a good credit score. Being among the most common causes of debt, excessive credit card usage can hamper your credit score.
So, this is where you need to start.
Begin by using your credit card only when you are out of cash. You can do this for small purchases like buying groceries. Also, purchases with a cashback bonus are suitable for credit cards.
Moreover, avoid exceeding more than 20% of the credit limit to prevent debt issues later. An improved credit score will improve your chances of getting a better loan amount.
2. Highlight Your Improved Spending Habits
To get that desired loan or financing, you must convince the lender that you’re spending wisely. For this, you will require some proof of your efforts.
The most convenient method is to open separate savings accounts and put some money in them every month. Building sufficient savings will help you avoid emergencies that might lead to bad credit.
This account will be your emergency fund account, and you should not access it unless needed. Subsequently, you’ll get the necessary paperwork and documentation from the bank.
3. Get Multiple Quotes
It is extremely important to research and find out the multiple bad credit bike finance options in the market. Look for companies providing a reasonable rate of interest, along with appropriate terms and conditions.
If you feel that you can handle their loan repayments and that they fit your budget, opt for their services. Moreover, always get quotes from multiple companies to get a better comparison.
But, properly understand the terms and associated details before applying for the loan. This is because multiple applications can hamper your credit score.
4. Find a Co-signer
If you have a trustworthy friend with a good credit score, ask them to be your co-signer for the loan. They will be your guarantor, and the lender will consider their trustworthiness while approving your loan.
It automatically improves your chances of receiving a loan for your motorbike. However, if you fail to pay the loan, the co-signer will have to pay for it. That’s why it’s crucial to properly discuss with the co-signer before moving ahead.
You must strive to improve your credit score whenever you can. So, be aware of your purchases and cut costs when possible. Budgeting will come in handy while saving costs.
Moreover, you can lower your expectations and get a cheaper bike. In that case, you will need a lower loan amount and will have to make fewer repayments. It is always best to make purchases according to your financial condition.