What is a Motorcycle Loan?
A motorcycle loan is a type of loan that can be used to purchase a motorcycle. The loan is typically offered by banks or other financial institutions, and the terms and conditions may vary depending on the lender.
How Does A Motorcycle Loan Work?—Defining And Comparing
Motorcycle loans are a popular way for Filipinos to finance their purchase of a motorcycle. A motorcycle loan is a form of credit granted by a lender to an individual or business, and typically requires collateral, such as the motorcycle itself. The borrower promises to pay the loan back over time, with interest, according to agreed-upon terms and conditions. Motorcycle loan interest rates may be fixed or variable—fixed-rate loans have an unchanging interest rate, while variable-rate loans may fluctuate depending on market conditions.
When considering any type of loan, it’s important to compare different offers from various lenders according to terms and conditions (e.g., repayment period), cost (interest rate), and credit history. Motorcycle loan interest rates vary by lender and can range from 4% to 30%. Generally, those with a good credit score will be offered the most competitive rates.
In addition to motorcycle loans, other forms of financing include cash payments, second-hand dealership finance, and co-branded credit cards. Cash payments are usually not recommended as you may end up overpaying for your motorcycle purchase. Second-hand dealership finance is common in the Philippines and often offers lower interest rates compared to motorcycle loans. Co-branded credit cards offer special discounts or rewards when used to purchase motorcycles or related goods/services.
Why Is It Good To Apply For A Motorcycle Loan?
Applying for a motorcycle loan is beneficial in many ways. For starters, it allows individuals to purchase the motorcycle they desire without having to pay the full amount upfront. Motorcycle loans typically have lower interest rates compared to other forms of financing, such as personal loans or cash advances. Additionally, with a motorcycle loan, borrowers can spread out their payments over an extended period of time, making them more manageable and allowing for greater financial flexibility.
Another benefit of applying for a motorcycle loan is that it helps to improve an individual’s credit score. Making regular, on-time payments on a motorcycle loan will help to demonstrate responsible credit management and may increase one’s overall creditworthiness. It is important to note that individuals should always compare different offers from various lenders according to terms and conditions (e.g., repayment period), cost (interest rate), and credit history prior to signing any agreements.
In addition to improving one’s credit score, applying for a motorcycle loan can also lead to discounts or rewards when used to purchase motorcycles or related goods/services. Some lenders may offer special promotions or incentives when customers apply for loans, such as cashback offers or discounted interest rates. Additionally, some co-branded credit cards provide users with access to exclusive discounts at participating retailers when purchasing motorcycles or related services via their card.
Overall, there are many benefits associated with applying for a motorcycle loan in the Philippines—from lower interest rates than other forms of financing and improved credit scores, to exclusive discounts and rewards—making it an attractive option worth considering before making a purchase decision.
Why Should I Secure A Motorcycle Loan From A Bank?
Securing a motorcycle loan from a bank can provide many benefits, including more competitive interest rates, greater flexibility in terms of repayment periods, and security of funds. Banks typically have more stringent approval criteria compared to other lenders such as dealerships or online providers, but they can also offer some of the best rates on the market.
When securing a motorcycle loan from a bank, borrowers will enjoy competitive fixed-rate or variable-rate interest rates that may be lower than those offered by other forms of financing. Additionally, banks often offer greater flexibility in terms of repayment periods—allowing borrowers to choose how long they want to pay off the loan—allowing for greater financial planning and management. Furthermore, since banking institutions are highly regulated and secured by deposit insurance schemes such as the Philippine Deposit Insurance Corporation (PDIC), borrowers are assured that their money is safe and protected from fraud or unforeseen events.
Securing a motorcycle loan from a bank provides numerous advantages over other forms of financing including more competitive interest rates, greater flexibility in terms of repayment periods, security of funds due to deposit insurance schemes such as PDIC along with access to various banking services which make the loan process easier for individuals.
Types Of Motorcycle Loans
Purchase of a Brand-New Vehicle
When purchasing a brand-new motorcycle, borrowers can take advantage of various loan packages that offer lower interest rates and more flexible terms than other forms of financing. Banks typically offer two types of motorcycle loans: direct lending and secured lending.
With direct lending, borrowers receive the full loan amount upfront and make fixed payments over a specified period of time based on the agreed repayment plan. This type of loan is ideal for those who are buying a new bike as it allows them to pay off the purchase in affordable installments.
Secured loans, on the other hand, require borrowers to put up some form of collateral such as a vehicle or property to secure the loan. This type of loan is especially beneficial for those who are unable to provide proof of income or have bad credit scores, as lenders tend to be more lenient with secured loans due to their reduced risk. Additionally, with secured loans, borrowers often enjoy lower interest rates compared to other forms of financing since lenders view them as less risky investments.
Purchase of Secondhand Unit
When purchasing a secondhand motorcycle, borrowers should take into account the additional costs associated with such a purchase. Secondhand motorcycles may come with hidden costs that can significantly increase the overall cost of ownership. Furthermore, buyers should also be aware of any potential repair costs that may arise from purchasing an older vehicle.
To minimize these risks and ensure a successful purchase, borrowers should carefully assess the condition of the motorcycle before making a decision to purchase. Additionally, they should also consider getting an inspection done by a professional mechanic to identify any potential problems that could affect their use of the vehicle.
Types Of Vehicles That Can Be Considered For A Motorcycle Loan
Regular-sized motorbikes are the most common type of motorcycles, and they come in a variety of styles, sizes, and engine capacities. Regular-sized motorbikes typically have an engine capacity between 50cc to 700cc and can be used for any type of riding. These bikes can be found in almost any price range, so they are often an attractive choice for those who are looking for a reliable and affordable vehicle.
Big Bikes, also known as large capacity motorcycles, are a type of motorbike that are typically larger in size and have an engine capacity of 750cc or higher. Big Bikes are usually used for long-distance riding, as they offer greater power, speed, and control than smaller motorbikes. Although they tend to be more expensive than regular-sized motorbikes, they provide riders with a more comfortable ride due to their larger frames and higher ground clearance.
In the Philippines, Big Bikes are popular among motorcycle enthusiasts who enjoy long-distance and off-road rides. These bikes offer plenty of amenities such as superior suspension systems, enhanced brakes, electronic fuel injection systems for improved performance, adjustable seats for comfort during long rides, and in some models even cruise control. Additionally, many Big Bike models come equipped with advanced safety features such as antilock brakes and airbags which can help protect the rider from potential accidents or injuries.
Tricycle and Drivers Association (TODA) Vehicle
The tricycle bike in the Philippines is a motorbike type similar to a regular-sized motorbike, but with an added third wheel. Tricycles, or TODA vehicles as they are often referred to, are the most commonly used type of motorbike in the country and are popular among commuters who need a reliable form of transportation. These bikes are typically smaller than regular-sized motorbikes and have an engine capacity ranging from 50cc to 200cc.
Tricycles offer riders great maneuverability and can usually fit two people comfortably. The three wheels also provide great stability, allowing riders to go through tight turns or maneuver around obstacles with ease. Additionally, these bikes can often be found for cheaper prices compared to regular-sized motorbikes, making them appealing for those on a budget.
Non-Conventional Vehicles (3-Wheelers, etc.)
Non-Conventional Vehicles, such as 3-wheelers, are becoming increasingly popular in the Philippines. These vehicles generally have three wheels and are powered by motors ranging from 50cc to 200cc. They are often used for shorter trips, such as running errands or picking up groceries, and provide an alternative to traditional motorcycles or cars.
How to Apply for a Motorcycle Loan
To apply for a motorcycle loan, you will need to provide some personal information, such as your name, address, and contact information. You will also need to provide detailed information about your income and employment, as well as your credit score. You may be able to apply for a motorcycle loan online or in person at a bank or other financial institution.
Why Should You Get a Motorcycle Loan?
1. The Application Process is Usually Quick and Effortless
Problem: Applying for a motorcycle loan can be a long and tedious process. You have to gather a lot of information and go through several rounds of interviews.
Agitate: And if you don’t have a perfect credit score, you may not even be eligible for a motorcycle loan.
Solution: The good news is that there are lenders who offer motorcycle loans to people with less than perfect credit scores. So don’t give up just yet. Check out our list of the best motorcycle loans for bad credit below.
2. You Won’t Have to Touch Your Savings or Emergency Fund
If you’re tight on cash, a motorcycle loan can be a great way to get your hands on a new bike without having to touch your savings or emergency fund. Most lenders will allow you to finance the entire cost of the motorcycle, including taxes and fees. This means you can get your new bike without having to pay a penny out of pocket.
3. You Can Use the Loan for Any Type of Motorcycle
Problem: You can only use a motorcycle loan for certain types of motorcycles.
Agitate: What if you want to buy a custom motorcycle that isn’t covered under the loan?
Solution: The good news is that most lenders will allow you to use the loan for any type of motorcycle, including custom bikes. So whether you’re in the market for a cruiser, sports bike, or scooter, you can use a motorcycle loan to finance your purchase.
3. You May Get a Low Interest Rate
Banks and other financial institutions typically offer low interest rates on motorcycle loans, which can help you save money in the long run. So if you’re interested in purchasing a new motorcycle, it’s worth checking out the interest rates offered by various lenders. You may be able to get a lower interest rate than you would if you used a credit card or personal loan.
Where to Get a Motorcycle Loan in the Philippines
- Minimum loan amount: PHP 200,000
- The maximum loan amount you can receive is up to 70% of the purchase price.
- Payment terms: 12 to 36 months
|Term||Add-on Rate||Effective Rate|
- Minimum loan amount: PHP 300,000
- The maximum loan amount that you may take out is 70% of the purchase price.
- Payment terms: 12 to 36 months
|Add-on rates (net) In arrears||With one month advance|
- The minimum loan amount is PHP 200,000.
- Payment terms: 12 to 36 months
- Interest rate:
- 0.54% for MV Agusta motorcycles
- Loan amount:
- The regular bike will cost you a minimum of 10% based on the suggested retail price.
- Bigger than 30% based on SRP: The average person who is five feet tall has a minimum of 300 RPM.
- If an item is secondhand, you will get 8% of the store’s listed price.
- Payment terms: You can choose to pay off your purchase within six to thirty-six months.
Interest rate: Will depend on the selling price, down payment, and amount financed
City Savings Bank
- The minimum amount you can loan is PHP 20,000.
- The most you can borrow is: PHP 300,000
- Payments are for 12 to 48 months.
The interest rate for this loan will be determined by the selling price, down payment, and amount being financed.
Sumisho Motor Finance Corporation
- The maximum loan amount is PHP 20,000.
- The maximum loan amount is PHP 1.8 million.
- Payment terms: 1 to 4 years
- Interest rate: Depends on the selling price, down payment, and amount financed
What are the Requirements for a Motorcycle Loan
The requirements for a motorcycle loan may vary depending on the lender, but most will require you to be at least 18 years old and have a valid driver’s license. You’ll also need to provide proof of income and residency, as well as a credit score that is in good standing. Some lenders may also require you to have collision and comprehensive insurance coverage on the motorcycle.
How to Apply for a Motorcycle Loan
1. Know If You’re Eligible
The first step in applying for a motorcycle loan is to make sure you meet the eligibility requirements set by the lender. This includes being at least 18 years old and having a valid driver’s license. You’ll also need to provide proof of income and residency, as well as a credit score that is in good standing.
2. Compare Interest Rates
Once you know you’re eligible, the next step is to compare interest rates between different lenders. This will help you find the best deal on your motorcycle loan. Keep in mind that interest rates may vary depending on the type of motorcycle you’re purchasing, your credit score, and the amount of the loan.
3. Complete an Application
Once you’ve found a lender with a competitive interest rate, the next step is to complete an application. This will include providing personal and financial information, such as your name, address, income, and credit score. The application will also ask for details about the motorcycle you’re purchasing, such as the make, model, and year.
4. Provide Documentation
Once you’ve submitted your application, the lender will request additional documentation to verify your information. This may include your driver’s license, proof of income, and copies of your recent bank statements.
Additional Tips When Applying for a Motorcycle Loan
1. Pay the Down Payment Using Your Own Money
2. Compare Your Options
3. Ask Questions
4. Ask Your Family and Friends For Recommendations
Is there motorcycle loan in the Philippines?
Yes, there are motorcycle loans available in the Philippines. Motorcycle loan products can be found with both local banks and private lenders offering financing solutions for different types of motorbike purchases. Generally, these loans offer features such as flexible repayment terms, competitive interest rates, and low down payments.
In order to qualify for a motorcycle loan in the Philippines, applicants must have a good credit history, a steady source of income, and sufficient collateral to secure the loan amount. Furthermore, they should also provide proof of residence and other necessary documents such as valid IDs or certificates of employment. Once an applicant is approved for a motorcycle loan, they will be required to make regular payments according to their repayment schedule.
Do banks give loans for motorcycles?
Yes, banks do offer loans for motorcycles in the Philippines, although there are certain criteria that must be met in order to qualify. Generally, applicants need to have a good credit history and a steady source of income, as well as sufficient collateral to secure the loan amount. Additionally, they need to provide proof of residence and other necessary documents such as valid IDs or certificates of employment. Once approved for a motorcycle loan, applicants must make regular payments according to their repayment schedule in order to stay current with the loan.
How much is downpayment for motorcycle Philippines?
The downpayment for a motorcycle in the Philippines varies depending on the type of bike, the size of the loan, and other elements such as credit score, collateral offered, and any additional fees. Generally speaking, most lenders require between 10%-50% of the total cost of the bike to be paid upfront as a down payment.
Is it smart to get a loan for a motorcycle?
In most cases, it can be smart to get a loan for a motorcycle because it allows you to pay over time, rather than having to make the entire purchase in one go. Furthermore, motorcycle loans are generally offered with competitive interest rates that are lower than those associated with car loans. Additionally, as long as you stay current on your payments and maintain good credit standing, taking out a loan for a motorcycle won’t have any negative impacts on your credit score. That being said, always take into consideration your financial circumstances before taking out any type of loan and be sure that you can afford the monthly payments before making a commitment.
What is the best way to finance a motorcycle?
The best way to finance a motorcycle is to explore the various financing options available that are tailored to an individual’s budget and financial circumstances. Motorcycle loans are offered by various lenders, including banks, private financiers, and online lenders.