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Over the past year, the motorcycle loan market saw motorcycle lenders start taking a closer look at motorcycle loans due to the problems they were having with bad credit mortgage loans. In the New Year you can expect things to remain a little stricter. The first part of the New Year will see banks facing much more pressure due to bad credit mortgage loan losses. These losses are affecting all loans but in general motorcycle loans may be impacted a little more. With the New Year looking stricter for motorcycle loans many motorcycle buyers are asking what should my expectations be for the New Year. For one, motorcycle buyers should not expect low motorcycle loan rates as in the past. Even though mortgage rates are decreasing currently motorcycle lenders are being squeezed due to a higher cost of funds. No longer can lenders raise funds as cheap to loan so they have to raise interest rates to compensate. There is some hope for borrowers on the horizon. Fair Isaac is in the process of developing a new credit scoring model that will be more favorable to those who are current on their payments even though they may have had some issues in the past. These changes will probably slowly flow into motorcycle loans, but it may take some time. Normally lenders do not adapt to the latest and greatest models right off the bat. Online motorcycle loans may fair better than traditional banks. The reason being is that many of the online lenders do not have the substantial overhead that the local and big banks have. So they are more able to adjust to the changing circumstances. Also online motorcycle lenders did not face the huge exposure in the mortgage market because online motorcycle lenders are traditionally more specialized. As a motorcycle buyer if you are not approved in the New Year, you should not get frustrated. In general lenders will be much more critical of all the loans they issue including motorcycle loans. Documentation will increase and the verification of documentation will also increase. If you are not approved for motorcycle financing in the New Year, you should simply move to the next lender. There will be a wide variation between banks so just because one bank declines you does not mean that all banks will decline your motorcycle financing application. With internet based motorcycle loans you will find that it is quick to submit an application and get a response. Also there is good communication from online motorcycle lenders so your service will be high quality. When you are approved for motorcycle financing online your funds arrive fast and you can get to the dealer quickly to pick up your bike. You may find in 2008 that motorcycle lenders also force you to put money down for a motorcycle loan where in the past they were more willing to give you a zero down payment motorcycle loan. This is simply a reflection that the banks are way under funded and need to be very wise about their loans. Losses to banks in general are higher this year versus last so banks may require insurance. Be prepared to get motorcycle insurance if you finance in the New Year and also look to make sure you can afford your bike and insurance. Late payments will result in higher repossession and lenders look to repo bikes faster in the New Year to off set losses. In general, a newer bike yields more used to lenders than older bikes. Do not get frustrated when applying for your motorcycle loan. Just try to remain positive and work with as many banks as you can to get your loan. Having some money down may help your case with the bank so make sure this is known by the bank up front. If you do not get approved just be persistent and remain positive. You deserve the motorcycle.
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