How to Pay Off a Motorcycle Loan Early
If you’re in the market for a motorcycle but don’t have the cash to pay for it upfront, a motorcycle loan can come in handy. Motorcycle loans are available at banks, credit unions, online lenders, dealerships, and manufacturers. In most cases, they’re secured, meaning you must back them with collateral, which is usually the motorcycle itself. If you default on your loan, the lender may repossess your motorcycle.
While secured motorcycle loans are the most common, unsecured loans do exist. With an unsecured loan, you won’t have to put your motorcycle on the line but you may need a high credit score to get approved and might have to settle for higher interest than you would with a secured loan.
No matter what type of motorcycle loan you take out, you may want to pay it off early. By doing so, you can save on interest charges, which can equate to hundreds or even thousands of dollars. Paying your motorcycle loan ahead of schedule can also reduce your debt burden and give you some peace of mind. Here are some tips on how to do so.
Make biweekly payments
If possible, change the frequency of your motorcycle loan payment to every two weeks rather than once a month. With this strategy, you’ll make one extra payment every year and save a lot of money on interest while you’re at it.
Round up your motorcycle loan payments
Another way to increase your payment schedule is to round up on your payments. Let’s say you owe $1,150 per month on your motorcycle loan. You might want to pay $1,200 per month instead. This can help you cut your interest charges without making a drastic change to your monthly budget.
Review extras
When you take out a motorcycle loan, the lender may include additional fees that you don’t necessarily need or want in your contract. These may be service contracts, extended warranties, and tire warranties. Since these extras can slow down your early payoff, find out if you can remove or cancel them.
Earn extra money
It can be difficult to pay off a motorcycle loan early if you don’t have a lot of money left over after you pay all your bills. If your income is making it difficult to reach your early payoff goal, try to find ways to increase it. Pick up a side hustle, get a part-time job, rent a room in your house, or even ask your boss for a raise at work.
The Bottom Line
Paying off a motorcycle loan early is no easy feat. However, with determination and planning, it’s certainly possible. Best of luck!
Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of [publisher] or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.
Pranab Bhandari is an Editor of the Financial Blog “Financebuzz”. Apart from writing informative financial articles for his blog, he is a regular contributor to many national and international publications namely Tweak Your Biz, Growth Rocks ETC.
