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Bad credit motorcycle loans can be obtained if you follow the right strategy.
Your past credit is bad, and motorcycle lenders won’t deal with you.
With bad credit, motorcycles, atvs, utvs are more difficult to get approved for than an automobile.
Following the 8 steps in the next slides can significantly increase your chances of getting approved for a motorcycle loan for bad credit.
Also visiting http://www.motorcycle-financing-guide.com can help you get approved.
First knowing your credit can help you fix errors on your credit report.
Most credit reports have errors, fixing them can significantly increase your credit score.
Lenders will ask questions about your credit report. You need to have a copy in order to respond.
Accurately explaining your credit report can give a lender confidence. Have a good story ready for past dues.
Finding the right lender.
It is doubtful the big banks will approve you with bad credit.
Credit Unions are a better option than big banks, but credit unions won’t approve all bad credit.
If credit unions aren't working for you look for non-traditional lenders that specialize in bad credit motorcycle loans. These lenders are normally state specific and are much smaller than the big banks.
Find a Co-Signer.
Finding a co-signer can significantly help get approved for bad credit motorcycle financing.
It also helps with getting a lower interest rate if the co-signer has decent credit.
On joint applications, many lenders use the best credit score to determine the rate. So if your co-signer has a decent credit score it can help tremendously.
Average rate for bad credit is 19.9% APR.
With a co-signer that has a 700 credit score its possible to lower the rate to 7.99% APR.
Automated scoring can cause a decline.
Lenders automated scoring systems often decline for any of the following reasons.
Try to avoid these:
Debt to income over 45% with new motorcycle included.
Lower debt as much as possible and report all income
High credit card debt compared to credit limit
Credit card debt can impact approval if cards are maxed out. Try to reduce credit card debt before submitting application.
To many inquires for loans can impact an approval.
Each time you submit an application with a lender it creates an inquiry on your credit report. To many of these in a short amount of time can cause an automatic decline.
Be ready to proof income.
Proving actual income can be a big help in getting approved for bad credit motorcycle financing.
Have at least 2 recent pay stubs ready to show the lender.
2 years of tax statements might be necessary for those that are self employed.
Money down lowers lenders risk.
Providing a down payment for the purchase can give the lender a lot of confidence.
For bad credit motorcycle loans, try to at least have a 20% down payment.
Be sure to notify the lender of this on the credit applicatio