topic Re: Motorcycle loan: hive mind wisdom sought in Auto Loans

Motorcycle loan - updated with approvals

KJinNC — Sat, 27 Jun 2020 00:10:08 GMT

I would like a loan for the purpose of buying a motorcycle, probably about $12K, haven't chosen a specific motorcycle yet.

For anyone who has never looked into this, motorcycle loans are handled differently from auto loans, due to the greater risks involved. Rates are often higher, and sometimes you just get a personal loan instead of a title loan.

Option 1: Coastal Federal offers a personal line of credit, up to $25k, with interest rates as low as 5.5%. This has obvious advantages relative to a loan against the motorcycle title, but I assume it'll be harder to qualify for, at least anywhere near the higher amounts and best rates.

Update: Approved for $14K, 5.5%. I asked if they could reconsider me for a higher amount and they agreed to check, but, $14K is enough.

Option 2: Navy Federal offers motorcycle loans a little above 7%.

Update: When I applied, the application page you see in the middle of filling out info listed possible interest rates ranging from 3.something to 16.something. I was approved for 5.49%. I guess their published rates (starting at 7.09%) are out of date. However, I plan to use the Coastal PLOC instead, since the rates are the same and that means no lien on the title, as well as possible future flexibility.

I have been a Coastal Federal member for over 33 years, I do direct deposit with them, my auto loan is with them, and I have a signature Visa through them. My history with them is flawless. On the other hand, I applied for a credit limit increase on the card a few months ago and was denied.

I have been a Navy Federal member for a few months. My business with them so far is limited to a Cash Rewards Visa with a CL of $1,000. My brief history with them is flawless. I am interested in getting a Flagship card in the future.

My annual income is about 10 times the loan amount I'm interested in. As you can see in my signature, my credit is "good" but with heavy credit-seeking, including some 2-4 months ago.

My questions are:

- Odds of approval for the PLOC at a sufficient amount and for a rate below the NFCU motorcycle loan rate

- Other options I may be overlooking. (Preferably, options that do not require me to join another CU or bank.)

Buying with cash is an option, but not an immediate option, it would take cash on hand into dangerous levels. If I got a good loan rate, I'd rather borrow it.

Thanks!

Re: Motorcycle loan: hive mind wisdom sought

RSX — Thu, 25 Jun 2020 20:38:10 GMT

I am surprised by this. I have bought 3 motorcycles, 2 used and one new and my rates were similar to my car loans

my new bike was 3.99% back in 2014

the other 2 used bikes were under 6%

ducati has a 1.99% option this month

Re: Motorcycle loan: hive mind wisdom sought

KJinNC — Thu, 25 Jun 2020 20:40:03 GMT

When buying new, dealerships or manufacturers may arrange promotional financing, but I'm more likely to buy from an individual, or used from a dealership. If you are aware of a bank that does motorcycle loans for rates lower than the ones I mentioned, I'm all ears

Re: Motorcycle loan: hive mind wisdom sought

RSX — Thu, 25 Jun 2020 20:50:27 GMT

I bought all 3 from dealerships

one was SpaceAge CU. Showing 5.49% today

one was Sheffield Financial

My new Aprilia was through them for 3.99%

Re: Motorcycle loan: hive mind wisdom sought

Anonymous — Thu, 25 Jun 2020 20:52:38 GMT

I'm looking into getting a loan early next year, and my bank, DCU, offers 4% for new or used.

edit: spelling

Re: Motorcycle loan: hive mind wisdom sought

RSX — Thu, 25 Jun 2020 20:56:18 GMT

Thanks for making me look, dammit. I sold my beloved Aprilia 1.5 years ago

just checked and they have a 0.9% deal on!

grrrrrr

Re: Motorcycle loan: hive mind wisdom sought

KJinNC — Thu, 25 Jun 2020 21:56:34 GMT

Thanks - I'm a member of the two CUs I mentioned plus PenFed. I don't see a motorcycle option on PenFed, so I guess it would be a personal loan there. The interest rate on their line of credit is much higher than Coastal's. I am also a Chase member, but, they don't offer motorcycle loans at all. I doubt I'd join another CU just for this loan, but maybe if they had other good reasons to join.

My main question is whether it's generally difficult to get a PLOC for this type of amount and interest rate, in comparison with qualifying for a loan with collateral. The PLOC would have several advantages over a loan with a lien on the motorcycle title, but I'm less confident that I would qualify.

Re: Motorcycle loan: hive mind wisdom sought

BmoreBull — Fri, 26 Jun 2020 12:20:34 GMT

I just recently joined PenFed, my wife has been a member forever because she works for DC government. She financed my bike through them back in 2014. So they do finance bikes. I can't remember what the rate was, the bike has been paid off and sold for about three years now. I'm sure you could call them and get a rate quote.

Re: Motorcycle loan: hive mind wisdom sought

KJinNC — Fri, 26 Jun 2020 12:31:14 GMT

Update: NFCU approved a loan at 5.49%. Oddly, I have not seen a hard inquiry show up on my numerous credit monitoring services yet.

This made me realize that actual rates may be lower than published rates right now, since rates have gone down so much recently. Their web site may not have been updated to reflect the new rates. The NFCU published rate is a minimum of 7.09%. This probably applies to other bank and CU published rates.

I am still thinking about applying for the Coastal PLOC, which would be the same interest rate at best, but I think it might be more useful in the long run. Also, if I understand correctly, it would not require collateral, so there'd be no lien on the title. But, do I dare? I feel like it must be harder to qualify for, due to the lack of collateral.

Re: Motorcycle loan: hive mind wisdom sought

Gmood1 — Fri, 26 Jun 2020 12:59:21 GMT

@KJinNC

I haven't ran across any PLOCs that require collateral. How hard to qualify depends on the lender. Most are a piece of cake. I know nothing about Coastal.

I went looking through a couple of CU's.

AOD FCU motorcycle rates are 3.75% to 4.50 % for 63 months.

Redstone 3.99% used or new.

Plenty of options. If buying new through dealer. I'd look for a 0% offer.

All of it depends on how much you're willing to pay in interest.

If Coastal has PLOCs that low. It would be nice to have around regardless, even if not used on a motorcycle purchase.

Re: Motorcycle loan: hive mind wisdom sought

KJinNC — Sat, 27 Jun 2020 00:02:21 GMT

Update 2: I was approved for the Coastal line of credit for $14K, which is what I asked for, at a current rate of 5.5%, but it floats with the prime rate.

Since this is the same rate as the NFCU motorcycle loan, I will use the PLOC, so I don't have a lien on the title. Although, I was looking forward to extending my relationship with NFCU to prep for a future Flagship card application.

Thanks for all suggestions. However, I didn't want to open another account for one loan, even assuming I would get the best available rate at a CU immediately after joining.

Re: Motorcycle loan: hive mind wisdom sought

Gmood1 — Sat, 27 Jun 2020 09:51:01 GMT

Congrats on your PLOC and terrific rate!

Worth noting the PLOC will report as revolving credit. While the motorcycle loan would have reported as a installment.

PLOC may well outlive the installment loan on your reports.

Especially after it's paid off.

The installment loan may have held more weight in a manual review for future credit.

Re: Motorcycle loan: hive mind wisdom sought

KJinNC — Sat, 27 Jun 2020 12:58:21 GMT

Thanks - I haven't actually used either yet, or received funds from either. So, I still could use the NFCU motorcycle loan, and let the PLOC be available for future needs. Although, if I did that, it would mean a lien on the title. I paid off a Self loan last year, and I currently have an auto loan. Do you think the motorcycle loan would help much in that context? Hmm, would a PLOC used in the way I'm planning to use it look like a maxed-out credit card for scoring purposes?

Another thought I had this morning in favor of the motorcycle loan is that it's a fixed rate, while the PLOC's rate will shoot up if the prime rate shoots up, and who knows what's going to happen in the economy over the next year or two.

Thanks!

Re: Motorcycle loan: hive mind wisdom sought

Gmood1 — Sat, 27 Jun 2020 14:25:30 GMT

@KJinNC

If you use more than 30% of that PLOC, it will sting your scores.

More so than the motorcycle loan reporting will.

I thought about the rate change as well.

Personally I'd do motorcycle loan.

You are your own man though, sometimes we have to let life teach us the do's and don'ts. 😆

Yes, I think the motorcycle loan would help over 10 plus years of your credit life. It would strengthen your profile even more so 18 plus months in.

It gives the UW a clear track record of you paying a bill. Unlike the PLOC which can fluctuate in and out like a credit card.

I have several loans on my CRs that I didn't actually need. I did it more so in order not to have that dreaded "thin file" code.

The better the mix, the better your REAL world credit. I'm not talking scores. Which so many people get hung up on around here. And still get denied with 800 plus credit scores.

This is just MY approach to building a strong profile. Do what works for you my friend.

Re: Motorcycle loan: hive mind wisdom sought

ldkcivilservant — Mon, 29 Jun 2020 18:36:48 GMT

I must admit, when I read the OP I was wondering why one would want a PLOC which when drawn on looks like a maxed out CC rather than taking an installment loan. The only benefit to the PLOC is not having a title lien, and I'm not sure why that would be worth taking the hit on scores for the maxed out PLOC.

Anyway, OP, you have your options so make your choice!

Re: Motorcycle loan: hive mind wisdom sought

KJinNC — Mon, 29 Jun 2020 19:21:08 GMT

Yeah, I realize now that wouldn't be a great idea. I have never had a PLOC and didn't think through how it would look on a credit report. I'm planning now to use the motorcycle loan instead. Thanks for all input! This is why we ask questions!