The Definitive Guide to Getting a Motorcycle, ATV or RV loan with Bad Credit
Written by Carolyn Jackson
Introduction – Wait, Nobody Will Finance Me?
You did your research. You made it to the dealership. You walked the lot and fell in love. But then at the very moment when you can enjoy the sweet taste of victory, your dealer said those heartbreaking words: Your loan application has been rejected.
Did you know that up to 50% of consumers finance their motorcycles, and more than 50% of consumers finance their RVs?
It’s extremely common to get rejected for a loan. But if often feels like the only alternative is to sign the dotted line for a 25% APR.
But it doesn’t necessarily need to be that way.
We’re here to help you get financed without losing your shirt or eating ramen for the next year. In this guide we’re going to give you the Bad Credit 101 for getting a motorcycle, RV, ATV or UTV loan.
Credit Score Basics
Let’s start with the basics. Most of us have a credit score. If you have a credit card in your name or have ever taken out a formal loan from a financial institution, you have a credit score. Essentially, a credit score is a three-digit numerical value assigned to how well you repay the money you borrow.
When opening a new credit card, trying to buy a home, or in our case, taking out a loan for a motorcycle or RV, financial institutions look at your credit score as a measure of your trustworthiness to pay back the loan. They use this value to determine:
- If you qualify for them to give you a loan, and
- The percent of interest you will need to pay on top of the loan amount (called the principal)
If you have a good credit score, getting approved for a loan will be easy.
Think of your credit score as an indicator of your financial health. Imagine a friend asks you if they can borrow money. You know they don’t make enough income to pay you back quickly. You also know they owe other people money, and that they have had a hard time paying these people back on time. Would you want to lend your hard-earned money to that friend?
Banks feel the same way you do. However, banks are willing to still lend you the money because they can charge you high interest rates in order to mitigate their risk. Thus, individuals with lower credit will typically pay higher interest rates.
Not really fair, right?
The good news is that if you have bad credit, you have options. We will get to this shortly. First though, let’s help you understand where you stack up.
So, What Is a Good Credit Score?
This handy table will help you understand where you fall in the credit spectrum.
Remember: The advertised and promoted APRs and interest rates (such as the 0.9% APR ads you may see on TV or in magazines) are usually reserved for people with a credit score above 700. 800 and above is considered excellent, but anything above a score of 700 tends to be considered a good credit score. Most people’s score lies somewhere between 600 and 750.
Where can you find your credit score?
Free services like TransUnion, Credit Karma, Mint.com, or Experian can help you understand your credit profile. Once you have this information, you can then figure out if you qualify for the best loan rates.
The good news is that it is easier to get a loan with bad credit for a motorcycles, ATVs, UTVs or RVs than it is to get a loan with bad credit for a house. This is because it is easier for the bank or financial instruction to repossess and resell a recreation item than it is to repossess and resell a house.
OK so now that I know my credit might not be so great, what can I do to improve my score?
Follow These Steps to Improve Your Credit Score
The most common advice you will hear when you ask how to improve your credit score is that there is no quick fix. It takes time. It sucks, but it is true. The best advice for rebuilding credit is to manage your credit responsibly over time.
Some simple tips are:
- Set up payment reminders so you never miss a payment again. Even making a minimum payment is better than missing a payment when it comes to credit scores.
- Reduce the amount of debt you owe. If you are carrying a balance on a credit card or already have a loan (like a small loan on your furniture or appliance purchases), consider paying off some of those loans first before taking on any new loans or opening a new credit card, as any new loan will lower your credit score even if you pay that loan on time.
- If you have missed bills, pay up on them and then set reminders to stay current
- Keep balances low on credit cards and if possible, switch to debit cards
- Don’t close unused credit cards as a quick fix. Having long credit history with any lender increases your credit score. So, try to not use the credit card as opposed to closing it entirely.
- Do not open too many accounts within a short time span
- Do all your rate shopping within a short amount of time (a 30-day window is recommended) Applying to multiple lenders for a vehicle loan within 30 days does not lower your credit score since the credit agency knows that you’re probably going to shop around multiple lenders when shopping for a vehicle.
- It is OK to check your own credit report
OK this is great; but I want to buy a motorcycle today. How can I get financed with bad credit?
How Can I Get a Motorcycle Loan, ATV Loan, or RV Loan with Bad Credit? 7 Ways to Get Financed with Bad Credit
Many consumers have trouble getting a motorcycle loan. Here are a few options to consider:
- Try shopping for a used vehicle instead of a new vehicle
This will reduce the price you have to pay, making it easier to get credit.
- Take advantage of manufacturer finance incentives
As we discussed earlier, many OEMs have finance deals. Make sure to review them before you head to the dealer.
- Take advantage of manufacturer cash incentives
Many manufacturers provide cash off the MSRP of the vehicle. This will make the purchase price lower, possibly bringing it into the range a lender is willing to approve you for.
- Down payment
Put down a larger down payment (the larger the down payment the less the loan is, and the more likely you are to qualify).
- Credit Unions
Work with a local credit union as credit unions tend to have the most competitive loan rates.
Find a co-applicant with good credit. This will allow you to leverage their credit standing to get approved.
- Try Motolease
Motolease specializes in financing customers with a wide range of financial profiles and tends to have high approval rates.
- Don’t accept bad terms
Know that bad credit does not mean that you have to accept bad terms. Take some time and shop around for a loan rate you feel is fair.
List of Bad Credit Motorcycle Financing Companies and RV Financing Companies
Try to talk to these lenders to see if they can help you out. They are more amenable to lower credit customers than traditional banks:
- SpeedLeasing: Talk to your dealer representative as they work directly with dealers
- Fuel Capital: Talk to your dealer representative as they work directly with dealers
- No Credit Campers
- SE Financial
- AMS Financial
Unfortunately, coming to the table with bad credit does put you at a disadvantage. You may face less favorable terms or even predatory lending practices.
Your best defense against these negative outcomes is to do your research ahead of time. Walk into the dealership ready with these items:
- Knowledge of what your credit score currently is
- Quotes from other lending institutions
- How much you can afford per month
- How much you can afford to put down up front
- Understanding the total cost of ownership for your vehicle
- Researching what additional dealership fees you might be required to pay
- Knowledge of the general average for interest rates currently
With the above knowledge, you can go to the dealership prepared to get the best possible loan rate. Then, once you agree on a fair loan rate that works for you, you can start making on-time payments on that loan to build your credit. Win, win, right? Down the road you can consider refinancing your loan to achieve even better terms.
If you have more questions about getting a loan, check out our definitive guide to getting a motorcycle, RV or ATV loan. If you are still in the research phase of your process, you can review our motorcycle buying guide or RV buying guide which gives you more insight into finding the right vehicle for you.
Can You Finance a Motorcycle, ATV or UTV Vehicle with No Credit? Can You Finance an RV with No Credit?
This is challenging, but it might be worth trying to establish a credit history. In some cases, you might not have enough credit history to establish a credit report, and thus, a credit score. If this is where you find yourself, you still have options.
- Start to establish credit and be patient!
- Have a co-signer on your loan
To establish credit, open a credit card. Use it wisely and pay off you balance each month. Over time, you will build awesome credit. If you are under 21, you must have a co-signer on a loan regardless of your credit.
We know it’s no fun to try to buy one of these magnificent vehicles when your credit is not in tip-top shape. We hope this guide has given you a few new ideas, as well as a roadmap to making your purchase a reality.
Remember, the lower your credit score, the more important it becomes to shop around and make sure you’re getting the best rate a lender can offer you.
The Rollick Buying Experience
When you’re ready to find your perfect vehicle, be sure to check us out at gorollick.com. You can:
- See nationwide inventory, specs, and incentive information
- Get an upfront, transparent price on your desired vehicle
- Receive special offers on both the vehicle, as well as accessories, gear, parts and service
- Shop at one of our Certified Dealers who are committed to providing an exceptional buying experience