For many Singaporeans, motorcycles are the most convenient mode of transportation. Not only is it significantly more affordable compared to cars, but it’s also more convenient to maintain. That said, not everyone can pay for a motorcycle upfront – either you still haven’t saved up enough money or just don’t want to touch your savings.
This is where motorcycle loans in Singapore come in.
Are you wondering how to get a motorcycle loan in Singapore? You’ve come to the right place. In this guide, we’ll walk you through the steps to secure a motorcycle loan.
What Is A Motorcycle Loan In Singapore?
Before you learn how to get a motorcycle loan, you first need to know what it is. A motorcycle loan is a type of loan that is specifically designed to help individuals purchase a brand-new or used motorcycle.
The way it works is similar to a car loan where the loan provider gives you the necessary funds to purchase the motorcycle. Borrowers then repay the loan over a set period of time with interest.
How To Get A Motorcycle Loan
To help you secure a motorcycle loan, understanding the different options available to you is key. We’ve rounded up the top ways to secure financing.
Motorbike loans from banks
One of the top options when it comes to how to get a motorcycle loan is through banks. A number of banks offer competitive loan packages to help their customers buy motorcycles.
Keep in mind that there’s a chance your specific bank may not offer this package due to the high risk of injury or death.
To apply for a motorbike loan from a bank, you will need to meet certain eligibility criteria and provide the necessary documents. Most banks will require you to be a Singapore citizen or permanent resident, at least 21 years old, and have a stable source of income. They will also consider your credit history and debt-to-income ratio before approving the loan.
Personal loan
When considering how to get a motorcycle loan, it’s not uncommon for individuals to opt for a personal loan to finance their purchase. These loans are incredibly versatile so you have the freedom to use the funds for any purpose, including buying a motorcycle. To apply for a personal loan, you can approach various financial institutions such as banks or licensed money lenders. Most personal loans do not require collateral.
In-house financing from dealerships
Instead of going straight to banks, financial institutions, or moneylenders, you may also approach your motorcycle retailer or dealership for in-house financing.
Many motorcycle dealerships offer their own financing options to make it more convenient for customers to purchase a motorcycle. This way of how to get a motorcycle loan in Singapore is less restrictive so that even individuals with less-than-perfect credit scores can still have a chance at securing financing.
Dealership loan partners
Most dealerships partner with financial institutions or lenders to provide loan options to their customers. These dealership loan partners work closely with the dealerships to offer competitive effective interest rates and flexible repayment terms. However, this option may be more expensive since dealerships also receive commissions from lenders.
Loan from manufacturers
This choice often benefits motorcycle buyers since the manufacturer’s primary profit comes from selling motorcycles, not from the interest on loans. It’s also worth noting that dealing directly with a manufacturer gives you the opportunity to select the ideal motorcycle at a cheaper price.
That said, only a limited number of manufacturers provide this option. In some locations in Singapore, finding such options might pose a challenge.
Peer-to-Peer lending
Also called P2P lending, this method on how to get a motorcycle loan involves borrowing money directly from individuals or investors through online platforms that connect borrowers and lenders. It’s a decentralised approach to lending that cuts out the traditional financial institutions.
To secure this type of loan, you need to create an account on the P2P lending platform of your choice and complete the application process. The platform will assess your creditworthiness and assign you an interest rate based on their evaluation. If approved, your loan request will be listed on the platform for potential lenders to review and fund.
Tips On How To Get A Motorcycle Loan
To increase your chances of getting a motorcycle loan, we’ve rounded up a few tips you can follow.
Improve your credit score
Even before you apply for a motorcycle loan, take steps to improve your credit score. Pay off any outstanding debts, make all your payments on time, and keep your debt-to-income ratio low. A higher credit score will increase your chances of loan approval and secure better interest rates.
Save for a downpayment
Although it’s possible to secure a motorcycle loan without a downpayment, saving up for one can greatly benefit you in the long run.
A downpayment not only reduces the overall loan amount but also shows loan providers that you are a financially responsible individual that is willing to invest in your purchase.
Compare interest rates
The last thing you want is to end up with a high-interest loan that will leave you struggling to make your monthly payments.
Before committing to any loan option, take the time to compare interest rates from different loan providers. Look for the lowest rate possible since even a small difference can save you a significant amount of money over the course of your loan repayment period. Using a loan calculator can help you estimate the total cost of the loan.
Consider your budget
Take a look at your monthly expenses and income to determine how much you can comfortably afford to allocate towards your motorcycle loan repayment. Take into account other factors such as insurance, maintenance costs, as well as fuel expenses.
Choose a loan amount and repayment term that aligns with your budget to avoid any financial strain in the future.
What’s The Best Option For You?
Now that you know how to get a motorcycle loan, you’re finally one step closer to hitting the road. In many ways, choosing a motorcycle loan option is like selecting the right gear for a thrilling ride. It requires careful consideration and a deep understanding of your own needs and preferences.
When it comes to how to get a motorcycle loan, there is no one-size-fits-all answer. The right choice depends on your individual circumstances, preferences, and financial goals.
If you already have a strong relationship with a bank and meet their eligibility criteria, getting a motorbike loan from this lender can be a viable choice. Banks often offer affordable interest rates and longer repayment terms so you can enjoy lower monthly payments. However, keep in mind that the approval process may be more stringent, and they may require collateral or a good credit score.
On the other hand, explore in-house financing options from dealerships and retailers if you prefer a more streamlined process. This method on how to get a motorcycle loan is easy since you’ll be able to work directly with the company throughout the loan process. It may also be more lenient in terms of credit requirements.
Lastly, taking out a personal loan from a licensed moneylender is a clear winner for those with less-than-perfect credit scores or those who need funds quickly.
Personal loans from moneylenders such as Crawfort do not require collateral, and the application process can be accomplished online in just 8 minutes. This makes it convenient for individuals who are in urgent need of financing for their motorcycle purchase.