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Monday, January 21, 2008

MOTORCYCLE LENDERS WHERE ARE THE BEST ONES FOR THE NEW YEAR by Jay Fran

In 2007, the motorcycle financing market faced some pressure mainly due to banks tightening as a result of the sub-prime mortgage crisis. But heading into 2008 will things get better? Not likely, if you look at the future of mortgage foreclosures. The first quarter of 2008 looks to be worse which will squeeze banks and make the motorcycle loan market tougher.
If you are a motorcycle buyer in the New Year expect the ease of motorcycle financing to not be so easy anymore. There will be lenders still offering motorcycle loans but these loans will be much more restrictive than in the past. Expect higher interest rates and if you have had credit issues your loan may be a little harder to obtain. Therefore, it is important to get your credit cleaned up if you have had any issues in the past. Also try to minimize the outstanding debt you have showing on your credit report. This will help you when bank look at your credit report and determine if you are a good or bad credit risk.
In 2008, Fair Isaac will roll out a new credit scoring model that will help you if you have been recently current on your loans and credit card payment. However, you should not expect this new credit card scoring model to be used with motorcycle loans anytime in the near future. With motorcycle and auto loans banks normally take some time before they adjust their scoring model to the new credit scoring model. In addition banks are having tons of trouble with funding so before they implement any changes in credit scoring models they will address their funding issues. The bottom line is that in 2008 it will be more difficult to get motorcycle loans.
Online motorcycle loans may fair better than traditional banks. The reason being is that many of the online lenders do not have the substantial overhead that the local and big banks have. So they are more able to adjust to the changing circumstances. Also online motorcycle lenders did not face the huge exposure in the mortgage market because online motorcycle lenders are traditionally more specialized.
If you are declined for a motorcycle loan do not get discouraged, the motorcycle lenders in 2008 will likely vary quite a bit in their credit scoring. Many motorcycle buyers find themselves frustrated after a decline and forgo their dream of owing a motorcycle. Do not let this happen to you. It is not personal; the banks are a mess because the mortgage crises so if you get declined just try a new bank. Persistence will pay off and get the bike of your dreams.
With internet based motorcycle loans you will find that it is quick to submit an application and get a response. Also there is good communication from online motorcycle lenders so your service will be high quality. When you are approved for motorcycle financing online your funds arrive fast and you can get to the dealer quickly to pick up your bike.
You may find in 2008 that motorcycle lenders also force you to put money down for a motorcycle loan where in the past they were more willing to give you a zero down payment motorcycle loan. This is simply a reflection that the banks are way under funded and need to be very wise about their loans.
Losses to banks in general are higher this year versus last so banks may require insurance. Be prepared to get motorcycle insurance if you finance in the New Year and also look to make sure you can afford your bike and insurance. Late payments will result in higher repossession and lenders look to repo bikes faster in the New Year to off set losses. In general, a newer bike yields more used to lenders than older bikes.
If you want to ensure you get financing in the New Year, make sure you let the lender know you have money down, insurance, and clean up your credit. These 3 things can help the most. But this does not mean that if you have bad credit in the past you can not be approved, you will simply have to work harder.

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