As exciting as having a motorcycle can be, it can also be a costly hobby to have. Entry-level models can cost anywhere from $5,000 to $10,000, while higher-end bikes sell for tens of thousands of dollars.
Since most people don’t have that kind of cash on hand, they’ll have to rely on financing to cover the expense. Here’s how consumers can effortlessly manage their motorcycle loans and ride worry-free.
Budget for Monthly Payments
Whether it’s a motorcycle loan or any expense, borrowers need to make sure these payments are within their means. This can be done by taking the time to prepare a budget before they calculate a personal loan.
Simply put, a budget is a plan for how someone will spend their income. A good way for a person to structure their budget is to make a list of all the necessary payments and ensure they have enough income to cover them. If not, then they should take a closer look at their finances and try to trim the fat.
Budgets help ensure that the most important bills are prioritized and properly planned for. Consumers can even download budgeting apps that track their purchases, so they’ll always have a real-time snapshot of their financial situation.
Put the Motorcycle Loan on Autopay
One of the simplest things anyone can do to ensure every payment is on time and never gets missed is to put it on auto-pay. Short for “automatic payments,” auto-pay pre-authorizes the lender to withdraw funds from the borrower’s bank account for the amount due each month. For consumers, this is a worry-free way to handle any bill because it takes all manual interactions like writing a check and dropping it in the mail out of the equation.
Ensure There’s More Than Enough
No one can predict when a financial emergency will strike, and funds will get tight. For people who tend to live paycheck to paycheck, another good idea is to spend some time building up their financial reserves. This can act like a safety net, ensuring that funding is always available for automatic payments.
Make Early Payments
When a borrower comes into some extra money, such as a raise at work or income tax refund, a good idea would be to put these additional funds towards the principal. That’s the borrowed portion of the loan (before interest).
The more a person can pay down their principal ahead of schedule, the more years it knocks off the back end of the loan. Additionally, they’ll also ultimately pay less interest over the life of the loan.
Refinance the Loan
If the payments become too heavy or the borrower can pay down a significant amount of the principal, another strategy they can use is to refinance their loan. Refinancing allows a borrower to change their loan terms, such as the interest rate and the number of payments. Typically, when payments are extended, it results in lower and more manageable payments.
The Bottom Line
Maintaining a motorcycle loan starts with creating a budget, setting up automatic payments, and making sure there are always funds available. Borrowers can also help themselves by paying the principal down early and refinancing their loans when the terms are more favorable.
About OneMain Financial
OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.