I found a used KTM 690 for $8000 bucks on the 2014 model. I want to buy it, but being young and dumb and wanting to build a loan credit history has got me thinking that I should take out a loan to buy it.

Does anyone know how one goes about obtaining a loan for the private purchase of a motorcycle? I do not care if it has a lein on it. I want to borrow about $5k and pay it back in 24 months depending on the interest rate.

I know its easy to buy a new bike from a dealer, but I don't like buying new if I can help it. I have a 700+ credit rating but all my credit history is from my credit cards. I have never had auto loan before.

Any idea if this is a good idea? im eating my own words as I said on this forum that I would never finance a bike ever, but I have the money set aside to pay off the loan in one shot, id just like to build a credit history for a loan.

Go to a bank, get a loan.  Simple as that.

if the title is clean and it's insurable, most will do it.

Also check with the lender what insurance coverage they require specifically. They may require a higher level than you currently have or plan to have, adding to the expense.

If you get a good rate, the loan will probably cost you $150-$200 over 2 years. If there are no penalties for early payoff (be sure to check this), you can always pay it off in a few months. It won't affect credit rating if it's paid off early, just that the loan is in good standing and/or paid off.

You may not want to tell them what you are going to use the money for.

I had a bank loan officer tell me once that vehicle loans are evaluated and given using different criteria. Borrowing money to buy rims for a used car ( according to him) was easier than borrowing money to buy the used car.

Buying a  used bike may be a red flag.

I would also research credit building tips with regards to how you plan to pay off the loan.

Buy the bike cash.  Build your credit rating by using your credit cards and paying them off.  Pay on time?  0% interest.

If your insurance is through State Farm, ask them about a loan. They're pretty good to work with and have competitive rates. Might not even have to have insurance through them...just locate a local office that also does loans. Otherwise just shop around banks to get the best rates. Rates for used bikes are generally higher.

That said, +1 to what Howie said if you can pay cash.

Some banks won't do motorcycle loans. My credit union did, at a not that great interest rate. But knowing i was going to pay it off within a year interest wasn't all that much. Credit companies look for non-revolving door credit to determine your score also(ie loans). So if you don't mind paying the interest and the fees at the beginning, go for it.

Just get an unsecured personal loan.  The term you want is short so the higher interest on such a loan is negligible. As stated, ask about pre payment penalties but most don't have such. 

Quote from: howie on January 08, 2015, 09:03:13 PM
Buy the bike cash.  Build your credit rating by using your credit cards and paying them off.  Pay on time?  0% interest.

Its my understanding that there is a difference between a credit card credit history and a  Loan history. Ive had a credit card since 16 or 17, i cant remember, so i have a pretty long history for credit card use.

Quote from: ducatiz on January 08, 2015, 07:36:55 PM
Go to a bank, get a loan.  Simple as that.

if the title is clean and it's insurable, most will do it.

Should i do it through any bank? or my personal bank? I dont want to shop around too much. I hear that too many inquiries on your credit history is a bad thing.

Quote from: muskrat on January 09, 2015, 05:53:23 AM
Just get an unsecured personal loan.  The term you want is short so the higher interest on such a loan is negligible. As stated, ask about pre payment penalties but most don't have such. 

From talking to some local shops and discussing my situation withou submitting a loan application for a new bike, i was looking at a 5-7% rate for a simple interest loan. Ofcourse this is a secured loan. if its unsecured, im guessing im looking at a 10% rate. or about $1500 for a 10k bike over 2 years. That ehh. i rather just buy out right.

one benefit of borrowing money to buy the KTM is the reduce strain on my pocket. It would essentially wipe me clean of all my savings and id be living paycheck to paycheck for a few months. Not the worst thing in the world since i didnt plan on doing much this winter anyway.

BTW: that $8000 KTM i spoke of in the original post got sold already. that was QUICK.

Definitely shop around a few banks since each will have different policies related to personal loans, motorcycles, etc.  And yes, too many credit checks in a short period can affect your score, but not to any degree you need to worry about (a 700 isn't going to fall to a 600 because someone is shopping loans).  If you are worried, remember that you are allowed one free credit check every 12 months, so print that and take it with you to banks for your initial discussion.  Then, once you pick one to go with, they will run a credit check all their own.