The roar of your motorbike’s engine is music to your ears. And cruising down the highway makes you feel free as a bird. Riding your motorbike is pure joy, and you want to make sure it stays in your possession. One way to do this is by refinancing your motorbike. You can possibly get a lower interest rate and a reduced monthly payment. Here are 4 steps to take if you’re interested in refinancing.

1. Research Loan Options

Your goal is to find the loan with the most favourable terms. It might take a while, but it’s worth the trouble. It’s possible that your current loan is no longer a good deal. If you feel that way, then there’s no reason why you shouldn’t search for a better loan. Decide on the terms you want, and then look for loans that meet your needs.

You’ll want to compare competitive loan rates. And the model and age of your motorbike matters as well. Some lenders won’t refinance vehicles based on a specific year or model. For example, you might find a lender who won’t refinance any vehicle that’s more than 5-years old. Keep this in mind when searching for a lender.

Determining which loan is best is sometimes confusing. A financial advisor can possibly guide you in the right direction. As for interest rates, the amount varies. A loan might charge as low as 5.51% or as high as 14.19% or more. Generally, you’re likely to get a good interest rate if you have good credit. On the other hand, bad credit can mean a higher interest rate.

If you’re worried about having your application denied, then just relax. Most lenders provide refinancing even when the applicant has bad credit.

2. Decide Which Loan to Choose

So, you’ve decided to refinance your motorbike. But now you’re trying to decide which type of loan is best. You’ll likely have three types of loan from which to choose.

A secured motorbike loan means the loan is secured with collateral. If you fail to meet your payments, then the lender will take ownership and sell the collateral. Items such as a home or car are usually acceptable forms of collateral.

An unsecured motorbike finance loan doesn’t require collateral. The trade-off is a higher interest rate than you’d pay with a secured loan. You’ll also likely have a smaller loan amount, and a higher monthly payment. But if you don’t want to risk losing any collateral, then an unsecured loan is worth considering.

Another option is to use a personal loan to pay-off the motorbike in full. A personal loan can come from a friend, a family member, a bank, an online lender, or a credit union.

3. Review Costs Associated with Refinancing

Some lenders charge an application fee. If you’re not careful, you could end up spending a significant amount on fees. Sure, you need to compare loans, but don’t go overboard.

Never sign for a loan without knowing if there are fees. Ask about late fees, early repayment fees, and other possible charges. Ongoing fees add up. You could find yourself paying more for the new loan because of additional fees. Look up your motorbike finance through our motorbike finance calculator.

4. Tie Up Loose Ends

Make sure that refinancing is in your best interest. Carefully consider why you want the loan, and ask yourself if it’s truly necessary. Also, weigh the pros and cons of the situation. Make the best decision that will allow you to keep cruising on your motorbike.