Harley live wire electric scaled e1647308875501Selecting the best motorcycle finance

Instead of expecting the next couple of paychecks, some riders cannot wait to get their dream motorcycle and there is nothing wrong about that. Waiting a few months to pass can mean the end of the summer. There is another way – taking a Motorcycle Loan.

Motorcycle Loans in Australia or New Zealand

A motorcycle loan is used to buy a vehicle, regardless of whether it is purchased from a private seller, a dealership, or an auction. In Australia, you can apply for a motorcycle loan with car dealerships, banks, online lenders, or finance brokers. In each case the vehicle is used as collateral on the loan.


How do Motorcycle Loans Work?

You are being lent money to finance the purchase of the motorcycle, and afterward, over fixed terms, repay the amount lent plus interest. Depending on the lending party, terms can be negotiated so that repayments can be set at either weekly, fortnightly, or monthly installments. 

Unsecured Personal Loan

Unsecured Personal Loans can be taken by anyone with a constant paycheck. In this form of lending, there is no need for collateral. Thus, the loan is considered riskier for the lending institution and offers less attractive conditions for the borrower. With unsecured personal loans in the case when the borrower fails to repay, they can be brought to court and sued.  

This type of loan usually comes at a higher interest rate.

Secured Motorcycle Loans (Secured Personal Loan)

In Secured Personal Loans, the purchased vehicle is used as collateral and if the case arises when the borrower is unable to pay the installments, the vehicle is confiscated by the institution. This usually means that the amount lent to the borrower is calculated on the market price of the motorcycle purchased. 

Furthermore, secured loans are far more secure for the lender and allow them to propose lower interest rates.


Criteria/Type of Loan:

Secured Motorcycle Loan

Unsecured Personal Loan

Motorcycle Value



Limit to borrow



Loan security(Collateral)



Interest Rate %

Lower Rate

Higher Rate

Comparison between borrowing options

It is important to note that the fees, interest rate, and the repayment period terms can be negotiated with the different lending institutions.

In Australia, to compare motorcycle loans it is a good idea to get familiar with which lenders can offer you motorcycle financing depending on your financial history. There is a variety of factors that influence the interest rate and the total repayment amount you would get.

Comparing Motorcycle loans is the first step toward choosing the right option and getting the most suitable terms for your circumstances. 

The Factors that might influence the total amount of the loan repayment

  • Upfront fees or ongoing fees through the loan
  • Penalties for early repayment
  • The length(or term) off your motorcycle loan 

Motorcycle Loans can be obtained through: 

  • Motorcycle dealerships 
  • Banks 
  • Vehicle finance brokers 
  • Online financial lending services 

Types of lending parties

Lending institutions offer different terms, evaluate you as a borrower in different ways, and have different approval processes. There are some lending parties that offer lower fees but take longer to approve your loan, others demand higher interest rates but can finance you on the same day. 

There is a variety of options, and it is best to make an educated decision in choosing between dealerships, banks, online lenders, or finance brokers

The most important aspects to consider before choosing a lending institution to borrow from are fees and charges, the time frame in which you are planning to use the vehicle. It would be a waste to keep paying for a motorcycle that you no longer use.


Banks are one of the most common sources of car and motorcycle financing. Regarding the financial history of the borrower, almost everyone has a previously established relationship with a bank. Investments accounts, Saving accounts, and mortgage all count and can help the individual’s loan application to get approval quickly. 

Pros of Bank Financing:

  • Banks might offer more flexible terms and conditions, in reference to your previous financial history or relationship with them
  • More often than other institutions allow borrowers to repay their debt without penalties
  • Offer the option to extend repayment terms, in order to reduce the monthly repayment amount

Cons of Bank Financing:

  • Have a slower, more thorough application process, especially in cases where the borrower has no previous banking history with them.

Vehicle Finance brokers

Vehicle finance brokers specialize in working with a large pool of car/motorcycle finance providers. Brokers offer the advantage of comparing a range of financial products from different institutions.

Pros of Vehicle Finance brokers:

  • Guide the borrower through the process from the start with advice.
  • Specifically, point to the most suitable financing for the borrower’s needs.
  • Are easier to get approval from
  • Quick and reliable

Cons of Vehicle Finance brokers:

  • Have fees that you need to pay for their advice and services

Car/Motorcycle Dealerships

Car dealerships offer unparalleled convenience since they often provide the option to turn in an older vehicle in exchange for a discount on the new one you are about to purchase. Their main benefit is the comfort of having to complete one transaction instead of two when selling the old motorcycle and purchasing the new one.

Car/Motorcycle Dealership Pros:

  • Provide a high level of convenience, in the case you want to sell an old vehicle and get a new one, they make that possible in one transaction.
  • Provide discounts based on the market value of your old motorcycle.

Car/Motorcycle Dealership Cons:

  • Have higher fees and charges.
  • The repayment amount is higher in total over the course of the term.
  • They often have commissions attached.

Pros and Cons summarized in a table:

Lending Institution:




Lower overall cost, negotiable terms, flexible

Might take more time to approve in some cases

Vehicle Finance Brokers

Advice on getting the most suitable deal

Small broker fee involved

Car/Motorcycle dealerships

Convenient, one transaction

Higher overall amount to be repaid

Other Types of Motorcycle Loans in Australia

In Australia, aside from the traditional lending institutions to choose from, there are a variety of other finance options available. These options depend on whether you are planning to use the motorcycle for personal or business uses.

Chattel Mortgage

In Australia, Chattel Mortgage can be used to finance a motorcycle or a scooter purchase for business uses. It works in a very similar way to a standard loan. The purchased vehicle is still considered as a security collateral for the deal.

Novated Lease

Novated leases are a very tax-effective way for employees to purchase vehicles. The main difference is that the monthly repayments are directly debited from the pre-tax salary of the borrower before they receive it.

Motorcycle Lease

A car lease is a financial service in which the lender purchases the motorcycle or car and rents it out to the borrower for a certain period of time.

Frequently asked questions about Motorcycle Loans

Can extra repayments or lumps sum be made to personal loans?

Yes, most lending institutions allow the borrower to make extra repayments or lump sums.

In some cases, there might be additional charges involved, thus it is always a good idea to consult with the lending party beforehand.

Can the repaying of the personal loan early lead to extra costs?

Yes. Paying off personal loans early often leads to an early repayment fee. In most cases that fee varies in a range of $0 up to $800, depending on the terms of the agreement. An average amount for early repayment costs is a rough estimation of $150.

In what way do I pay the loan repayments?

The most common practice is to store funds in a nominated bank account. In case you have enough savings present the money will automatically be deducted each month to cover the cost of the repayment. Make sure you discuss the terms of paying before signing an agreement.


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