The 5 Best Motorcycle Loans for 2020

Find the best rates and terms for your new bike

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While motorcycles tend to be significantly cheaper than new cars—the average new car cost $37,876 in 2020—motorcycles are still a significant investment. Lightly used motorcycles with under 10,000 miles on them typically sell for $3,000 to $6,000. But if you’re looking for a brand-new bike from a major brand like Harley-Davidson, you should expect to spend much more. The average cost of a new 2020 Harley-Davidson is $22,225. 

If you don’t have the money saved to pay in cash or don’t want to take so much money out of the bank at once, motorcycle loans are another option. Whether you want to buy a used or new bike, there are several motorcycle loan lenders that can help you finance your next purchase. 

We researched 18 different motorcycle and personal loan lenders to identify the best financing options. Each company was evaluated for its loan amounts, interest rates, funding speed, and credit score requirements. Here are our top picks.

The 5 Best Motorcycle Loans for 2020

LightStream: Best Overall

Lightstream

Lightstream

LightStream is our pick as the best overall motorcycle loan lender because it offers unsecured loans with low interest rates and allows you to borrow between $5,000 and $100,000. Depending on how much you borrow, you can have up to seven years to repay your loan, among the longest terms offered by any lender.

Pros
  • Receive your funding the same day you apply

  • 0.50% interest rate discount if you sign up for automatic payments

  • No down payment required

Cons
  • Good to excellent credit required

  • The minimum loan amount is $5,000

  • No loan prequalification tool available

LightStream is a division of SunTrust Bank, now known as Truist. With LightStream, you can apply for loans entirely online and get your money deposited into your bank account the same day you’re approved. 

LightStream’s motorcycle loans are unsecured, so you don’t have to worry about collateral or adding the lender as a lienholder. It also doesn’t require any down payment, so you can apply for the full amount of the motorcycle’s cost. 

The lender’s interest rates are the lowest of all the unsecured lenders we evaluated, with rates ranging from 4.29% to 11.89% (including a 0.50% autopay discount). 

LightStream’s repayment terms are dependent on your loan amount. Borrowers who take out less than $25,000 can only opt for loan terms of two to six years. Borrowers who take out more than $25,000 are eligible for terms of seven years. 

The minimum loan amount available from LightStream is $5,000. If you’re buying a used motorcycle, that might be more than you need, causing you to take out unnecessary debt. LightStream tends to be best for those who want to buy a more expensive motorcycle. 

To qualify for a loan, you will need to have good to excellent credit. According to Equifax, that means your score should be between 670 and 850. If your credit score is below that range, you’ll need to work with another lender. 

LightStream does not have a loan prequalification tool, so you’ll have to submit a loan application and undergo a hard credit inquiry to find out what interest rates you can get and if you’re approved for a loan. 

Despite its strict borrower requirements, LightStream has the edge over other lenders because of its low interest rates, multiple repayment options, and quick loan funding. When you take out a loan from LightStream, you can get your money that same day and close the deal with the bike’s seller.

Harley-Davidson: Best Manufacturer Financing

Harley Davidson

 Harley Davidson

Harley-Davidson leads the pack when it comes to manufacturer financing. Offering loans on new and used models, you can qualify for low-interest loans with repayment terms as long as seven years. And, Harley-Davidson will also offer you financing if you’re buying a Harley from a private party.

Pros
  • Gear and accessories can be added to loan cost

  • Loans available for new and used models

  • Low-interest loans with no down payment available

Cons
  • Can only be used on Harley-Davidson models

  • Loans are secured

  • Financing offers not available on all models

Harley-Davidson is one of the best-known motorcycle manufacturers in the world. In 2019, it sold over 125,000 bikes in the United States, more than double the amount sold by manufacturers like Yamaha and BMW.   

With its long-standing reputation, Harley-Davidson motorcycles tend to be more expensive than some of its competitors, but it also has its own financing options to help make the price more manageable, and we chose Harley-Davidson as best for manufacturer financing in our review.

With Harley-Davidson Financial Services, you can finance a new or used bike if you have fair to excellent credit. Harley-Davidson has several financing offers available, including $0 down payment options with low interest rates and repayment terms as long as seven years. As of 2020, Harley-Davidson has loans with rates as low as 3.49%. 

When you purchase your bike, you can also add gear and services, such as an extended Harley-Davidson service plan, to the amount you finance. 

If you want to buy a Harley from a private party, Harley-Davidson will help facilitate the transaction. You can secure financing from Harley-Davidson Financial Services, and then meet the seller at a local Harley dealership. The dealer will help you complete the sale and transfer ownership of the bike. 

When buying a bike with Harley-Davidson financing, keep in mind that the loan is secured. If you fall behind on your payments, the lender can take back the motorcycle as security. You can only use the loan to buy Harley-Davidson motorcycles, and the lowest advertised rates and terms are only available on select models. 

Harley-Davidson edges out its competitors as the best manufacturer financing option because it allows you to get a loan for both new and used motorcycles. And, you can wrap in extra costs, like accessories or service plans, into your loan, so you have just one easy monthly payment.

Digital Federal Credit Union: Best Motorcycle Loan Rates

Digital Federal Credit Union

 Digital Federal Credit Union

For secured motorcycle loans, Digital Federal Credit Union (DCU) is our pick for the best motorcycle loan rates. It offers low interest rates and allows you to borrow up to 125% of the motorcycle’s purchase price, allowing you to take out extra money to cover the cost of registration or service protection plans.

Pros
  • Low interest rates

  • You can borrow up to 125% of the motorcycle’s purchase price

  • You can use the loan to purchase new or used bikes

Cons
  • Must be a credit union member to be eligible for a loan

  • Higher interest rates for off-road motorcycles

  • Longest loan term is five years

DCU is a credit union, a non-profit financial cooperative owned by its members, and has over 850,000 members nationwide. 

DCU offers secured motorcycle loans you can use to purchase new or used bikes. While other companies charge higher rates for used motorcycles, DCU’s interest rates are the same for new and used models. 

For street motorcycles, rates range from 3.50% to 4.25%; its lowest advertised rates include 0.50% discount for automatic payments and making payments from a DCU checking account. Off-road motorcycles have higher interest rates, with rates ranging from 7.85% to 8.35%. Both types of bikes are eligible for loan terms of three to five years. 

With DCU, you can borrow up to 125% of the motorcycle’s purchase price. For example, if you’re buying a bike listed at $10,000, you can borrow up to $12,500 through DCU. You can use the extra money to cover registration costs, to purchase an extended warranty, or get a service protection plan for your new bike. 

To qualify for a loan, you’ll need to have good to excellent credit and you also have to be a DCU member. You are eligible for membership if you meet one of the following criteria: 

  • You have a family member, such as a spouse, parent, grandparent, or sibling, who is a DCU member
  • You work for an eligible employer or retired from an eligible employer
  • You belong to a partner non-profit organization 
  • You live, work, attend church, or go to school in one of DCU's service communities

While not everyone will be eligible for DCU membership or DCU’s motorcycle loans, DCU is our selection for the best motorcycle loan rates because of its affordably low terms and the ability to borrow up to 125% of the bike’s purchase price.

Wells Fargo: Best Personal Loan

Wells Fargo

 Wells Fargo

For those who want an unsecured loan option, Wells Fargo is our pick for the best personal loan lender due to its available loan amounts, competitive rates, and rapid funding.

Pros
  • Borrow $3,000 to $100,000 without collateral

  • No origination or application fees

  • Loan terms between one and seven years

Cons
  • You must be an existing Wells Fargo customer to qualify for lowest-advertised rates

  • You may have to apply in person

  • Good to excellent credit required

Wells Fargo allows you to borrow up to $100,000 without any form of collateral. Wells Fargo loans have no application or origination fees, and there is no prepayment penalty. 

If you are a Wells Fargo customer and have a checking or savings account with the bank, you can qualify for its lowest rates. Rates range from 5.99% to 24.49% with the relationship discount, and Wells Fargo has loan terms ranging from one to seven years. 

You need to have good to excellent credit and proof of income to qualify for a loan. With Wells Fargo, you can apply for a loan online or over the phone if you have an existing Wells Fargo bank account. If you aren’t currently a Wells Fargo customer, you can still apply for a loan, but you’ll have to apply in person at a Wells Fargo branch. If approved, your loan will be disbursed in as little as one business day. 

With its interest rates and quick loan disbursal, Wells Fargo beats out the competition for best personal loan. You can quickly get the money you need to buy your motorcycle without having to use your new bike to secure the loan.

Avant: Best for Bad Credit

Avant

 Avant

If you have poor credit, getting a loan can be difficult. That’s why Avant—which lends to customers with scores as low as 600—is our choice for the best loan for borrowers with bad credit.

Pros
  • Borrowers with subprime credit can qualify for a loan

  • You can get up to $35,000 within one business day

  • You can check your eligibility online without affecting your credit score

Cons
  • Double-digit interest rates

  • Administration fee applies

  • Maximum loan term of five years

If you have subprime credit, meaning a credit score between 580 and 669, finding a lender can be challenging. 

Avant is a lender that specializes in unsecured loans for people with fair or even poor credit. Most borrowers who are approved for a loan through Avant have credit scores between 600 and 700, so you are more likely to qualify for a loan from Avant than from other lenders. 

Avant does have a prequalification tool, so you can check your loan eligibility without damaging your credit score. If you decide to proceed with the loan application, you can apply online and qualify for a loan between $2,000 and $35,000. If approved, your loan could be disbursed in as little as one day. 

Because Avant caters to people with less-than-perfect credit, it has higher interest rates than some other personal loan lenders, with rates ranging from 9.95% to 35.99%. It has fewer loan term options than other lenders, with a maximum loan length of just five years. 

A notable drawback is that Avant charges administration fees. The fee is 4.75% and is deducted from your loan amount before it is disbursed. For example, if you applied for a $5,000 loan and had a 4.75% administrative fee, $237.50 would be deducted from the loan total. The amount that Avant would issue to your bank account would be just $4,762.50, so make sure you account for that fee when selecting your desired loan amount. 

While Avant does charge added fees and has potentially high interest rates, it’s the best choice for people with poor credit because of its lower credit score requirements and rapid loan funding.

What Kind of Loan Do You Get for a Motorcycle?

Motorcycle loans are different from car loans, with different interest rates and repayment terms. When buying a new or used motorcycle, there are three different financing options: 

  • Manufacturer financing: Manufacturer financing is available from some motorcycle companies, such as Harley-Davidson or BMW. Instead of financing through a third-party bank or lender, you get financing directly from the manufacturer. Depending on the company, you may be able to secure financing for new and used bikes. Manufacturer loans are secured by your bike, meaning the maker can take your motorcycle if you fall behind on your payments. 
  • Motorcycle loans: Motorcycle loans are specialty loans offered by some banks, credit unions, and online lenders. Depending on the lender, they can be secured or unsecured, but unsecured loans tend to have higher interest rates than secured ones. Some motorcycle loans have restrictions on how the money can be used, such as only allowing you to purchase a new motorcycle rather than a used one. 
  • Personal loan: Personal loans are unsecured loans you take out from banks, credit unions, and other financial institutions. They can be used for any major purchase, including home renovations or buying a new or used motorcycle. Personal loans allow you to get money quickly—sometimes within one day—but you’ll pay a higher interest rate than you would with a secured loan. 

What Is a Good Credit Score for a Motorcycle Loan?

When you apply for a loan to purchase a motorcycle, lenders will evaluate your application based on your income, credit history, and credit score. Your credit score plays an important role in whether you get approved and what interest rate the lender will give you. 

You will typically need good to excellent credit to qualify for a motorcycle loan with competitive rates. According to Equifax, one of the three major credit bureaus, good credit scores range between 670 and 850. However, the lowest-advertised interest rates and most favorable loan terms will be reserved for people with very good to excellent credit. 

  • 800 to 850: Excellent credit
  • 740 to 799: Very good credit
  • 670 to 739: Good credit
  • 580 to 669: Fair credit
  • 300 to 579: Poor credit

Some personal loan lenders will work with people with scores below 670. However, you’ll typically pay a higher interest rate than someone with a higher credit score. 

Can I Get a Loan for a Used Motorcycle?

You can get loans for new or used motorcycles. Some manufacturers only offer financing for new models. But others, like Harley-Davidson, have special financing for used motorcycles, too. 

If you aren’t eligible for manufacturer financing or want to compare rates from more lenders, you can typically find motorcycle loans and personal loans for used bikes. Used bike loans tend to be unsecured. As a result, some lenders charge higher interest rates and have lower loan maximums. 

How We Chose the Best Motorcycle Loans

To find the best motorcycle loans, we researched 18 top lenders, including manufacturer financing options, motorcycle loans, and personal loans. To narrow down the list and identify the top choices, we looked at lenders’ interest rates, available loan amounts, repayment terms, down payment requirements, and necessary credit scores. Our selections for the best motorcycle lenders offered the lowest interest rates and had loan terms of five years or more, often on both new and used bikes.

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Article Sources

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