Motorcycle
Loan Repayment Terms
The
"Term" of your motorcycle loan is the length
of time over which you pay back the loan along with
the attached interest charges. Online motorcycle loan
repayment terms typically fall between 30 months and
60 months and are loosely divided into two categories.
By looking at two trusted loan providers below we can
see that they follow a similar pattern.
Capital
One
splits their repayment terms:
- Term
1: 30 - 36 months (lower interest rate)
- Term
2:
37 - 60 months (higher interest rate)
While,
E-Loan
splits their repayment terms:
- Term
1: 36 - 47 months (lower interest rate)
- Term
2: 48 - 60 months (higher interest rate)
The
difference between the two terms is the interest rate
that is charged. The second term which is the longer
has a higher interest rate which depending on the specifics
of your loan application will be at least 0.60% and
0.80% higher than the shorter term repayment schedule.
Because your repayment is spread out over a longer period
your monthly repayment figure will be lower but the
total amount you repay back will be higher.
The
basic rule then - If you agree to pay back your loan
quicker you will be charged less interest. If you opt
for a longer repayment term then you will be charged
more interest.
Differences
between loan providers here are subtle but do exist.
For example, taking our two recommeded loan providers
from above - Capital One and E-Loan, we can see that
their interest rates switch from the lower to higher
charge at different times:
- With
Capital One you get charged a higher interest rate
once you choose a repayment term that is over 37 months.
- In
contrast, the higher interest rate does not become
active at E-Loan until you reach a 48 month repayment
schedule.
Therefore,
if you were opting for a mid-length repayment term between
36 and 48 months we would recommend that you go with
E-Loan
on the basis that you can still take advantage of their
lower interest rate within that period.
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