When you want to finance a motorcycle, knowing what rates banks offer and identifying which one fits your profile best is essential. So, check here what are the best interest rates for motorcycle financing.
When considering financing, applying for a loan, or any other situations involving your financial life, it is of utmost importance that simulations are performed at banks and companies providing the service.
In addition, all your doubts should be resolved before the contract is signed. Only then will you be sure that you are working with the bank or company that best fits your profile.
For this reason, the Low Interest has made an analysis in five banks, so you can have a preview before financing to buy a motorcycle.
Knowing the interest rate of the various banks that offer motorcycle finance is essential to choosing the one that best fits your profile.
Bank Interest Rates
The amount of the fee may vary depending on the bank in which the money is to be requested, as well as the total amount that will be given. Therefore, it is possible to negotiate with the bank to try to lower the interest rate before signing the contract.
Still, the minimum interest rates charged by banks are:
The interest rate is a percentage that is added to each installment you pay to the bank. That is, when working with interest rate, one must take into consideration that it will be on top of compound interest.
How can the interest rate affect my financing?
Thus, any slight difference in percentage can cause a significant change in the payment you will make to the bank or business with which you borrowed.
Let’s look at a practical example:
Suppose you fund USD 6,000 to buy a motorcycle through the Box. Thus, as the bank offers an interest rate of 1.24% and a repayment term of five years, the amount of each installment will be USD 142.36, and the final financing expense will be USD 8,541.60.
That is, you will be paying USD 2,541.60 of interest. In the end, you will have paid 42.36% more than the original value of the bike.
However, if you fund the same bike, which has an interest rate of 2.25%, and gets a five-year repayment term at the bank, the value of each installment will be USD 183.21, with the total amount of USD 10,992.60.
Thus, you will be paying USD 4,992.60 in interest and, in the end, will have paid 83.21% more than the original value of the bike (almost double the value).
Analyzing the situation, it is clear that 1.01% more interest rate caused an increase of USD 2,451.00 in the total value, when comparing the values of financing.
Therefore, the entire contract has to be read very carefully and all doubts resolved before it is signed. In addition, it is recommended that you check the interest rates at all banks that best fit your profile so as not to be caught off guard with very high interest rates.
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