Buying a brand-new motorcycle is a huge investment. For many buyers, this means dipping into their savings. To avoid that, they look for loans to finance their purchase; unfortunately, they require a down payment that is usually 10–20 percent of the total loan amount. This amount is quite high, or even unaffordable, for those with bad credit. In such situations, they can look for ways to buy a motorcycle without a down payment.

1. Get a secured loan
Banks and financial institutions offer secured loans, but the catch is that they require one to put up one of their assets as collateral for the lender. This is how the bank or institution secures the loan. Although it may seem like a lot of hassle, the good news is that there is no down payment involved while applying for such secured loans. Besides, the collateral helps to lower the risk of lending the money to the person who has applied for the loan. Thus, if the person is not able to pay back their loan along with the interest accumulated, the bank takes possession of the collateral to recuperate the lost loan. With secured loans, a person puts up the motorcycle they will buy as collateral. If the loan is not repaid, the bank or lender will take possession of the new motorcycle.

2. Apply for a personal loan
When purchasing a motorcycle, opting for a personal loan can be a good idea if one does not want to make any down payments. Unlike conventional loans from banks and financial institutions, these loans do not require one to pay any initial amount before taking out the loan. Additionally, such loans do not demand any collateral. One can apply for these loans through their bank if they already have an account there or through financial institutions offering better interest rates. Certain eligibility criteria must be met, whether one is applying to a bank or a private lending institution. These usually include being over 18 years old, being a permanent resident of the country, having an active checking account, and having a consistent income. Additionally, one can also explore online lenders, as they often approve loans quickly.

3. Look for manufacturer financing
One can opt for manufacturer financing instead of applying for loans through third-party lenders or banks. Several top motorcycle manufacturers offer financing programs to their customers. These programs do not require one to make any down payments. Getting finance directly from the manufacturer also gives much flexibility for loan terms. For instance, some manufacturers offer customers the option to determine the monthly amount they can pay.

4. Apply for credit union loans
When purchasing a motorcycle without a down payment, loans from credit unions are another great option to consider. Credit unions do not require any down payments and have quite low interest rates compared to traditional lenders and banks. But one must be a union member to apply for a credit union loan. Fortunately, joining a credit union is not a difficult process. Every union has its own set of eligibility criteria that one must meet to become a member. Once a person completes the registration process and becomes a member, they can apply for a motorcycle loan.

5. Make use of credit cards
One can also use their credit cards to buy a motorcycle without needing to make a down payment. Because most credit cards have spending limits, it is not always possible for one to pay the entire cost of the motorcycle at once. So, one has to make the payment every month. The monthly payments will have to be made during every month’s billing cycle. That said, working up a deal with the motorcycle manufacturer or dealer is important to make this work. The deal should involve a fixed tenure, through which the monthly payments will be made. For example, the dealer and the buyer agree to have a payment tenure of 30 months. So, the buyer will pay a fixed amount with their credit card every month for the next 30 months.

6. Trade in an old car or motorcycle
Exchanging one’s old vehicle for a new motorcycle is a good way to eliminate the need to pay a down payment. Besides, if the older car or motorcycle is in fairly good condition, the trade-in value will be much higher, so one will have to pay only a small amount out of pocket.

Once the decision to apply for a loan has been made, individuals should check their credit score, compare different lenders, determine which lender best suits their needs, and get the paperwork ready before signing the dotted line.