How to Refinance a Motorcyle

You may wish to refinance a motorcycle loan to take advantage of lower interest rates, secure a lower monthly payment, or both. The process for refinancing a motorcycle is nearly identical to the process you used to obtain your original financing, with some slight differences.

Discover How Much Money You Need

Before you can refinance, you'll need to identify the amount of money your new loan should be for. Your current motorcycle loan will tell you how much you owe on the debt. You will need to borrow at least this much to pay off the loan, though you may need more to cover any fees associated with the new loan.

Do a Little Comparison Shopping

Contact lenders about current motorcycle loan rates, since they may have gone up or down from what they were when you got your original loan. Motorcycle loan interest rates also differ depending on the lender offering the loan, the amount of the loan, your credit score, and other factors. Find the rates offered by several lenders and focus on those that offer the lowest current rates.

Appraise the Vehicle

Your lender may require an appraisal or not, but you should contact a local appraiser to determine the motorcycle's fair market value. Your lender will likely hire an appraiser who can do the job. If the lender wants you to hire the appraiser, most lenders can suggest an appraiser who is qualified.

Obtain and Fill Out the Loan Application

The lender may opt to mail you a paper application, or simply direct you to an application that can be filled out online. Be sure to include all the required information and ask the lender's loan officer about any terms or conditions that you don't understand. Always read the loan application and terms carefully. Pay special attention to any fees or added costs that are not included in the loan's interest terms. It is also important to note that anytime you apply for a loan, the lender will inspect your credit history. This can briefly lower your credit score, so only apply for loan if you are sure you want to refinance.

Pay Off the Old Loan

Once your loan is approved, pay the old loan balance with the funds you obtained from the new loan. You'll now need to make regular payments on the new loan.

Change the Vehicle's Title

Once you refinance, you'll need to change the status of your motorcycle title to indicate the old lien is released and the new lien is present. In most cases, the new lender will take care of this. If not, contact your state's motor vehicle office for information on how to accomplish this in your state.

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