For buyers seeking finance to purchase a new motorcycle, the Secured Motorbike Loan is by far the most popular choice of loan. For lenders that don’t offer a specific Secured Motorbike Loan, a similar format loan may come under the category of Personal Secured Loans.
While widely used this type of loan may raise some confusion around the meaning of the word ‘secured’ in the title. Loan seekers may be unclear around what security is actually included in a secured loan. Does it relate to safety? Is there risk attached to other options? What exactly is the security in a secured loan? These are just some of the questions that loan applicants may have.
It is essential that loan applicants are fully informed when making decisions around finance. Under consumer law in Australia, licensed credit providers like Jade Bike Loans must adhere to specific practices and steps when arranging consumer finance. To ensure loan applicants are well-informed in regard to their choice of motorcycle loan, this explainer provides information of the security with a Secured Motorbike Loan.
Secured Defined
A Secured Motorbike Loan or any other type of ‘Secured’ loan usually refers to a type of consumer loan. A consumer loan being a loan made for the purchase of goods for private or personal use as opposed to for use in a business. Business loans can also be ‘secured’ but for this explainer we will keep the discussion to consumer or personal loans.
The Secured Bike Loan follows quite a universally-accepted format. Meaning that most secured loans offered by most lenders will have the same if not very similar structure and inclusions.
The reference to ‘secured’ is in relation to the security for the lender. The motorbike or other goods are offered as security by the borrower to the lender against the monies loaned. The security is therefore more for the lender than for the borrower.
Loan security is also known as guarantee. The lender is assured that if the borrower defaults on their repayment commitments they essentially have some level of security to recoup the monies outstanding.
If a borrower does default, meaning not meeting their repayment obligations, there is a process that the lender can follow to resolve the issue. The process can vary from lender to lender and depend on individual approaches.
If a payment is missed, lenders may send a reminder notice. If the loan holder fixes the situation by making the payment, no further action may occur. In some situations, a negative entry may be entered on the loan holder’s credit report and cause a downgrading of the credit rating.
In line with finance industry procedures and individual lender criteria, after a certain number of payments are missed or unpaid, the lender has the right to call the loan ‘in default’. At this point, the lender can proceed to repossess the bike and sell it to recoup the money owed to them.
What the lender would be entitled to at that point would be the outstanding balance of the loan, the interest payable and possibly fees and charges associated with the missed payments and the default. If the lender hands the recovery process over to a third party, more charges may be incurred. These can greatly diminish any financial claim the loan holder may consider they have to the motorcycle.
Being in default with a loan is not a good position for a loan holder. Not only do they risk losing their bike and potentially some of the money already paid, they can be left with a big hit to their credit rating. A poor credit score or rating can stay with an individual for a long time and result in issues when applying for loans and other forms of credit.
Most loans approved to individuals with a good credit rating do not require additional security as well as the motorbike being purchased. But in some instances for some applicants, lenders may require additional property or goods be also offered as guarantee or security against the loan amount.
Security for Borrowers
While the ‘secured’ reference in a Secured Motorbike Loan essentially refers to the guarantee for the lender, Jade Bike Loans does offer features of the loan to provide a level of certainty around the loan. Certainty which some may see as security.
The interest rate on our Secured Motorbike Loans is fixed. This means that it remains at that same percentage for the full loan term. Even when the RBA does increase the official cash rate and lenders follow during that period, the rate on a loan already in place remains unchanged.
The loan term is also fixed and in concert with the fixed interest rate, these calculate out to a fixed monthly repayment. With all elements remaining stable, our customers have certainty over their bike loans moving forward.
Repayments are set up with a direct debit so as long as funds are in that bank account on the due date each month, repayments should not be missed.
Jade Bike Loans also provides security to our customers around the lenders we select. We are accredited with a vast number of highly reputed banks and non-bank lenders.
A Secured Motorbike Loan is the most common form of consumer finance for purchasing new motorbikes and buyers can have confidence that when secured through Jade Bike Loans, their best interests are being taken care of.
For a quote on a Secured Bike Loan contact Jade Bike Loans at 1300 000 003
DISCLAIMER: IN REGARD TO ANY ERRORS OR MISREPRESENTATIONS IN THIS MATERIAL, NO LIABILITY IS ACCEPTED. THE DETAILS, CONTENT AND DATA ARE PRESENTED PURELY FOR GENERAL INFORMATIONAL PURPOSES FOR MOTORBIKE BUYERS AND THOSE SEEKING MOTORCYCLE LOANS. THIS IS NOT INTENDED AS THE SOLE SOURCE OF INFORMATION FOR FINANCIAL DECISIONS. IF SPECIFIC ADVICE IS REQUIRED AROUND FINANCIAL DECISIONS, READERS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
