As you rip down Canada's scenic highways, freedom is the only thing on your mind. It's just you, your motorcycle, and the open road. Achieving this dream might seem distant, especially when considering the financial implications, but when considering a motorcycle loan to make it happen - there is nothing more important than ensuring that your loan is open-ended. Let's explain ...
Understanding Open-Ended Loans
Before we delve into why an open-ended loan is beneficial, it’s essential to understand what exactly they are. While we use the term "open-ended" in this blog as it is commonly understand, what people are truly implying is that the loan is open to extra payments. With that in mind, we'll continue to use the term "open-ended" out of simplicity, but keep in mind a true open-ended loan works like a line of credit, while most motorcycle financing deals are simple asset-protected loans.
Why Are Open-Ended Motorcycle Loans Important?
- Flexibility in Repayment: The most important factor is that an open-ended arrangement allows you to repay the loan at your pace in addition to your regular payment. This means significant interest can be saved over the course of your term.
- Lowering Your Interest Rates: Open-ended loans leave the door open for future refinancing possibilities through a different lender.
- Transfer of Ownership: With a closed or restricted loan, you may not be able to sell the ride that you're financing without transferring the loan itself. This would mean that the buyer would have to be willing to qualify and take over your payments.
Where to Get an Open-Ended Motorcycle Loan in Canada
- Major Canadian Banks: If you're in a positive credit situation, your regular bank may extend financing opportunities to get you set up.
- Credit Unions: Similar to major banks, many credit unions can offer flexible recreational financing opportunitues.
- Online Dealer Brokers: If a major bank or credit union isn't an option, you may decide to use an online powersports loan broker such as our partners at Revival Powersports who only deal with lenders offering open ended loans without any prepayment penalties. They have access to multiple private lenders who may offer options where others do not.
In conclusion, an open-ended loan can be a game-changer for Canadians looking to finance their dream motorcycle. Not only does it offer increased flexibility, it allows for opportunity to save on total interest paid ensuring that you're getting the best case deal in the event you come accross some extra funds. Our motorcycle loan payment calculator is a great tool that can give you an accurate estimate on what your loan might look like. So gear up, secure that motorcycle loan, and get ready to ride into the Canadian sunset on your dream motorcycle!