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How Do Motorcycle Title Loans Work?

Last updated 06/17/2024 by

Justin Smith

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Motorcycle title loans are a type of loan in which you put up your motorcycle title as collateral. They don’t require a good credit score or financial history to qualify. Instead, you just need to own your motorcycle outright, have proof of income documentation, and be of a certain age as required by your state. That said, motorcycle title loans aren’t offered in every state. They also have disadvantages including a potentially high risk for debt and a time-consuming process, as you have to get your motorcycle inspected in person by the potential lender.
Title loans are most often associated with cars, in which you put your vehicle up for collateral. However, they also extend to other types of vehicles, including motorcycles. If you’ve hit a difficult time financially, and are wondering how you can get cash fast, a motorcycle title loan might be worth looking into.
With motorcycle title loans, you put up your motorcycle title as collateral for a short-term loan. You don’t need a strong credit history or employment to qualify, meaning that there aren’t many hindrances to you being able to get the money you need. However, these loans can be risky and may result in losing your motorcycle if you can’t pay.

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What is a title loan?

A title loan is a loan that requires an asset as collateral. There are two main reasons that title loans are popular. One is that an applicant’s credit rating is not taken into consideration when determining qualifications for the loan. Another is that a title loan can be approved very quickly for amounts as low as $100.
Title loans, like payday loans, typically come with high interest rates and can be difficult to pay off if you don’t have a consistent source of income. This is partly why they aren’t allowed in several states. They are typically taken on by people experiencing financial difficulties, or who quickly need cash. The most common type of title loan is a car title loan, in which the car itself is the asset that is put up as collateral.

How do motorcycle title loans work?

Motorcycle title loans work by using your motorcycle as collateral for a short-term loan. You can typically qualify for a loan up to $10,000 depending on your state’s regulations and the quality and value of your motorcycle. This type of loan may also be called a motorcycle title pawn. There are two types of title loans you can take out on your motorcycle.
  • Single payment loans. Single payment loans give you just a month to repay your loan amount in full. You have the ability to renew your loan if you cannot make the payment in time, but this will increase your interest rates.
  • Installment loans. Installment loans allow you to repay your loan amount over a specified period of time, typically three to twelve months.

How can you get a motorcycle title loan?

The application for the motorcycle title loan process varies by state, but there are a few general guidelines you can follow to get started.

Get an estimate

The value of your motorcycle is essential to securing your title loan. The lender will want to inspect the motorcycle before giving approval, and the vehicle’s age, make, model, and mileage will be taken into account.
You can’t typically borrow against the full value of your vehicle, but most lenders don’t tell you what percentage you’re eligible for until after you apply. Getting an estimate on your motorcycle before you apply will help give you a general idea of what your minimum loan amount will be.

Compare lenders

Comparing lenders can help you to better understand the market, and give you a better idea of what kind of loan amount you’ll be getting relative to your needs. It’s especially important to compare APRs, and the amount of time you’ll have to pay the loan back. The longer the loan term, the more time there is for interest to add up.
IMPORTANT! Don’t forget to compare lenders regardless of what type of loan you’re interested in. This is an important step when looking for personal loans, mortgages, car title loans, and credit cards.

Start the application

Once you begin the application process, the lender will ask for some supporting documents, a valid government-issued ID, and a few specific pieces of information. These include your:
  • Name
  • Contact information
  • Social Security number
  • Motorcycle’s make, model, year, and mileage
After your lender has all of this information in order, you can proceed with your loan application.

How do you qualify for a motorcycle title loan?

Motorcycle title loans are fairly simple to qualify for and typically don’t require a lot of information from the applicant. That said, there are a few requirements you will have to meet.
  • Lien free motorcycle title. You can’t have any current liens on your motorcycle title that use your motorcycle as collateral.
  • Regular income documentation. Although you don’t have to be employed to qualify for a title loan, you do have to show proof of income. Lenders want to see this so that they know you have the ability to repay your loan amount.
  • Proof of residence. Lenders will want to see proof of residence so they can verify that you live in the state you are applying for a loan in. This can be a utility bill, lease agreement, or other form of documentation with your name and address on it.
  • At least 18 years old. In most states, you have to be at least 18 years old to qualify for a motorcycle title loan. That being said, there are exceptions, including Alabama, where you must be at least 19, and Mississippi, where you have to be at least 21.
If you meet these qualifications, take a look at some of the lenders below to see what kind of loan terms you may qualify for. While these are specifically for car title loans, this will give you a better idea of what a motorcycle title loan’s terms may look like.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Pros and cons of motorcycle title loans

Getting a motorcycle title loan can be greatly beneficial to people who need cash fast or are in financial need. However, they can also end up hurting your finances in the long run.
Here is a list of the benefits and drawbacks to consider.
  • Quick funding. If you apply for your title loan in person, you can get approved in as little as thirty minutes, meaning you can get quick cash should you need it. You can have money in your account in a short amount of time.
  • Retain use of your car. If you use your car more frequently than you do your motorcycle, a motorcycle title loan can allow you to keep using your car while your motorcycle is offered as collateral. You can continue using your own personal transportation and won’t have to make other arrangements.
  • All credit types accepted. It’s fairly simple to get approved for a motorcycle title loan and you don’t need good credit in order to qualify. Although proof of income is required, you likely won’t need to provide proof of employment to be considered.
  • Risk of debt. Motorcycle title loans can leave people in a cycle of debt that can be difficult to climb out of. Since title loan lenders charge high interest rates, missing a payment can damage your credit and financial safety net.
  • Only available in select states. Title loans aren’t available in every state, so depending on where you live, a motorcycle title loan might not be available to you. Additionally, there are states that regulate title loan providers to help prevent risks associated with predatory lending practices.
  • Time consuming. Unlike applications for other loans, you can’t fully complete motorcycle title loans online. There are certain aspects, such as allowing the lender to inspect your motorcycle, which can take time, thus prolonging the amount of time you’re without money.

Pro Tip

If you find yourself unable to make the payments on your motorcycle title loan and it causes worse financial issues, it might be a good idea to seek credit counseling to find out how you can improve your financial health.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Are there any alternatives to motorcycle title loans?

Motorcycle title loans can be useful financial tools if you want quick cash or don’t have a high credit score. However, there are also other alternatives that can be worthwhile to consider.

Banks and credit unions

Banks and credit unions also offer short-term loans that are designed to eliminate predatory loans, including title loans and payday loans. A local bank or credit union is more likely to accept an application with a low credit score or other issues, as big banks are often quick to reject these.

Personal loans

Personal loans are available at banks, credit unions, and online lenders. A personal loan isn’t always secured by collateral, such as your motorcycle’s title. Instead, lenders approve you based on your credit score and the income you have available to repay the loan. They also offer fixed interest rates, which are generally much lower than the high rates of a title loan.
While personal loans generally have higher interest rates than secured loans, they don’t often come with the same risks associated with title loans. Take a look at some of the personal loans below to get an idea of the loan terms you might qualify for.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Secured loans

A secured loan is backed by collateral provided by the borrower. If you fail to repay your secured debt, the lender can seize your collateral to recoup their losses. These types of loans are often easier to qualify for.

Unsecured loans

With an unsecured loan, lenders rely on creditworthiness, income, and debt-to-income ratio to determine whether you’re a good candidate for a personal loan. This can make unsecured loans difficult to get if you have bad credit.
Unsecured loans are generally considered safer since the lender can’t seize your property if you fall behind on your loan payments. That said, regardless of whether you get a secured or unsecured loan, creditors can take action against you to recoup their losses if you don’t pay. You also must have active bank account details to apply for an unsecured loan.


What is the lowest credit score you need to buy a motorcycle?

There is no minimum credit score to purchase a motorcycle, but most lenders require a credit score of at least 620 to finance the purchase of a motorcycle. If your credit score is below 620, you may still be able to find a lender who will work with you to finance your motorcycle loan. However, it may be more difficult and you probably won’t get the most favorable loan terms.

What is the average term for a motorcycle loan?

The average term for a motorcycle loan is between 12 to 48 months. Motorcycles depreciate in value relatively quickly, so most lenders won’t want to go much longer than two to three years. It only takes a couple of years to find yourself paying on an upside-down loan, so you won’t want to go much longer than that.

What’s the highest interest rate on a motorcycle loan?

The interest rate on your motorcycle loan typically depends on the type of motorcycle you have, as well as its age, condition, and the number of miles it has on it. This is in addition to your credit history and credit score.
For example, loans for street motorcycles can have interest rates as high as 5%, while loans for off-road motorcycles can have interest rates over 9%.

Key Takeaways

  • A motorcycle title loan is a loan in which you put your motorcycle up as collateral. They come as either single payment loans or installment loans.
  • You can qualify for a motorcycle title loan by having a lien-free title on your motorcycle, proof of income, proof of residence, and being at least 18 years of age. However, the age requirement varies by state.
  • The advantages of getting a motorcycle title loan include quick funding, being able to retain the use of your car, and the ability to qualify without a good credit score.
  • That being said, there are some risks as well. These include the risk of debt, the time-consuming application process, and the fact that they’re only available in select states.
  • Alternative options to motorcycle title loans include banks, credit unions, and personal loans, as well as secured and unsecured loans.

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