Bicycle Loan – Road And Motorbike Finance

A bicycle loan can quickly get you the cash you need for your dream bike. There is, however, a number of ways to finance the purchase of your next bike. Monzi is here to explain your options and give you a step-by-step guide to buying a bicycle on finance.

Bicycle loan step 1 – picking the right bike

A pretty obvious place to start, right? Before you know what kind of loan you need, you need to figure out which bicycle you want.

Your decision will be based on what kind of riding you intend to be doing. Obviously, certain bikes will be more suited to a particular purpose than others. The most common types of bicycles in Australia include:

  • Mountain bikes. These rugged all-purpose vehicles are built to handle anything from bush trails, mud, rocks, fallen branches and other obstacles. As such, they are the perfect option for people intending to get their hands (and tires) dirty.
  • Road bikes. Lightweight and built for speed, road bikes are perfect for anyone looking tear up the tarmac. Due to their thin tires and light frame, however, these bikes are only suitable for sealed roads.
  • Hybrid bikes. Also known as commuter bikes, hybrid bicycles are, as you may have guessed, a mixture of both on and off-road bicycles. Combining the comfort of a mountain bike with the speed and maneuverability of a road bike, hybrid bikes are popular among beginners and city commuters alike.

Finally, remember that finding your correct bike size is crucial. A general rule of thumb is that the bike seat should be level with your hips when standing next to it. Despite this, most bike stores should have a sizing guide to help you find the perfect fit.

Bicycle loan step 2 – finding finance

So you’ve decided which set of wheels you like? Awesome! Now it’s time to find a loan that suits you.

Certain bike shops may let you finance the purchase of your bike in store. Alternatively, you may be able to finance your bike purchase through certain buy-now, pay-later schemes such as:

  • Afterpay. Repaid over four instalments. Repay the principal only if you pay in within the allotted timeframe.
  • Zip. Buy it now with Zip pay, and then make repayments over a flexible term.

On the other hand, you could apply for bicycle finance from a credit provider. Specifically, you may be able to apply for personal loans from $300 to $10,000.

With a wide range of loan amounts available, personal loans may be an option for beginner cyclist looking for an entry-level bicycle as well as seasoned veterans looking for the latest and greatest in bicycle innovation.

If you aren’t sure where to find a lender, you could consider using our lender-finder service. We may be able to match you with a potential lender in no time.

Step 3 – repayments

At this stage, you should already be tooling around on your new set of wheels. Having your bike sooner than you would otherwise is undoubtedly the best part of financing the purchase. Obviously, however, you need to repay your loan.

For personal loans, the lender is likely to set up a direct debit from your account. Therefore, your repayments are automatically deducted. Once your loan is settled, the repayments stop.

While this all sounds simple enough, you do need to pay attention to your repayments. Missed repayments can quickly add up if you aren’t watching. Not only will this increase the overall cost of your personal loan (as they are interest-based), but repeated missed payments would quickly bring your credit score down.

Bicycle loan man riding yellow wheels

Bicycle loan FAQs

We hope we’ve given you a thorough, albeit short, rundown of bicycle finance. Despite this, you may still have a number of questions left unanswered. We will aim to remedy this here:

Can you get a loan if you have poor credit?

Yes, you may still be eligible for loans if your credit report contains multiple missed payments. While there is no guarantee, plenty of alternative lender options are willing to consider applicants with poor credit history.

Do bicycle loans come with a credit check?

Certain lenders may be able to offer you bicycle finance without checking your credit history. These lenders, however, may only offer small loans of up to $2,000.

Keep in mind, people often look for finance with no credit assessment because they feel their credit history is so poor, they will not be approved any other way. This may not always be true. There are a number of alternative lenders willing to offer loans to people with lacklustre credit.

How old do you have to be to get finance on a bike?

Consistent with the vast majority of credit products in Australia, you must be over the age of 18 to be eligible for bicycle loans.

Do I need a downpayment?

Whether or not you need a downpayment will depend on where you purchase your bike. Once you’ve chosen your model, get in contact with your local bike shop and go from there.

What happens if I can’t afford repayments anymore?

Let’s pretend you’ve just run your new bicycle into the back of the car. While the bike has stayed stationary, you have continued forward and propelled yourself right into the hospital. Obviously, you’re going to miss a while of work, but what happens to your repayments?

For personal loans, you can get in contact with your lender and let them know what’s happened. Generally, you will be considered for a hardship adjustment if you provide enough evidence.

Monzi Personal Loans

Monzi’s lender-finder service may make finding your new lender the easiest thing you do all week. Apply once on our site and we’ll aim to do the rest. The lenders in our network are potentially able to offer personal loans from $300 to $10,000.

There’s plenty more Monzi over on Facebook, Instagram, Twitter and Pinterest.

Finally, consider the MoneySmart website for more info on personal loans.

Factor In

Costs

Two credit cards
Two credit cards

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Loan amount

$2,001 - $4,600

Terms

13 months

24 months

Costs

48% annual percantage rate

67.41% comparison rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Interest Rate for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months

24 months

Costs

21.24% annual percantage rate

48% comparison rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Interest Rate for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.