Should A Credit Card Cash Advance Finance A Motorcycle Loan Down Payment

There is no doubt that the prices of motorcycles have risen over the last couple of years, and as a result many more motorcycle buyers are seeking out a motorcycle loan to finance their bike purchase. Since motorcycle lenders base credit approval amounts on loss rates and a buyer’s credit history the rising prices of motorcycles has made it much more common for motorcycle purchases to be financed with a down payment.

Since motorcycle loans are much more frequently being financed with a down payment requirement, this has made many cash strapped motorcycle buyers consider taking out a cash advance on their credit card in order to finance the down payment on their motorcycle purchase.

If you are a looking to purchase a motorcycle and are considering taking a cash advance on your credit card to finance your down payment, here are some questions you should consider before making this financial decision.

• On cash advances does the credit card bank charge you a higher interest rate than the normal rate? Is the normal rate reasonable?

• How fast will the motorcycle you purchase depreciate? Will it depreciate more quickly than you will be paying down the principal on your motorcycle loan and credit card cash advance? If so will you be unhappy if you have to sell your motorcycle but can not get enough money to pay off your motorcycle loan?

• Have you searched all available finance sources? Sometimes credit unions, your local bank or online motorcycle lenders can get you approved for a motorcycle loan without a down payment.

• Are there late fees on your credit card cash advance if you miss a payment? If so how much are they?

• Is your current job and income stream stable enough so that you can make the required monthly payment on both your motorcycle loan and your credit card cash advance?

• Have you thoroughly reviewed your credit card terms? Can the credit card bank freely increase your interest rate without any reason?

• Have you consider selecting a less expensive motorcycle model that the motorcycle lender may not require a down payment for?

Overall, there is absolutely nothing wrong with getting a motorcycle loan. Thousands and thousands of people every year obtain motorcycle loans and have very enjoyable successful experiences. But if you are looking to take a cash advance on your credit card to make a down payment on your motorcycle purchase, it may not be the wisest alternative depending on your individual situation. The above questions can be used to help guide you in making the best financial decision for you.

Copyright (c) 2006, by Jay Fran. This article may be freely distributed as long as the copyright, author's information and the above active live links including anchored text are published with the article.

About The Author

Jay Fran has been riding motorcycles since he was introduced to them by his father as a kid. He enjoys both dirt and street motorcycles. Jay has a graduate level education in finance and many years experience in financial services.

Jay is also the creator of motorcycle-financing-guide.com, a website dedicated to help Atv & motorcycle buyers make the right motorcycle loan and Atv Financing decisions when purchasing a new or used motorcycle or Atv with financing.