Powersports Loans for Bad Credit
If you have bad credit, getting a loan can seem out of reach — especially if lenders have turned you down in the past. But securing ATV financing with a 600 credit score (or lower) isn’t impossible. It can, however, be expensive.
Still, targeting the right lenders could turn your ATV dream into a reality. A powersports loan might even give your credit score a boost. That is, as long as you make on-time payments.
Types of ATV loans for bad credit
To get a bad credit powersports loan, you need to have a strategy. The first step in that strategy is knowing what kind of loans are available.
💰 Personal loans
Personal loans are a popular way to finance large purchases, including all-terrain vehicles (ATVs), dirt bikes and the like. A personal loan will give you a lump sum of money, which you pay back in monthly installments (plus interest). Your loan term (or the length of time you have to pay off your loan) can vary, but 24 to 60 months is common.
Personal loans are typically unsecured. In other words, they don’t require collateral. On the plus side, personal loans don’t require a down payment.
It can be challenging to meet personal loan requirements if your score is below 640. But you could find a bad-credit loan from one of the lenders below — they’re open to working with those with less-than-perfect credit.
Do note, though, that while these lenders may approve you, you could be facing an annual percentage rate (APR) of nearly 36%. Use our ATV loan calculator to see how your average APR will impact the overall cost of your loan.
| Lender | Minimum credit score | APR range | Loan amounts | Loan terms |
|---|---|---|---|---|
| Avant | 580 | 9.95% to 35.95% | $2,000 to $35,000 | 12 to 60 months |
| Best Egg | 600 | 8.99% to 35.99% | $2,000 to $50,000 | 36 to 60 months |
| LendingClub | 600 | 9.57% to 35.99% | $1,000 to $40,000 | 24 to 60 months |
| Prosper | 560 | 6.99% to 35.99% | $2,000 to $50,000 | 24 to 60 months |
| Upgrade | 580 | 8.49% to 35.99% (with discounts) | $1,000 to $50,000 | 24 to 84 months |
| Upstart | 300 | 6.40% to 35.99% | $1,000 to $50,000 | 36 and 60 months |
🛒 Manufacturer loans
Some manufacturers offer in-house financing. Instead of working through a financial institution, the manufacturer provides your loan. For instance, you could get a loan through Honda Financial Services — but only if you buy a Honda through a certified dealer.
You could find ultra-low APRs on a manufacturer loan by shopping during the holidays. It’s not uncommon to find sales events and buyer incentives during this time.
Not all manufacturers offer loans for people with bad credit. To make things trickier, many manufacturers don’t publicly disclose their minimum credit score requirements. In that case, the best way to tell if you qualify is to get preapproved for a loan.
Manufacturer loans are secured and use your ATV as collateral. They may also require a down payment, unless the manufacturer or dealer is running a no-money-down promotion.
🏦 Bank or credit union loans
You could look to your current bank or credit union for a powersports loan. Compared to online loans, bank and credit union loans tend to have lower interest rates. They can also be harder to qualify for. Still, your financial institution might be willing to work with you if you’ve been with them for many years.
When rate shopping, know that your bank or credit union might call their powersports loan by a different name. For example, Digital Federal Credit Union (DCU) offers ATV loans under its RV loan product. USAA Bank, on the other hand, provides ATV financing through a leisure vehicle loan. Other banks might not offer a specific powersports loan but instead lend via a personal loan.
Additionally, depending on the type of ATV loan your bank or credit union provides, it could be secured or unsecured. If it’s secured, you might need to make a down payment.
🤝 Dealership loans
Like manufacturer loans, dealership loans are secured by your ATV. While convenient, dealership loans can be pricey. The dealer has no obligation to look for the loan with the lowest interest rates.
Shop around and compare loan offers before committing to a dealership loan. Also, avoid buy here, pay here lots. It can be tempting since they have such lax credit requirements, but their loans (and vehicles) are much more expensive than other options.
Qualifying for a powersports loan with bad credit
It can be hard to get a powersports loan (that you can afford) if you have rocky credit. Lenders review several factors to determine your creditworthiness, including your credit score. The lower your score, the riskier the lender will view you. In turn, the higher the APRs it will charge (if it approves you at all).
Don’t lose hope. You could boost your loan approval odds by:
Making a down payment
If you’re getting a manufacturer or dealership loan, making a substantial down payment can help you get approved. The more you put down on a vehicle, the less risky you are to a lender because you have more skin in the game.
Considering a secured loan
A lender might be more willing to approve you for a secured loan. If you fall behind on the payments, the lender can repossess the vehicle. Then, it may sell the vehicle to pay off your loan and other expenses.
Improving your credit score
Another option is to work on improving your credit score before you apply. Make your payments on time and carefully monitor your credit report for problems or errors. Reduce your debt-to-income ratio by paying down your debts.
As you build a solid history of on-time payments, your score should slowly improve. With a higher score, you can more easily qualify for financing with better rates.
Budgeting for a powersports loan
The sticker price on your next powersport vehicle isn’t the only factor you should consider when you’re figuring out your monthly payments. Related costs that could impact the price of owning an ATV include:
Licensing, insurance and safety gear
Laws vary, but you generally need a driver’s license to operate a powersport vehicle. Some states may require training, special registration, insurance and safety gear, such as a motorcycle helmet for ATVs or life jackets for jet skis.
Transportation
You’ll need a way to transport your powersports vehicle to your off-road location. That means you may be shopping for a pull-behind trailer.
Fuel and maintenance
Fuel may be one of the first expenses you think of, but it can actually turn out to be one of the least consequential. Powersport vehicles tend to be very frugal on fuel; however, regular maintenance and repairs could add up. Research to learn what you can expect to spend to maintain your specific make and model.
Taxes
Taxes are a necessary part of purchasing a vehicle of any type in most states. When budgeting for your powersport vehicle, look up your local sales and personal property tax rates.
Loan costs
ATV and other powersport loans could have high APRs and origination fees for people with bad credit. An origination fee alone can be as high as 12% of the total loan cost. The best way to estimate these costs is to get preapproved.
Is a bad credit ATV loan a good idea?
Although an ATV isn’t a necessity, financing one with bad credit isn’t always a bad idea. Most importantly, make sure that a powersports loan won’t cause you to fall behind on other obligations. Also, consider the total cost of your loan, including interest and fees.
If you go into an ATV loan with bad credit but a solid plan, you might come out with a better credit score than when you started. Your payment history accounts for 35% of your credit score. Making on-time payments a strong signal of responsible borrowing, possibly landing you better rates in the future.