How Do ATV Loans Work? | Hunt or Shred

Do you want to purchase an ATV but don't have the cash to pay for it upfront? You’re not alone! Many people turn to ATV loans to finance their new rides.

But how do ATV loans work? Essentially, an ATV loan is a type of loan that you can take out to purchase an ATV. You typically work with a lender or a dealership to secure financing. The loan has a set term and interest rate, and you'll make monthly payments until the loan is paid off.

I understand that taking out a loan for your ATV can be a huge decision. For that reason, I’m committed to providing you with accurate and trustworthy information about ATV loans. I have researched and compiled everything you need to know about ATV loans, so you can make an informed decision about financing your new ride. Read on to learn all about ATV loans and how they work.

Table of contents


What is an ATV Loan?

Before I even take you through how ATV loans work, do you understand what they entail? If you're thinking about buying an ATV but don't have the cash up front, an ATV loan can help you finance your purchase.

ATV financing is similar to financing a car or motorhome. You'll get a loan term, usually 1-6 years, where you settle your ATV costs in monthly installments, with interest and applicable fees. Also, these loans can be secured or unsecured.

Understanding the Types of ATV Loans

When financing an ATV, there are two main types of ATV loans to choose from: secured and unsecured, as said earlier. Each option has its own set of advantages and disadvantages, so it's important to understand the differences before making a decision.

Secured ATV Loans

A secured ATV loan is a loan that uses your vehicle as collateral. It means that if you default on your ATV loan, your lender can repossess your ATV to recoup their loss.

And because the lender has some security in the form of your vehicle, secured loans often come with lower interest rates than unsecured loans.

Secured loans are a good option if you're looking to finance a more expensive ATV or if you have less-than-perfect credit.

Unsecured ATV Loans

Unsecured ATV loans are loans that don't require collateral. Because the lender doesn't have any security in the form of your vehicle, unsecured loans often come with higher interest rates than secured loans.

However, they also come with less risk since you won't lose your ATV if you default on your loan. Unsecured loans are a good option if you have good credit and are looking to finance a less expensive ATV.

How ATV Loans Work

If you're interested in purchasing an ATV but don't have the cash on hand to pay for it outright, an ATV loan may be a good option for you.

You can borrow money directly from banks, credit unions, and other lenders or arrange financing through a power sports dealer. But before you apply for an ATV loan, it's important to know your credit score and credit history.

Lenders typically view ATVs as luxury items, so they may require a higher credit score than they would for a car loan. If you have a lower credit score, you may still be able to get approved for an ATV loan, but you may have to pay a higher interest rate.

When you apply for an ATV loan, the lender will typically ask for information about the ATV you want to purchase, such as the make, model, and year. They may also ask for information about your income and employment history to determine whether you can afford the loan payments.

ATV loans typically have a term of one to six years, and you'll make monthly payments plus interest to pay off the cost of your ATV. The exact specifics of your loan will depend on what type of ATV financing you choose.

Some lenders may offer secured loans backed by collateral such as the ATV itself, while others may offer unsecured loans, which don't require collateral but may have higher interest rates.

It's important to shop around and compare ATV loan rates and terms from different lenders to find the best deal for you. Before you start shopping, you may also want to consider getting pre-approved for an ATV loan, so you know how much you can afford to spend on an ATV.

Factors for Getting Approved for an ATV Loan

Before applying for an ATV loan, it’s important to understand factors that will affect your approval and how you can get around them.

Credit Score and History

One of the most important factors that lenders consider when approving an ATV loan is your credit score and credit history.

Your credit score is a numerical representation of your creditworthiness, and it's based on your payment history, outstanding debts, length of credit history, and other factors.

Lenders use your credit score to determine your loan's interest rate and terms. If you have a high credit score and a good credit history, you're more likely to get approved for an ATV loan with favorable terms.

Down Payment

Another factor that lenders consider when approving an ATV loan is the size of your down payment. A down payment is the amount of money you pay upfront toward the purchase of your ATV.

The larger your down payment, the less you'll need to borrow, and the more likely you’ll get approved for a loan. Most lenders require a down payment of 10% to 20% of the total cost of the ATV, but some may require more.

Income and Employment Verification

Lenders also need to verify that you have a steady source of income and employment before approving an ATV loan. They want to make sure that you have the financial means to repay the loan on time and in full.

You'll typically need to provide proof of income, such as pay stubs or tax returns, and employment verification, such as a letter from your employer. If you're self-employed, you may need to provide additional documentation, such as bank statements or business tax returns.

Financing Options for ATV Loans

When it comes to financing your ATV, you have several options to choose from. Here are three popular financing options:

Dealership Financing

Dealership financing is a common option for financing an ATV. This option is available when you purchase your ATV from a dealership. It’s convenient because you can complete the financing process and purchase your ATV in one place. However, you might incur higher interest rates than other financing options.

Bank Loans

Bank loans are another option for financing your ATV. You can apply for a loan at your local bank or credit union. Bank loans usually come with lower interest rates than dealership financing. However, bank loans often require a good credit score and a down payment.

Online Lenders

Online lenders are becoming increasingly popular for financing ATV loans. You can apply for a loan online and receive a decision within minutes. Online lenders often offer competitive interest rates and flexible repayment terms.

Pros and Cons of Each Financing Option

Financing Option Pros Cons
Dealership Financing Convenient, quick process Higher interest rates, limited options
Bank Loans Lower interest rates, more options Good credit score and down payment required, longer process
Online Lenders Competitive interest rates, flexible repayment terms, quick process Research is required to ensure the lender is reputable

It’s important to shop around and compare offers from different lenders to find the best option for your needs. That way, you’ll settle for the right financing option for your needs.

ATV Loan Repayment

After you have been approved for an ATV loan, you’ll need to start thinking about how you are going to repay it. ATV loan repayment works much like any other loan repayment. You will need to make monthly payments to your lender until the loan is fully paid off.

The amount you pay for your monthly payments will depend on several factors, including the amount of your loan, the interest rate, and the length of the loan term. Generally, the longer your loan term, the lower your monthly payments will be, but the more interest you will end up paying over the life of the loan.

It’s important to make your monthly payments on time to avoid late fees and to keep your credit score in good standing. If you’re having trouble making your payments, you should contact your lender as soon as possible to discuss your options.

Some lenders offer autopay options, which can automatically deduct your monthly payments from your bank account. This can be a convenient option for those who want to ensure they never miss a payment.

Key Takeaways

  • ATV loans work much like car loans, where you borrow money to purchase an ATV.
  • Interest rates vary depending on credit score, length of the loan, and the lender.
  • Some lenders may require a down payment for an ATV loan.
  • These interests often range from 10% to 20% of the total cost of the ATV.
  • Shop around and compare rates from multiple lenders to find the best deal.

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25 years old. I'm from PA. I love horseback riding and riding ATV's. My husband and I own a farm and our ATV's help us work and have fun.

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