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Motorcycle Loans: Financing a Motorcycle - Can You Afford The Payments? - YouTube
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Hello my name is Randy and welcome to WeFindLenders.com this is a new episode
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idea we're doing and it's based on
people who have asked for specific loans
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to purchase different things this one is
about someone who wanted to buy a
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motorcycle and they wanted to borrow
$50,000 I'm not sure how much he had for
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a downpayment or how much he had saved
or how much his bike cost but wanted
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$50,000 to be borrowed so anyways we
have a nice little picture of a
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motorcycle Harley Davidson you can see
why someone would want to buy one there
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pretty good-looking right anyways so
let's get on with the actual loan and
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what we do to figure this out to try to
give a good answer on how much of a loan
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you can afford the best thing we can do
is take a look at a DTI calculator also
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known as a debt to income ratio
calculator we have a link here write
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four for me here already and that takes
us to this calculator this is Ashley a
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calculator a shout-out goes to company
called good calculators calm and
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debt-to-income so let's try their debt
to income ratio calculator and see if
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you can afford to borrow $50,000 you
scroll down a little bit here they have
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a lot of information about their loan
calculators and we have where we can
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enter some of the particulars in this
case this is Andrew he lives in Ohio if
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you're wondering where we get this
information from it's from a lot of loan
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websites we've had over the years since
2003 where people have written in or
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made comments asking requesting loans
and this is just an example that
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happened probably a long time ago but
it still works now so let's move on so
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gross monthly income in this case we
went with some of it's been prefilled
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out but anyways five thousand dollars is
the gross monthly income am i thinking I
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have a list of the basic items here
let's see yeah
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here we go monthly income before tax was
five thousand and let's see then we have
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partners before partners income before
taxes zero child support alimony zero
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extra income is twelve hundred so let's
go back to the calculator and put zero
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for that and other income twelve hundred
dollars okay so that's it pretty well
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for monthly income and now we can take a
look at mortgage and rent what have you
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in this case it was rent or eleven
eleven hundred dollars total and let's
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take a look here property tax is zero
obviously it's a rental condo and HOA
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fees zero home insurance zero so vehicle
loan $650 so let's put that in our
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calculator car loan six hundred and
fifty dollars I believe there was zero
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for a personal loan let's scroll down a
bit bit student loans no credit card
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minimum no actually no sorry credit card
minimum payment seventy-five dollars
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okay
it's just entered 75 then alimony child
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support zero and other debt was zero so
now we can calculate this and you see
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the update of the numbers down below
coming in with a debt to in
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ratio of twenty nine point four four
percent so we explained here they'd
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explain actually on good calculators
calm a back-end debt-to-income ratio of
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twenty nine point four four percent your
credit risk level is modern back in
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front-end debt to income ratio is
seventeen point seven four percent
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credit risk level is considered low
total monthly income $6,200 total
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monthly debts 1825 and then we have a
nice little pie chart here with an
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income breakdown household debts other
debts and remaining so you know all
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information in this looks like a a
healthy debt to income ratio and some
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way somebody who could get a loan no
problem they should shouldn't have an
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issue with this right but we have to
take into consideration credit score so
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let's go back and take a look I think
I've got this information already
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entered here so we give the good example
the credit score was 640 so you know he
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wants to borrow $50,000 to buy this
motorcycle debt-to-income is twenty nine
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went for four percent we always want to
see someone's debt to income ratio below
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thirty five percent that's a really good
round safe number to go by and we have a
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little bit information about DTI here
and we have an expert Emilia Josephine
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Josephson she's a financial writer she's
been on AOL CBS News the simple dollar
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and she has a degree from the Columbia
and a degree from Oxford anyways she
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explains about what a healthy DTI is
over here if you click on this post
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explains all about what is a good debt
to income ratio recommended reading I
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would say you know explains everything
you need to know and what numbers to
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look for and like I said she comes to
conclusion of thirty six percent so
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we use 35% as a good safe place to be
but like I say back to credit rating so
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with a credit score of 640 it's cut you
know it's pretty risky because the the
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interest rate you would probably get for
a loan with a credit score it's gonna be
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quite high so that's really gonna affect
his debt to income ratio of course a lot
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of people would take the risk and do it
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with these numbers and a bank would
probably approve him but my
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recommendation would be unless you
really need that motorcycle you know if
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there's something you want to get to
work with that's something that's
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completely different and maybe it's a
necessity
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but if it's just for pleasure and it's
just for fun I would suggest holding off
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on that and waiting wait till the credit
score's been approved quite a bit and
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get a better rate and maybe work on
saving up a lot of money beforehand so
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you have a nice down payment if he can
hold off that would be definitely my
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recommendation anyways I should point
out though I have to say this because
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the real experts in the room want me to
say this he looked down at the bottom of
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the post
this is transcribed it's gonna be
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transcribed in fact checked by Lance he
has a degree University of Illinois so
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he will transcribe and fact check this
but I am NOT a specific expert I'd just
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want to run through and give you some
basic ideas so this goes Randy's opinion
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to me in the video are completely his
own and not necessarily the opinions of
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the owners and our producers of WFL we
find lenders calm this commentary is not
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intended to be financial advice you
should seek professional advice from an
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expert in your area before making any
financial decisions okay so there you
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have it on the post you'll have all this
information will be transcribed in will
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however are a white board here for years
a look at
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I hope this has been helpful it's always
good to use a DTI calculator before
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considering any kind of a loan thank you
and farewell from WeFindLenders.com
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