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Motorcycle Financing Company Wants More for Late Payment Interest. – Bill

“Dear Steve,

I have had a loan through the manufactuer of my motorcycle, the question is it is now the end of the loan term and they told me that I still owe $2000 because of late payments over the term of the loan.

I took advantage of there loan modification 3 times in 7 years because of my financial situation had not been great over the last few years.

At the time of each modification I was told that my loan must be made current first, which means a large payment was made to quailify. They exstended my loan 3 months and now they are still wanting more. I was told that I can look online for documentation as just how each payment was applied however I can only go back 1 year, I asked for a copy from them and have recieved nothing. Basicly I have paid off all the interest and owe pure princible now. If I had a late payment they charged and were paid late fees and now they added $2000 in additional interest.. is this legal? They have threatend to repo my bike because of it.


Dear Bill,

As a fellow motorcycle rider, I feel your pain. In fact you question makes me wonder what the hell I’m doing sitting here. I should be out riding!

I admit it is perplexing considering they required your payments to be current before modification. The initial thought was they must have been adding a negative payment amount to the account and then charging interest on it. That could add up. But that doesn’t sound like what happened.

When you look online I’m assuming it does not say that any of your last 12 payments were applied to fees or penalties and the entire payment is applied to the balance and interest. Is that correct?

My gut reaction is that it might just be a prudent move to contact a consumer attorney licensed in your state from NACA and pay then a couple of hundred to write a letter and try to get the company to respond with documentation. It’s a small investment in clarity considering what they are demanding of you.

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Because of the repo threat I’d go with that suggestion ASAP. I’d sure hate to see your motorcycle vanish over a misapplication or miscalculation of your payments.

Please post your responses and follow-up messages to me on this in the comments section below.


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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • Dear Steve,
    I have a simple interest loan (14.75%) on my Harley Davidson.  My monthly payments are 383.00 a month and are due the 24th of each month.  I pay 383.00 each on the 1st and the 15th of each month so that I can pay the interest in full sooner and have the principal left to pay and pay the loan off early.  December 2011 my balance was $12,000.00 plus and now July, 2012 my balance is $9,000.00 plus.  I’m not understanding this.  My finance company states that my interest accrues daily until the loan is paid in full and then  states that I will pay less interest if I make monthly payments before the due date.  I am making two payments before the due date.  The due date is the 24th  and i am making payments on the 1st and the 15th every month.  Please help.

    • OK, I can see how the math could potentially work if the balance was at the end of December and you made five full months of double payments.

      14.75% adds up fast on an outstanding balance. The good news is you are doubling up on payments and knocking this out quickly.

      On a 10,000 balance the interest for 15 days would be about $62 so only $321 of that payment went toward reducing your balance.

      Do you have an itemized statement from HD showing the payments applied and interest charged per month?

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