So i got pre-approved today for up to $7000 to get a motorcycle. But the FCU said there is 80% thing value or whatsoever theyre talking about. I dont know what it is. This is gonna be my first loan. So anyway, the price of the motorcycle out the door is $6380 that includes everything(the bike is on sale for 5k). And the MSRP is $6200(no tax etc.). So the guy did the calculation, he said i can only get the loan 80% of the the bike msrp. That being said, i will end up with $4994. I kind of dont get it. Somebody explain please. They approved me for 7k, but they only want me to get 80%. So they want me to pay 7k loan but they only giving me 5k? Its confusing.

No...you were approved for up to $7,000. The one caveat is that you can only borrow up to 80% of the MSRP of the vehicle. When you buy the motorcycle, they will give you a check for the $4,994 which is the amount you will be borrowing (not the $7,000). You have to come up with the difference if you want to buy the bike (the last $1,400). Nobody finances 100% of a vehicle - you will always need a down payment since the value of the vehicle drops about 15 - 20% the minute you drive off the lot.

You were approved "up to" a maximum of $7k but the collateral(motorcycle) must be worth at least as much as the loan amount after the 20% down payment which may include the discount. You will only be paying back a loan amount of $4994 plus interest but will need to pay a larger down to cover the deficeit.. Good Luck

Yes, you are approved for a loan up to 7k at 80% loan to value. That means if you borrowed the whole 7K you would still have to have $1400 in cash. You could buy a bike for $8400.

You need to put down 20% no matter how much the bike costs.

If you let your insurance lapse and crash the bike - or if you don't pay and they repo the bike - they will lose out big time if they loan you 100% of the money. You have to put in 20% to protect the bank's "investment" in the bike.

Before you do anything further, go back, reread what the CU told you or talk to them if necessary, and find out exactly WHAT the "whatsoever they're talking about" conditions ARE. You need to understand what you're getting into ahead of time. That's common sense 101.