A recreational vehicle (RV) can provide a great escape from the monotony of daily life. Not only is it a convenient option for trips or vacation, but it also allows you to save money while enjoying your time in the outdoors.
Needless to say, the decision to purchase an RV is one of the best you’ll ever make in your lifetime.
As exciting and adventurous as the venture sounds, if you’re in the market for an RV, you have to critically assess the state of your finances. This is one decision that can prove counterproductive if you jump in without making a proper evaluation.
Fortunately, a little preparation can go a long way when financing an RV. The tips provided in this guide will bring you a step closer to making your desired purchase.
Important things to consider
Factors such as current interest rates and your credit score are some things to consider when planning to finance an RV. Quite like home loans, the interest rates on RVs are not static and are influenced by market trends.
Similarly, your credit score will greatly influence your loan interest rate. Although it is important to have a good credit score, a low credit score is not much of a deal-breaker. You simply have to search for a dealer willing to work with your credit rating.
Such proactive steps would go a long way in simplifying the entire process.
Useful Tips for financing an RV
Increase your savings
Unless you plan on paying cash (which isn’t an advisable move), you intend to finance your RV by getting an RV loan. A good way to reduce your costs in the long run and save some money is to put down a large down payment.
To do this, you need to increase the amount of cash you have at hand.
Examine financing options
When it comes to getting an RV, the bank, online financing and credit union are some of the most common options. It helps to consider the pro and cons of both options before making a final decision.
For one, the bank provides you with direct pricing without the intermediary present at dealerships. However, the bank may offer you a single deal, thus eliminating your chance at negotiation – an opportunity you could easily enjoy with a dealership.
Get a low-interest rate
Whether you opt for a bank loan or credit union loan, you aim to get a good deal without going flat out broke. Negotiating a lower interest rate is a sure way to save money on your purchase especially if you have your eye on a more expensive RV.
Get a shorter loan
While we’re on the topic of cutting costs, a short loan is always a good option. Irrespective of the interest rate, the total interest paid over 10 years would be considerably more than that paid over 5 years. Essentially, the shorter the loan, the lower the interest payable.
The idea of financing an RV may seem daunting and the choices you make will determine how soon you can own your RV. Do your careful research before deciding on a particular financing option and the tips provided above would go a long way in simplifying the entire process.