RV Financing - Some Helpful Suggestions
When you purchase an RV, if you deal with a reputable RV financing company like PRC, they can help find you the financing terms that best fir your budget and your credit score. PRC works hand in hand with a number of specialized lenders to get you the best interest rate and terms possible when you purchase that new or pre-owned RV. Financing a motorhome can often be very tedious depending on all the variables that are involved. However, the following five suggestions will help make the task a little easier.
#1 – If the loan you’re offered isn’t a “simple interest” loan, ask for one that is. If it isn’t a loan that has simple interest in the terms, you don’t want to have anything to do with it. There are no prepayment penalties with a simple interest loan meaning that your monthly payment is allocated between interest and principle. The part of your loan payment that gets put towards the interest is calculated based on the number of days that have passed since your last payment, the interest rate of the loan, and the unpaid balance remaining. What is left from the loan payment is applied to the unpaid balance of the principle.
#2 – Accepting the first financing option that the dealer offers you can cost you more money than it’s worth. Don’t accept the first offer without being allowed to compare it to other financing options. Although dealer financing may be less of a hassle for you, it may wind up being more expensive and contain more restrictive terms.
#3 – Avoid the tendency to “over-shop” for a loan. Filling out numerous credit applications with several different lenders is always a bad idea. If they are all checking into your credit history at the same time it will lower your credit score even further --- sometimes by as much as 5 points per inquiry. And it makes you look desperate which can result in diminishing your credit score even further.
#4 – If at all possible, try to have a reasonable debt-to-income ratio. Your financial picture is “painted” by your debt-to-income (DTI) ratio, and it is the way that lenders determine how healthy (or unhealthy) your credit history is. DTI is determined by taking the consumer’s minimum monthly debt and dividing it by their monthly gross income. Lenders are more prone to approve a loan if the DTI is 40% or lower.
#5 – Make a minimum 10% downpayment (more if you can swing it). The more you can put down on the loan, the better it looks to the lender. Rarely will you find a lender that will afford you 100% financing (total price of the purchase). If you are unable to put 10% down, this is a red flag to lenders and they will question your ability to repay the loan.
The process involved in financing an RV has grown increasingly more direct, simplified, and much more straightforward. Hopefully these suggestions will help you in your quest for financing that new or pre-owned RV.
Why Choose PRC RV Financing?
PRC RV Financing is not your typical recreational vehicle loan company. All of our rv loan representatives are experienced and have a financing background. They have done everything in the RV field from titling to sales and to F & I (finance and Insurance). And PRC RV Financing is actually in the RV business. In fact we are owned by one of the top RV dealers in the country and we know what it takes to get recreational vehicle loans done. And its easy, apply online for RV financing now, it’s that simple! Visit our secure online recreational vehicle loan application for approval within 2hours*.