  After
you set your sights on a new or
possibly used RV, the next step is
paying for it. An RV can be one of
the largest purchases you'll ever
undertake in your life, so spend some
time making certain your financing is
adequate and won't present undue
future hardships. Once you have
signed a contract, your lot has
pretty much been cast, and it could
require even more money to change
things if you are not happy.
Banks, credit unions or other loan
institutions are the usual lenders.
FinanceRV.Com financing program also
offers competitive interest rates and
can even refinance a rig (over
$15,000) on very reasonable terms.
You can choose a lender of your
own or let a dealer set up the loan.
Whichever you select, be sure the
lender understands the nuances of RV
economics. RV retailers, especially,
have an intrinsic interest in
securing affordable financing for
their clients and usually pay close
attention to interest rates and loan
programs that will work best.
Interest rates for 1999 were
pretty consistent and ranged from 8.5
to 11.5 percent, depending on the
amount financed and the length of
contract. A strong national economy
and a competitive banking climate
have helped to insure rate stability,
which is expected to continue at much
the same rate for 2001.
Credit approval for a new rig
usually hinges on four criteria:
one's credit history, sufficient
money down , proof of income and an
acceptable income versus expense
ratio (your income versus outstanding
monthly bill payments).
New RVs can often be financed
up to a maximum of 15 -20 years
(depending on the down payment and
balance owed). As a general rule,
banks and credit unions will write
loans up to eight years (96 months)
for amounts not exceeding $10,000; up
to 10 years (120 months) for balances
up to $14,999; and 12 years (144
months) for notes between $15,000 and
$24,999. Lenders will often finance
even larger amounts for 20 years (240
months) as long as the original
balance is near $100,000. Long
repayment terms might keep your
monthly bill low, but ask yourself,
"Do I really want to be locked
in for this amount of time?
An added benefit of financing
an RV is that interest paid on it is
100 percent deductible (it must be
self-contained) on your income-tax
return. This holds true as long as
you are not already claiming your
present home plus one other.
Home-equity loans are additionally a
good way to finance a large purchase,
such as an RV; however, check with
your tax advisor to see if it
qualifies for a tax benefit.
Loans for used RVs often
command higher interest rates,
shorter pay-back terms and a vehicle
age of not over four to seven years.
Furthermore, they are usually based
on 75-100 percent of "base
wholesale value." If preowned is
your target, check a Kelley Blue Book
or N.A.D.A. Recreation Vehicle
Appraisal Guide at a local library
for current retail prices.
Information is also available from
these publications online at www.kbb.com
or www.nadaguides.com.
The most successful plan for
obtaining good RV financing requires
doing your research first and
deciding on payments that will
realistically fit your budget. Don't
strap yourself, so that there's
wiggle room in the event of
unforeseen circumstances. Look for
the best interest rates and payment
plans ahead of time and don't hurry.
Deliberate, careful planning and
shopping around beforehand will
assure that you get the best deal for
your needs.
|