Loan Tips to Maximize the Benefits From Your Recreational Vehicle Financing

There’s more to realizing your dreams and hitting the road for your new adventure than just buying your new RV, motorhome, boat, or motorcycle.

While Southeast Financial is the absolute best place to obtain your financing, there are additional insights that will help you protect your credit rating, ease your ability to pay and allow you to leverage your debt effectively while you’re out on the road enjoying your new purchase.

Here are a few critical considerations:

GET THE BEST INTEREST RATE

Whether this is your first loan for a recreational vehicle or just another one in a long string of loans, one constant is that you will want to find lowest interest rate and repayment terms that will easily fit into your plans. With Southeast Financial, we are engineered to offer you the most competitive rates and lowest minimum finance amounts to make sure we can not only fit into your monthly budget but save you from paying unnecessary interest over the life of your loan.

LOOK FOR A SIMPLE-INTEREST LOAN

When you finance through a dealership, be aware as you never know the type of loan they are offering.

Generally, dealerships like to control as many aspects of the buying process as they can from trade-ins to down payments and financing options. The more of these you control, the greater your success will be in negotiating a value-packed purchase that you won’t regret later down the line.

One key to this is to be sure you avoid any recreational vehicle financing that is not a simple interest loan. A simple-interest loan is one that requires monthly payments until the loan is repaid, without any prepayment penalties.This is the only type of loan we offer at Southeast Financial.

The monthly payments on a simple-interest loan repay a portion of the accrued interest and a portion of the principal (the amount you borrowed). This is especially important if you think you can pay off the loan early. This means you only pay interest for the time period you actually had the loan.

Other types of loans use standard amortization tables to calculate monthly payments at the beginning of the loan repayment period, and you agree to pay back the principal and full amount of interest for the entire repayment — period. Regardless of whether you repay it off early or not. Some loans even have early payment penalties, so stick with simple-interest loans to give you more flexibility down the road.

AVOID APPLYING FOR SEVERAL LOANS

Most borrowers don’t realize that each time a credit check is run on your behalf, your credit score takes a hit. This is because it sends a signal that you could be looking to run up a huge credit bill, even though you’re shopping for the best rate for only one item.

Southeast Financial will run your credit report, but only once. Since we know which banks and lenders will give you the best rate for your purchase, as well as the terms you are looking for, we can save you the legwork (and hits to your credit score).

In financing a recreational vehicle, there is no “one size fits all” approach. Different lenders will treat a motorhome differently than a loan for a motorcycle or horse trailer. So, let us do the shopping for you so you won’t have waste time filling out unnecessary applications and racking up hits on your credit report.

SAVE FOR A DOWN PAYMENT

A good rule of thumb is to be able to put down at least 10 percent of the purchase price of your vehicle, regardless if it’s a motor home, camper, RV, horse trailer, boat or motorcycle.

In most cases, you may not even qualify for a loan without this minimum amount. We encourage you to save up until you have enough for a down payment before even applying for a camper loan, especially with the depreciation you’ll experience the second you drive a new vehicle off the lot.

CONSIDER YOUR DEBT-TO-INCOME RATIO

If you’ve bought a home, you’re more than likely very familiar with this term and how it relates to your ability to repay a debt.

The same consideration should be applied to your decision to purchase a motor home, camper, horse trailer, boat or motorcycle. If your household’s monthly minimum debt payments are very high compared to your monthly gross income, you may not be able to qualify for a loan with low rates and flexible repayment terms. It’s best to work on reducing your debt first allowing you to shift what you were paying for old debt to any new loan.

CONVENIENCE IN PAYING

The whole idea of buying a recreational vehicle is to enjoy the freedom they offer.

However, if you choose a finance company or bank that requires you to mail a check or pay at a branch or location, you’re really defeating the purpose of purchasing a recreational vehicle. Make sure you select a company that provides easy online payment through their website or an app. That way, you can make a payment any place that has cell coverage or internet access.

Of course, the Southeast Financial website is available 24/7 with not only payment options, but a full range of customer service features.

Feel free to use the loan calculator located to the right to help in planning the amounts you can afford and check the interest rates here frequently to ensure you have the absolute best loan. When you’re ready, just click the ‘Apply Now’ button on any of our pages.