Financing an RV travel trailer is just about the same as financing a car. Consequently, almost the same things that you consider when you want to locate a lender to finance your car buying venture are the same that you would consider when you are buying an RV trailer. And this does not only apply to the luxury RV trailer, but it also applies to the common variety. Do not be duped into thinking that there is no difference between purchasing your trailer from a dealership and RV financing.
In essence, there are two kinds of financing that you can undertake for your trailer. One of them is the long term and the other is the short term. While many people would argue that short-term financing is better than long-term, perhaps it depends on the amount of money that you can be able to spare at any given moment for the payment.
Long-term RV travel trailer financing usually goes for about 20 years and this is mostly for trailer costs that are from $ 100,000 and above. The short-term financing is about 15 years and it is from costs that start from $ 20,000 to $99,000. Note that the general rule in the market is that you should be able to finance at least 90% of your trailer financing, that is, the buying price.
Before you go to look for financing for that luxury RV trailer that you have invariably desired, note that the lenders will be very keen to know your credit history so that they can determine how creditworthy you are. The factors that are considered here are credit history, credit score, and repayment history.
If the lender or financier decides that you are more of a risk than an asset to him, you are going to get very challenging conditions for your loan and higher rates. Nevertheless, if your credit history is good and your credit score is high, then you are going to get very soft terms for your loan and low rates. Simply put, the more of a risk that you are to a lender or financier, the higher the rates of the financing loan repayment that you will get.
How much can you pay as a down payment and what is your capacity to pay off the monthly payments? These are also some of the factors that you should consider before settling on a long-term or a short-term loan. If you plan to sell the trailer off shortly, it is to your benefit to go for a long-term loan as you will be able to build more equity and can still get good value for your luxury RV travel trailer when you do sell it. Just consider your capacity to pay the hefty down payment as well as the monthly payments.
In the loan market, it is a well-known fact that the most useful way to improve your rates is to go for a short-term loan, pay a large down payment, and expend big monthly payments.
