Here are some helpful tips before your submit a Credit Application:
1) RECREATION TYPE LOANS - RV Loans can be more difficult to get compared to a home mortgage or car loan. Most RV Lenders or banks have stricter requirements for recreation type loans. Tax returns or a pay stubs may be required for proof of income.
People who are SELF-EMPLOYED will need to provide a current PFS (Personal FinancialStatement) and 2 years tax returns (NOTE: These returns MUST match stated income). Loans for Self-Employed people can take 3-10 extra days for an approval from the RV lender.
People who are FULL-TIMERS (with no permanent physical address) or those wishing to title the RV in a Business Name (or any type of LLC) are finding it very difficult to obtain RV financing. At this time, we do not represent any banks offering these types of loans.
2) KNOW YOUR SCORE! (PLEASE NOTE: For every 20 points below an 800 score, your interest rate can go up as much as .25% to .5%).
To get your FREE credit report, the FTC has a site www.AnnualCreditReport.com that allows you to access you credit report, for each of the 3 credit bureaus, one time per year. To get your score, you will have to pay extra, some as low as a $7 one-time/flat-fee or they will give it to you if you sign-up for their monthly monitor fee.
To find out your credit score for FREE, we suggest using sites such as www.creditkarma.com . (Credit Karma, part of TransUnion, is very safe and has been recommended by consumer advocates, such as Clark Howard (no relation). Credit Karma does NOT require a Credit Card to sign-up or any type of fee, but will require that you to sign-up for a completely FREE Login/User name, checking your credit score, there, does not affect your score, and you can check your score every month, if you desire). However, this score may not be the same that the RV Lenders will use. NOTE: There are many types of Credit Scoring models that are used by lenders. (Examples: FICO, Beacon 5.0, Auto 9, and more.) Credit scores can vary +/- 35 points through the three different credit reporting agencies.
3) BE CAREFUL BUYING AN RV, or anything you plan to finance, only give out your credit information when you are ready to buy. Too many credit inquiries can reduce your Credit Score, and this will affect your Interest Rate.
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Why Finance Your RV?
When you finance your purchase instead of liquidating assets or paying cash,you maintain your personal financial flexibility. Plus, your RV may qualify for some of the same tax benefits as a second home mortgage. Of course, check with your tax adviser, but basically to qualify for these benefits, such as the deductibility of interest on the loan, the RV must be used as security for the loan along with providing basic living accommodations such as a sleeping area, bathroom and cooking facilities. Remember, the RV is considered a qualified second residence as long as you designate it for each tax year.What Are the Advantages of Financing Through a RV Lending Specialist?
Down payments are lower - Although final terms are determined based on your credit profile and the age, type and cost of the RV being purchased, financing through RV lenders usually requires down payments in the 10%-20% range.
Finance terms are longer / Monthly payments are lower -Because RV finance specialists know that RVs maintain their value and resale appeal, they tend to offer more attractive terms. In fact, it's not uncommon to find 10-15-20 year repayment schedules to help you afford the RV of your dreams.How Does RV Financing Compare With Other Payment Options?
Borrowing against an owned home is not an option unless the money is used directly for that home. Home mortgage interest deduction is restricted to interest paid on mortgage debt used to purchase or improve a residence, or to refinance the remaining balance on a purchase or improvement. The purchase of an RV, therefore, does not qualify for this deduction. Home equity loans limit the amount of interest that is deductible, if your RV loan balance exceeds $100,000. Home mortgage interest deduction is limited to interest paid on home equity loans up to $100,000.The Last Word on RV Financing
Your RV might actually cost you less in the end if you finance your purchase. By not tapping into your financial assets to purchase the RV,you can take advantage of attractive new investment opportunities that might come along and the earnings from those investments can potentially exceed the cost of your RV financing. The bottom line is that if you are thinking of buying an RV, you should check financing options to maximize your purchase enjoyment. You'll be on the road enjoying your new RV before you know it!Information provided by GoRVing.com