Bad Credit RV Financing
At times, bad credit RV financing may help an individual to get back on the path towards responsible financial practices and a favorable credit score. This seems like a tall order, especially when a person with a poor credit history begins searching for funding options. Terms set by banks and other traditional sources of funding may discourage customers who are trying to purchase a new or used recreational vehicle (RV). Some restrict product selection to a limited type of vehicle, or have unreasonably high interest rates. Many financial institutions are not equipped to offer loans with the same freedom as online institutions or an RV dealership which has had experience dealing with customers with poor credit ratings. Once a person has had credit problems, it may seem to take forever for these to get straightened out, but there are options which may be pursued so that the dream of owning a recreational vehicle becomes reality.
Surprisingly, a person can obtain bad credit RV financing. Part of this is due to the fact that, in general, RV owners are a responsible group. They have a default rate of less than 2%, so lenders are able to offer lower interest rates on loan products. Some companies have over twenty years of experience in dealing with customers regarding bad credit RV financing. They understand that nearly everyone goes through distressing financial times at least once in their lives. Situations beyond one's control such as illness or natural disaster can wreak havoc on the financial status of a normally responsible individual. Lenders are especially willing to work with a customer who has had a single episode of financial difficulty. Those who have had repeated setbacks in major areas such as mortgage payments or car repossessions will need time to repair their rating status.
Even with an occasional episode of falling behind in payments to creditors, bad credit RV financing may still be available. As an individual makes on-time payments and pays off this loan, his or her rating will improve. At that point, the customer will have opportunities to refinance the loan to a better rate. Sometimes, even bad credit RV loans have better interest rates than other types of loans available for such customers from other institutions.
Many factors influence the interest rates which are available to a borrower. These include the loan amount, the finance terms and an individual's credit history. Finance terms may vary according to the length of the loan. Short term loans of amounts ranging from $10,000 to $99,999 will usually be financed for somewhere between 7-15 years. Loans for amounts over $100,000 are given a longer term -- perhaps as much as 20 years. The downpayment which a customer is able to put on the purchase of the recreational vehicle may have a significant impact upon the interest paid over the life of the loan. Most lenders require at least 10% down, although for bad credit RV financing, one would be wiser to have about a 30% downpayment so that a relatively good interest rate can be negotiated. Use an online loan calculator to help determine which time/price/downpayment combination will yield the best results. Notice the great difference in overall price which can be obtained with even slight changes in loan variables.
One must also determine whether the loan will have a fixed or variable rate. These loans are self-explanatory: a fixed-rate loan is one in which the interest rate is set at a certain level for the life of the loan, while a variable loan's interest rate will vary according to changes made in rates by the Federal Reserve or by a bank adjusting its portfolios in reaction to economic conditions. Although the variable rate loan may be tempting because (at least initially) these usually have a lower monthly payment amount, a fixed rate is generally a better deal over the long haul. Interest rates change, and it seems that they move most often in an upward direction! Also, having a fixed payment can make budgeting for such expenditures easier, which is especially important if one has been trying to correct past problems and keep purchases on track. The runaway train of a suddenly-ballooning payment is the last thing a person dealing with bad credit RV financing wants to experience. This could derail the whole process of credit repair.
Some customers prefer to be pre-approved for a loan before they even begin to shop for their recreational vehicle. In this scenario, the loan amount, terms and interest rates are already negotiated beforehand. This option gives the customer more control over negotiating for the best price, for a person knows exactly how much money will be available. One may even find oneself in the situation described by the writer of Proverbs 20:14: "It is naught, it is naught, saith the buyer: but when he is gone his way, then he boasteth." Once the buyer accepts the loan terms it can be from 1-5 days before the money is in hand. The option of having loan payments deducted directly from a bank account is easily set up, and may sometimes result in additional discounts. Note that dealers will require evidence of RV insurance at closing.
A buyer who needs bad credit RV financing can easily locate the same with an Internet search, or by speaking with loan financing agents at a RV dealership. The loan officer will request certain personal information, and ask questions to determine the best loan product for each individual's particular situation. When terms are agreed upon, the matter will be submitted to the lending organization for approval. The approval process is generally quick, although it may take several days to receive the money for the RV purchase. Even with bad credit RV financing, it is possible to purchase a recreational vehicle which may be paid off in a reasonable amount of time, and enjoyed for years to come.