Used motor home financing information
When it comes to buying a recreational vehicle (RV), loan is a better alternative to shelling out hard cash. If you are looking for used motor homes for sale, you will be happy to know that financing is available for both brand new and used models. Given a vast array of options, zeroing in on a particular lender, and deciphering the fine-prints of the loan contract can often be overwhelming. The information below will come handy in landing a good financing deal at competitive rates, and with flexible terms.
RV-financing is a stringent, credit score-driven procedure. The lender will run a credit check before approving the loan. Before you apply for a loan, obtain a copy of your own credit report. It will act as a good eye-opener to understand whether you are in a position to pay off a loan or not. In addition, it will let you rectify any misinformation on your report in advance, and avoid embarrassment.
Fair Isaac and Company (FICO) score has become an integral part of any loan-sanction procedure in the US. This tool is designed to provide a complete picture of an individual’s personal finance status through a single score. The factors that are considered include a candidate’s employment history and the duration of his/her stay at the current residence, among others. Expect to get a low score if you have a history of bankruptcy or defaulting on mortgage payment for an asset.
Long Term Versus Short term:
Any vehicle is a depreciating asset and for used motor homes, the depreciation rate is much higher. A long-term loan will keep you tied to a payment obligation for a considerable amount of time, with an outstanding amount, which is greater than what your dated rig is worth. Therefore, when it comes to pre-owned RV-financing, always go for a short-term (less than five years) program. Before finalizing the deal, make sure you lender will not charge any pre-payment penalties, in case you choose to pay off your loan early.
A number of banks, credit unions and other financial institutions offer loans for used motor homes at competitive rates. You can even obtain direct financing from your motor home dealer. Many dealers have tie-up with lenders, so they help you get a loan in a hassle free manner. Research well before you sign a loan contract – compare between several dealers and their packages. In normal circumstances, an RV-loan gets approved within a day or two after the application is received.
There is one very strong reason to choose financing over cash-down and that is tax advantage. A fully self contained RV, which offers basic sleeping, bath and kitchen facilities is considered a second home and therefore qualifies for tax exemption. For detailed information regarding tax cuts on RV loan interest, refer to the website of the Internal Revenue Service (IRS), the revenue service department of the United States federal government.
Financing your motor home allows you to acquire your home-on wheel without making a dent in your savings, all the while enjoying some cool tax cuts. While trying to find out the best financing deal for a well-maintained used motor home for sale, do not, however, let too many lenders run a credit check, as it is likely to hinder and delay the loan approval process.