Have you and your family been dreaming about exploring the great outdoors in a bunkhouse RV? This is a great year to make it happen! Nationally, fuel prices are low and are projected to stay that way for a while. Finance rates are also low, and that can make your bunkhouse dreams an affordable reality. But before you sign on the dotted line, do a little research – it could save you hundreds or thousands of dollars over the life of your RV loan.
Find the Bunkhouse RV that Fits Your Family
Bunkhouse RVs are ideal for family camping adventures because they feature bunk-bed style sleeping which maximizes usable floor space. They can be used to store gear by day and tired campers at night.Before you decide which model is right for you, look at your needs now and down the road. Will your camping family be growing – perhaps with kids, grand-kids, or friends? Will it be shrinking with kids going off to college? Or will it stay the same over the length of time you plan to own the RV? These are important factors that will have an impact on your RV choice and your budget.
Know Your Limits
How do know how much RV you can afford? Start by examining your monthly income and expenditures.That should give you an idea of what kind of monthly payment you can fit into your budget. But remember, there will be upfront fees as well. You’ll be paying the down payment, taxes, and title fees upfront, and you’ll also need to have insurance before you drive it off the lot.You’ll also have to factor in the cost of fuel for your journeys. You may also want to consider keeping a “slush fund” for maintenance and repairs as many road-savvy RVers do. RVs are an investment, but they’re one that pays off in fun, adventure, and great memories.
Check Your Credit
Before you do any serious RV shopping, check your credit rating – ideally 6 months in advance. You can get a free copy of your report from each of the three nationwide reporting agencies every 12 months from annualcreditreport.com. Or you can contact the credit bureaus individually: Equifax Credit Information Services: 1-800-685-1111, Experian: 1-888-397-3742, TransUnion Corporation: 1-800-916-8800. Note that it’s important to check your report from all three bureaus because lenders usually can pull credit scores from any of these agencies, sometimes it is based on underwriter preference, sometimes it is based on geographical location. Errors on just one report can affect your interest rate – and your monthly payment – even if the other two reports are accurate.
If you’ve checked your credit report and you’re not happy with what you see, you can improve your credit score. First and foremost, pay your bills on time; it has a big impact on your credit score, so be particularly careful not to miss any deadlines before you start applying for your loan.Don’t open or even apply for any credit cards. Lenders look at “credit inquiries,” which show that other lenders have asked for your credit record and indicate that you might be about to take out a lot of new debt. Inquiries made within the past several months could mean you’ve taken on new debt that hasn’t yet been reported.
On the other hand, you shouldn’t close any credit cards during this period. Almost 30% of your FICO credit score – the one most lenders rely on – is based on the amounts you owe, including how much of your available credit you’ve used (called your “credit utilization ratio”). If you close a card that has a high credit limit but keep your balance the same on your other cards, it will look as if like maxing out your available credit, which can hurt your score.
Instead, start paying down your card balances with the goal of getting to a zero balance. If you have to add new charges, keep them to 10% or less of your available credit, whether or not you pay off your credit card bill in full every month. Once you do start shopping for an RV loan, keep your loan inquiries within a 30-day range. If you inquire about loans over a longer period of time, that could negatively reflect on your FICO score because it appears you may actually be taking out multiple loans.
Weigh Your Options
The two most popular ways of securing a loan for your bunkhouse RV are through direct lending and dealership financing.
In direct lending, your loan comes directly from a bank, finance company, or credit union. One of the benefits of direct lending is that you can shop around for loans and speak directly with lenders about their credit terms. In addition, you’ll know about your credit terms in advance, so you’ll know how much RV you can afford even before you start shopping. It’s good to note that sometimes direct loans may not be specifically for RVs may have a shorter term, and are less flexible than a RV-specific loan.
In dealership financing, you obtain a loan through the dealership. The dealer will review your debt profile and repayment history, and match you with a couple of lenders. From there, the dealer will work with the lenders to secure the approval amount and terms.With dealership financing, you’ll usually get:
- Convenience. Dealers offer vehicles and financing in one location and may have extended hours, like evenings and weekends.
- Multiple financing options. The dealer’s relationships with a variety of banks and finance companies may mean it can offer you a range of financing choices.
- Special purchase programs. Dealers sometimes offer show & special event rate discounts.
Financing through RV Wholesale Superstore is quick and easy, and our rates are competitive with other lending sources. Fill out our loan application, and we’ll do the rest of the loan legwork for you!
Put It All Together
No matter who you choose for financing, getting a loan will involve some paperwork. But you can streamline the process by getting your information together in advance. Typically, you’ll need the following:
- Name (Government ID Card of some sort)
- Social Security number
- Date of birth
- Current address
- Previous address(es) if you’ve lived at your current home less than two years
- Length of occupancy at each residence
- Current employers
- Previous employer(s) if you’ve worked at your current job less than two years
- Length of employment at each job
- Additional sources of income
- Total gross monthly income
- Financial information on current credit accounts, including debt obligations
- Tax returns may also be necessary if you are self-employed (usually two years)
You’ll also need a down payment. The typical down payment for an RV loan is about 10%. Remember, most lenders do not have a penalty for paying off your loan early, so do your research and find out the best possible down payment/rate/term combination for you! Learn more and see some examples of rate/term combinations in our eBook.