How to get a loan for RV
Looking at all the forums, none are a perfect fit so will ask here, my apologies if not the best sub-forum. Trying to figure out how much I can get in a loan. I need some help with loan basics as ...
Forum Discussion
Sorry for the ramble but here goes:
Debt load - the sum of all the money you currently owe - is used to calculate your income to debt ratio. The sum of your total income from all sources divided by debt load = your income to debt ratio. Lenders usually like to see an income to debt ratio lower than 40%. Other factors come into play that add to a lender's risk of lending. FICO is one. The lower your FICO the greater the risk to the lender. This will result in a higher rate. When buying RV's it gets a little trickier as RV's are a heavily depreciating asset. Most lenders won't finance anything older than 10 years - and the older the RV, the higher the rate. This offsets the loss in value in their securitized asset - the RV. In other words, the older the RV the less it's worth and they can't get all their money back if they have to seize and sell. So they offset that risk of loss by charging higher interest and greater down payment from you.
Get your FICO score. Any of the credit scoring agencies (Equifax, Trans Union etc) will offer one for free per year. Calculate your income to debt ratio - how much can you reasonably afford?
Banks aren't in the habit of willy nilly telling you how much buying power you have. That's because it's heavily dependent on the exact thing you want to buy and it's value. Example - you might be able to buy a $200k house, but only a $20k RV. The amortization as well as the value of the asset secured against the loan is very different. If you find an RV you like and you think you can afford, approach the bank and ask for a "soft pull" for approval. They can tell you with limited information if they think you'll qualify without impacting your credit scores. Most banks do this now as common practice.
Lending is HIGHLY regulated and there are processes the banks have to follow to provide you with accurate information and they can't do that without actually following a due process. Several laws in place protect the consumer from false and misleading lending practices - this means they can't say "we think you might be able to buy that". They have to provide factual information based on real values from you, about you, your income and the asset you are buying. It's a pain I know, but those laws and practices are in place to protect you.
Debt load - the sum of all the money you currently owe - is used to calculate your income to debt ratio. The sum of your total income from all sources divided by debt load = your income to debt ratio. Lenders usually like to see an income to debt ratio lower than 40%. Other factors come into play that add to a lender's risk of lending. FICO is one. The lower your FICO the greater the risk to the lender. This will result in a higher rate. When buying RV's it gets a little trickier as RV's are a heavily depreciating asset. Most lenders won't finance anything older than 10 years - and the older the RV, the higher the rate. This offsets the loss in value in their securitized asset - the RV. In other words, the older the RV the less it's worth and they can't get all their money back if they have to seize and sell. So they offset that risk of loss by charging higher interest and greater down payment from you.
Get your FICO score. Any of the credit scoring agencies (Equifax, Trans Union etc) will offer one for free per year. Calculate your income to debt ratio - how much can you reasonably afford?
Banks aren't in the habit of willy nilly telling you how much buying power you have. That's because it's heavily dependent on the exact thing you want to buy and it's value. Example - you might be able to buy a $200k house, but only a $20k RV. The amortization as well as the value of the asset secured against the loan is very different. If you find an RV you like and you think you can afford, approach the bank and ask for a "soft pull" for approval. They can tell you with limited information if they think you'll qualify without impacting your credit scores. Most banks do this now as common practice.
Lending is HIGHLY regulated and there are processes the banks have to follow to provide you with accurate information and they can't do that without actually following a due process. Several laws in place protect the consumer from false and misleading lending practices - this means they can't say "we think you might be able to buy that". They have to provide factual information based on real values from you, about you, your income and the asset you are buying. It's a pain I know, but those laws and practices are in place to protect you.
