Sound like a good deal?

thomasmnile wrote:
In my experience a retail bank (especially the major banking chains) don't give a better interest rate than a car or RV dealer. Credit unions may be able to offer lower interest rate but that comes with larger down payment requirements and shorter loan terms than dealer financing can offer.

Much we don't know about the OP's situation financially though he did acknowledge some significant factors about income and employment. The dealer offer on the RV he was offered might be the best he can get. Since it's a simple interest loan offer, he can always accelerate the payments if he can afford to and pay the loan early without penalty. Our last RV purchase was financed for 15 years, we paid it off in 7.

Longer loan terms tend to have HIGHER INTEREST RATES, especially more so with HIGHER RISK LOANS like a RV. It is something to take into consideration especially with a RV which in 5-6 yrs has nearly zero resale value when compared to what it was valued at the time of purchase. Not to mention a 15yr loan you ARE paying the majority of interest back on the loan in the first 2/3rds of the term.

Paying off early can save money provided you consistently pay extra towards the PRINCIPLE BORROWED every month.

Best bet as always is to take THE SHORTEST LOAN TERMS you can afford easily THEN add extra payments towards the PRINCIPLE (you MUST SPECIFY this otherwise they apply the extra to BOTH P & I).

Bought a house on a 15 yr mortgage, payed extra towards the Principle every month, paid off in 11 yrs saving a considerable amount in interest.

All of our vehicles we take a 5 yr loan and pay it off in about 2 yrs..

We also do not go for top feature/gadget load high dollar stuff either, we buy well below our means in order to keep from needing long loan terms. That is where mortgage amortization calculators are your friends.

Very wise use of credit..

RV dealers like auto dealers and even realtors love folks who have no real knowledge about loans or finances which is why they tend to find a sweet spot in your payment comfort levels.. Then they will simply extend the length of your loan to work out the payments to your liking..

Favorite line is "what payment amount do you want"..

OP, Sorry for derailing the thread..