Did I make a mistake in Financing? How long do you finance?

[yankeeslover]

oh boy....stupid me.... purchased my camper last summer... 2014 primetime rv... first camper ever... I didn't know any better... none of my family members nor friend camp or own campers so this was my wife and I sole decision...anyways, stupid me, not knowning any better financed this camper for 12 years... I didn't know any better.. spoke to my credit union for the financing and they told me most people finance these for 12-15 years..
I admit, I should have researched more, but I didn't... has anyone else made a big boo-boo like this? and no, I cant afford to double up on my monthly payments right now to pay off sooner... do these campers with proper care, generally last this long? I don't want a camper breaking down in two years with ten more years of payments...how bad are they to trade in? do they depreciate just like a car?
I know its all too late now and we cant change this, but im just wondering if anyone else has ever made a boo-boo like this and financed the camper this long? or am I the only poor sole...LOL

[Rob_Mitch]

yankeeslover wrote:
M GO BLUE.... I pay roughly $225.00 per month...If I divide by 12 that comes to $19.00...if I pay $20.00 more per month, what will this acchive? will that even put a dent in what I owe? im just courious...... thanks...

With what figures you gave it looks like (to me at least) that $20. a month would cut two years or more off the life of the loan.

[Merrykalia]

Does your loan allow for extra money paid each month to go toward principle? If it does, pay an extra $20 each month to go toward principle and that will get it paid off quicker. If not, just put back that $20 until you have enough to make an extra entire payment, maybe one or two per year.

Most campers will last 12 years if taken care of. Ours is now 6 years old and is still a very nice RV with many more years left in her. She will be paid off in another year and a half.

[zesty]

yankeeslover wrote:
M GO BLUE.... I pay roughly $225.00 per month...If I divide by 12 that comes to $19.00...if I pay $20.00 more per month, what will this acchive? will that even put a dent in what I owe? im just courious...... thanks...

Yes.

It really doesn't matter how much extra you pay. Anything you pay above your payment goes straight to the principle. Most of your payment is just paying interest right now. Anything over that amount, especially at the start, makes a huge difference in the long run. The less you have in principle, less interest gets compounded, the quicker you pay it off, the more money you save.

Make sure it is applied to principle!

I always pay $50 extra on my home loan. It's knocking years off the payoff.

[gmw_photos]

I've only skimmed through all these posts, so perhaps someone else has mentioned this. To the OP, you may want to consider that for a large part of the time of this loan, you will likely be upside down, so think about the insurance situation should you be unfortunate enough to have a major loss on this trailer ( accident, theft, fire, tree falls on it, etc ).

[spike99]

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Not too sure why some folks didn't like my above reply. Lecture??? Not at All. Living under my financial means and working 2-3 jobs works for me. And, using pre-owned stuff (even clothes and shoes, vehicles and RVs) is the secret to long term financial stability. Even if living within lower middle class income.

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Options for OP.

Sell the trailer, recover as much "cost recover" as one can and pay off what one still owes on it.

View it as Lessons Learned and never impulse buy again. Remember… If life was like a baseball game, each of us has swung at bad throws. Think of this one as a bad throw (with one's wasted swing) and simply keep moving forward in life…

If camping is still your thing, then buy (replace) with much lower cost pre-owned camper. Something that is affordable. Especially for "a box" that only gets used a few times a year….

My 1st camper was $5,000 (paid cash). We enjoyed it as much as our current 29ft TT. Going back to very low cost 19ft TT wouldn't bother me at all. Size and year doesn't matter to me. Simply buy what one can afford and enjoy. That's what life is about.

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[Reader1]

Yankeeslover - You sound a lot like me. I am terrified of debt. (I should tell you how I handle electric and gas bills if you want a good laugh!) We financed our small 5th wheel for 15 years, only because I was afraid of what would happen if we could not make big payments. We put a lot down on it, and I paid it off in a little over 2 years because we were financially in a position to do that, but I understand your concern. I agree with someone who said that if you want to, make double principal payments when possible if that makes you feel better. We are all different, we all have different financial issues so there is not one way that works for all. Enjoy your RV and the memories you will make.

[2012Coleman]

OP wrote:
not knowning any better financed this camper for 12 years... I didn't know any better.. spoke to my credit union for the financing and they told me most people finance these for 12-15 years..
I admit, I should have researched more, but I didn't... has anyone else made a big boo-boo like this? and no, I cant afford to double up on my monthly payments right now to pay off sooner...

I don't understand - first you seem worried about financing for 12 years, then you say you cannot afford to pay more each month. So if you got financing for say 5 years, your payment would be more which you can't afford anyway. And of course the credit Union advised you to pay for 12 years - think of all that money you will be giving them in interest - it's in your contract.

And if you can afford to pay more in the future, then either do so, or refinance.

Since you can only afford the payment that comes with 15 year financing at the moment, it's a moot point.

Just make sure you get all the issues fixed while under warranty and then take very good care of it. Now go camping and stop worrying about it.

[JesLookin]

bid_time wrote:

beemerphile1 wrote:

bid_time wrote:

JesLookin wrote:
Financing for 12 years is OK. Figure out what the payments would be to pay it off in 6, 8, 10 years & make those payments and pay it off early. OR - Our local credit union has loan sales a couple times a year where you can refinance your camper at a lower rate.

Why do you suggest with no information to pay it off early? I financed mine for 12 years at 5.55%. Over those same 11 years now, my investments earned 8.08%. One size fits all advice don't work.

Maybe because the OP is obviously stressing over the twelve year payback period. The OP asked for opinions.

He also said he can't afford to double up on payments and pay it off sooner. One size fits all advice still doesn't work. You don't even know what interest rate he is paying - that would be a beginning point at the very least.

The OP is asking for opinions. I gave him some ideas. If he doesn't like my ideas he can ignore them or let me know. I don't need anyone else that didn't give any alternate ideas telling me my ideas suck.

Also he doesn't have to double his payments to pay off early, a few extra dollars go a long way on a long way to payoff term loan early.

Now excuse me, I'll keep my ideas to my self.

[Rob_Mitch]

OP, try this amortization calculator and put in your numbers and extra payment amounts each month. you may see that adding even an extra $50 per month when possible may take years off of your loan. Run a lot of different numbers through it and it can be an eye opener. also look up other similar calculators and try them.
link

http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx?ec_id=m1024923&s_kwcid=AL!1325!3!41196398408!e!!s!!loan+amortization&ef_id=Uw0z5QAAAB9ietPP%3a20140324164154%3as

[12thgenusa]

At 5% interest you could keep the same payment, drop the term from 15 to 10 years and save over $13,000. Hopefully, your existing loan doesn't have a prepayment penalty.

[yankeeslover]

M GO BLUE.... I pay roughly $225.00 per month...If I divide by 12 that comes to $19.00...if I pay $20.00 more per month, what will this acchive? will that even put a dent in what I owe? im just courious...... thanks...

[12thgenusa]

I don't know your credit rating or what financial institutions you have available, but my credit union is offering 12-year RV loans (new or used) at 5%. You might be able to refinance at a lower rate, shorten the length of the loan and/or lower the payment. In any event, enjoy your RV.

[ddschuman]

yankeeslover wrote:
I am the original poster and I just looked up my loan again...Oh boy... checked my interest rate... its a whooping 9.99% and was for 15 years, not 12... maybe I got taking for a ride, maybe this camper ends up costing twice as much... but you know what? im gonna have fun... im not gonna sweat it... I can afford the payment..

It is still new enough that you may be able to get lower interest rate somewhere else if you refinance. With a lower interest, perhaps you could finance for either a lesser term or lower payment that would afford you to pay more towards principle from time to time. I get things all the time in the mail from Good Sam offering to refinance my rig. I have never checked into it but my interest is already relatively low. If I had 9.99%, I might at least entertain the offer. Do what works for you. It is ultimately your money and your camper...enjoy!

[kalynzoo]

Your not stupid nor is it a stupid question, but a very personal question requiring an individual response. To start, what is the interest rate? What will you be able to do with the money not being spent on the RV when the payments are kept to a minimum? And remember, if you find your economic situation improves greatly or unexpectedly, you can always pay down the loan early. Just one example..by taking a 15 year loan you maintain extra cash on hand for the children's college.
Talking with a good financial advisor is sometimes useful...not the guy offering you the loan, but your accountant, you broker, or a learned friend. Let someone take the role of devil's advocate, and come to the best solution for your situation. If you already signed for the loan, no real problem, you can always refi.
Happy Trails.

[M_GO_BLUE1]

Take your payment and divide it by 12...then add this amount to your payment every month