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

[Gdetrailer]

Passin Thru wrote:
You can make a regular payment on the 1st and half on the 15th and specify that all of the 15th will go to paying off the principle. However, you can write off the interest on an RV so what is the worry here?

Interest on $21K loan is $2K for the first year, that "write off" as you say for tax purposes only REDUCES your earned income for the FEDERAL income tax and only by that amount.

Does not apply to state, local town or even school taxes depending on where you live..

Not sure how this works now days but back when I had a mortgage and was paying $2K or less in interest it saved me less than $100 on the fed taxes (I got back less than $100 more than if I would not have claimed it)..

Additionally now days the standard deductions most likely will be greater than any supposed savings you might get with claiming a RV unless you have bunches of things to itemize..

In a nutshell, paying down the loan and reducing the interest paid in the long run is far better than worrying about any tax "write offs"..

Now if it was say a $100K or better motor home then the interest most likely could exceed the standard deduction but that is a guess..

Only a tax preparer can tell you for sure and the OP SHOULD be relying on a professional instead of web based hearsay..

[loulou57]

Did the OP make a mistake buying the RV...I don't think so

Is the OP paying too high an interest rate...we don't know his credit history

Did the OP make an impulse buy....maybe

Did the OP understand what he was getting into....probably not. From his posts he first made, the interest rate he thought he was paying was wrong and the length of the loan was longer than he thought.

My thoughts, pay any extra you can on the principal or see if it can be re financed at a lower rate.

Whatever happens enjoy the unit but take this as a lesson learned. Make sure you read and understand everything you are committing yourself to. When you go to buy a toy, go home and sleep on it.
Impulse buying is so easy when we see a new shiny toy just saying... I am yours for only $?? dollars a month and a salesman on commission with a calculator telling you that.....you can easily make the payment.

[Passin_Thru]

You can make a regular payment on the 1st and half on the 15th and specify that all of the 15th will go to paying off the principle. However, you can write off the interest on an RV so what is the worry here?

[winnietrey]

It seems to me, from reading the OP's posts ( if I understood them correctly)

he is in pretty deep on his toys. ( as in tapped out on a monthly basis)

That all works, making payments etc, until one little thing upsets the apple cart. As in an unplanned expense. Be it medical , or the fridge blows up

Me personally I would rather have fewer toys, and more money in the bank to cover,

those expenses in life that always come up. Much less stress for me

[Heavy_Metal_Doc]

I would not call financing anything a "mistake" as long as the borrower knows what they are getting into and is comfortable / prepared for it.. I have bought stuff on financing many times where I could have paid cash and not paid any extra in interest / loan fees, but those costs where low enough to be a good insurance to me against having no cash on hand for the things you can't finance or don't come with nearly as good of financing options.
I have our TT on a 15 year loan just for that off chance that stuff goes so badly one month I only want to pay a tiny payment. The bank has pre-printed blanks on the payment form for additional principle, so I don't think paying extra is any sort of a bad idea and I am comfortable that the extra will have it paid off in 6 years or less.

[Gdetrailer]

sherpaxc wrote:
So I have to admit I'm one of the people that got this conversation going and as I sit back in my computer chair I have to laugh. It is so easy to stir the pot on here. Some people can be way to passionate on the internet.

Anyway, the OP actually proved my originally point. I'll say it again. A loan (debt) isn't the worst thing in the world when managed wisely. We can all agree on that I think. What is bad is when that debt is compounded by more debt, then more.

Yes, the OP can afford his current 15 year loan. But he admits he also took a loan out on a truck AND on a snow mobile. This is our America today. A buy today and worry about it later society. I don't think the OP (and many people) realize how much INTEREST he is paying with all these loans. It would probably make him sick.

I stand by my statement. Sell it, cut your losses, get your savings built up, then buy something used and less expensive. It is a hard pill to swallow, but I think it is the right pill.

I feel for the op. I've been there for sure. It was a big mistake and I lost money. But since then I've learned a great deal about financial freedom.

I also agree with most of the Dave Ramsey stuff. He has very good intentions and does a great job helping people like me who AREN'T financial genius's make sound decisions. His word isn't law, but it's good nevertheless.

You make a lot of valid points by saying to sell it and take you lumps BUT, in many cases doing so is not really warranted so it would not be ideal for everyone.

Near as I can tell, the OP HAS the income to support payments on all three items (that is a good thing). So basically the OP is not struggling to make the payments or pay other bills (that is a good thing).

From what I see the OP is concerned that:

#1 they have a loan of too long of a term (I would agree).

#2 They will pay too much interest for the trailer (I would agree)

OP is simply asking how best to manage paying down some of this debt (I would agree that paying down is a wise thing).

Selling off at this point in time will actually not be a good idea for these reasons:

#1 OP would most likely have to take out another loan to make up for the upside down loan balance.

#2 OP would most likely have to take a personal loan to make up for short fall(typically banks cap or limit the dollar amount borrowed and the lenght of payback on personal loans pretty low and will have possibly higher than 9.9% interest rate due to no "collateral" which may cause the OP to be paying a higher payment and have no trailer to show for it)

#3 If OP has a home, they could possible take a loan out on the "equity" but that further ties up their home in debt or may not have enough equity or even don't have a home (IE rent).

#4 no matter how you slice it, they owe MORE than the trailer is worth on the used market and they WILL be paying on a loan just in order to make it go away..

#5 OP most likely CAN "manage" their current debts without the "need" to unload the trailer, just needs to figure out where to start, create a workable plan of attack then stick to it.. That is why I have suggested they seek some local advice from a real Financial adviser.

I personally feel that cash is "king" but there ARE times in life where a loan (debt)is not a bad thing provided that you maintain control of that debt.. Allowing debt to take control (IE buying too many unneeded things on credit) is where it all goes wrong.

[Gdetrailer]

bid_time wrote:
Dave Ramsey is a joke.

:R

Boy did this thread take a tumble into the darkness and it only took 11 pages to do so.. got a feeling it will hit the moderators cutting room floor quickly :S

The OP was looking for some helpful insight to a real problem.

[Gdetrailer]

Yankeeslover writes “heres a questions, while we are at this...once again, im the OP... not only do I have this RV loan, I also have auto loan and a snowmobile loan..(3 years left on the snowmobile loan)... which would make more sense to try to make extra payments on? the rv is the longest term and higher interest.. would it be smart to add as much on that as possible, or try to pay off the snowmobile loan which is the lowest rate and soonest to being paid off..which would save more money in the long run? I would love to pay off snowmobile, then take that full payment that I was paying for that and apply that full payment each month to another loan...and when that's paid off, take both those payments and apply to another...”

Ouch.

That is a very hard personal call to make..

I would say that you are absolutely on the right track in wanting to pay off at least one of your loans and applying the amount you would have been paying on the old loan to one of your other outstanding loans..

For this, I stand up and applaud you, you “get it” so to speak..

Typically I would go for paying off the shortest term high interest loan first which would free up some cash quicker which then could be applied fully to the next loan or split between other long term or high interest debts..

But perhaps in this case if the snowmobile loan is the shortest term loan you have it might be good to pay it off early freeing up some cash to apply to other loans faster. But it also depends on how much you are paying monthly on that loan also and if that loan is a “open” or “closed” ended type. Only you will be able to determine what will work better in your situation.

Open ended loans you typically can pay off early and save interest.

Closed ended loans you typically can pay off the loan but you will not save interest however there are some closed ended loans which cannot be paid off early so you will need to ask and make sure..

If it is a closed ended loan and are allowed to pay off early you still might be ahead to do so if nothing else just getting rid of one payment will be helpful.

You can check with your loan companies and ask for a loan payoff balance, that number is the principle still owed as of that day and then you can run that info through a Amortization calculator to determine YOUR best route.

Additionally if you have ANY credit card debts (extremely, insanely high interest rates typically 20% up to 50% interest), you might want to think about paying them off first, then split those payments between auto, snowmobile and RV. Typically if you have credit card debts and are only making minimum payments you will never pay them off. The minimum payments are designed to only pay the interest rate (barely), often less than the interest rate (principle owed grows monthly even if you do not charge anything additional).

I would recommend that you seek REAL financial help offline, check with your local bank or accounting firm or even an tax preparer and ask if they have some recommendations for a financial adviser.

Stay clear of ANYONE pushing "debt consolidation" loans, those folks are nothing more than snake oil sellers.. Consolidation loans take all of your loans, pay them off and creates one HUGE loan payment which can not be easily paid down.. Something you don't want if you want to have any chance of shedding some of the loans you have..

Think of it like taking small steps at a time, it took a long time to get where you are and it will take time to reverse it. But IT CAN BE DONE!

[Gdetrailer]

Beachlovingmom writes “I have just received this email to refinance: In case it helps, here it is (see phone number and code at the end).

Now is the time...
There may never be a better time than now to purchase a new or pre-owned RV or refinance your existing RV loan. Good Sam Finance Center has experienced RV associates ready to provide fast, convenient and flexible service to make the process hassle—free so you can focus on enjoying your RV.

Thinking of Purchasing...
Good Sam Finance Center offers financing for private party and dealer purchases. LEARN MORE >

Considering Refinancing...
Take advantage of the current interest rates and the potential to reduce your monthly payments. LEARN MORE >

Are you a Full-Timer?
Good Sam Finance Center offers financing for the perfect RV to call home. LEARN MORE >

Apply by April 15, 2014 to take advantage of this opportunity. To speak with one of our RV loan specialists call -------------- (be sure to mention priority code 820).


Questions? Call ----------- mention priority code 820”

Umm.. I would recommend that anyone interested look up and call Good Sam (Good Sam, not the Good Sam Finance Center) instead of using the phone number listed in the Email..

Too me, it looks a lot like a typical scammer email just waiting to pick off your personal info… It might be legit but who knows now days..

As a rule of thumb, I NEVER read, respond, give info, buy, agree to buy from ANY source which contacts me via Email, phone, snail mail or even door to door (aka “cold calling”)…

Too many scammers use similar techniques like this email, it is known as “social engineering” and it will part you from your hard earned money with no way to get it back.

If I “need” any goods or services I directly look up and contact the place that might be able to help me, doing so any other way is asking for trouble..

Never click on links given in unsolicited emails, never call phone numbers in unsolicited emails, never give out credit, bank account, SS #, Bdate, or any other form of identification to ANY UNSOLICITED email, phone call, snail mail or even door to door contact..

As far as refinancing goes, typically you come out of it as a loser.. Refinancing IS NOT FREE, they are not doing it because they are friends or want to be friends.

They are doing it to MAKE MONEY OFF OF YOU.

There WILL be some sort of “fees” involved and depending on their “terms” you can easily find yourself even deeper in debt in a hurry… Typically the fees are BURRIED in the loan so read and reread the fine print before signing..

Loans ARE a “contract” and what you don’t know can cause a lot of heart ache and pain down the road..

[2oldman]

Cotay wrote:
Ramsey ...that debt is in and of itself a bad thing (assuming you have more assets than debt), he does a lot of good helping people get out of crippling debt.

He does. Being debt-free is a great way to start fulltime RVing. Works for me.

[bogeygolfer]

You know what? If being in debt bothers you too much to enjoy life, then I recommend avoiding debt (that was me). If debt doesn't bother you all that much, then by all means, borrow away. That's what's great about America - "you pays your money and you takes your chances."

Me, personally: we wanted a camper years before we finally bought a used one for which we paid cash. But, we waited, saved, worried about frivolous spending, and finally bought the trailer in our sig to see if we liked camping. We did, for several years, so we used savings to buy the next (older, affordable) RV.

I could not have enjoyed camping in something if I worried about paying for it every month. (I'd rather camp in a paid-for tent that in a mortgaged RV.) But that's just me - we all have different comfort levels in life, and that was mine. You have yours, and we can all enjoy life in our own way. I've had debt - when I felt I absolutely had to - for a house, a business, a piece of equipment. But I hated it and couldn't wait to be un-shackled from it. Debt is useful - and my opinion is that debt should be used for things that can MAKE you money, not cost you money. But I understand others differ and that's quite ok.

I'd just tell you that the feeling of freedom (and security) from not being a slave to your bills is unlike anything else. I sincerely wish everyone the chance to experience it.

[69_Avion]

lbrjet wrote:
As long as he can afford the payments and gets a lot of use and enjoyment from the trailer, then selling it would be a bad idea. Cut your losses is a bad idea IMO. You don't incur the loss until you sell it. If you can't afford the payment or don't use it then you should sell it. Everyone's situation is unique and one size does not fit all. There are way worse things that people spend money on than a trailer payment.

I agree. The loss in selling is too large. It doesn't matter which item he pays down first, but keeping the motivation without incurring more debt is the key. If paying down the short term debt keeps the motivation going, then do it and feel good about it.

[lbrjet]

As long as he can afford the payments and gets a lot of use and enjoyment from the trailer, then selling it would be a bad idea. Cut your losses is a bad idea IMO. You don't incur the loss until you sell it. If you can't afford the payment or don't use it then you should sell it. Everyone's situation is unique and one size does not fit all. There are way worse things that people spend money on than a trailer payment.

[sherpaxc]

bogeygolfer wrote:

bid_time wrote:
Dave Ramsey is a joke.

I see you're from Michigan. Are you, by chance, involved in municipal government in the City of Detroit? 😉

And this is awesomely funny!

[sherpaxc]

So I have to admit I'm one of the people that got this conversation going and as I sit back in my computer chair I have to laugh. It is so easy to stir the pot on here. Some people can be way to passionate on the internet.

Anyway, the OP actually proved my originally point. I'll say it again. A loan (debt) isn't the worst thing in the world when managed wisely. We can all agree on that I think. What is bad is when that debt is compounded by more debt, then more.

Yes, the OP can afford his current 15 year loan. But he admits he also took a loan out on a truck AND on a snow mobile. This is our America today. A buy today and worry about it later society. I don't think the OP (and many people) realize how much INTEREST he is paying with all these loans. It would probably make him sick.

I stand by my statement. Sell it, cut your losses, get your savings built up, then buy something used and less expensive. It is a hard pill to swallow, but I think it is the right pill.

I feel for the op. I've been there for sure. It was a big mistake and I lost money. But since then I've learned a great deal about financial freedom.

I also agree with most of the Dave Ramsey stuff. He has very good intentions and does a great job helping people like me who AREN'T financial genius's make sound decisions. His word isn't law, but it's good nevertheless.