Recreational vehicle, RV, motorhome — no matter what you call it, these vehicles offer a fun and exciting way to move around. Whether you’re a retiree hoping to hit the road for an extended vacation or you want a vehicle that will allow your growing family to explore, motorhomes can fit into your lifestyle.
But before you start planning your first getaway, you need to address some practicalities. The first is financing your motorhome purchase.
Here’s a step-by-step guide to figuring out how much motorhome you can afford, how interest rates are determined, and where to look for a loan.
What Kind of Motorhome Can You Afford?
Maybe you have a vision of driving the open road in a mansion on wheels. Before you dream too big, though, you’ll need to determine how much of a loan you can afford and what the payments will be. Your monthly loan payments depend on several things:
- The total cost of the motorhome
- The amount of your down payment
- The interest rate on the financing
- The term of the loan (the number of years you have to repay the loan)
The longer the term, the lower your monthly payments will be. However, it’ll also take you longer to pay off the motorhome, and you may pay more in interest over time. You should look for a low interest rate, but keep in mind that it may not be the only deciding factor. You also want some flexibility, such as no penalties for early payoff. Plus, you should check with potential lenders about fees that apply to your loan, such as penalties for late or missed payments.
What Determines the Interest Rate for Your Motorhome Financing?
Two main factors go into determining the terms of your financing on a new or used motorhome.
- Credit history: Anytime you take out a loan, the lender will examine your credit. This tells them how well you’ve kept up with loan and bill payments in the past. Your credit is the best indicator of whether you’ll remain current with a new monthly payment for your motorhome.
- Current loan rates: Loan rates can fluctuate based on the state of the economy and the markets. Keep an eye on trends to see when it may be best to apply for a loan.
Where Can You Finance Your Motorhome?
You have two main choices for financing your motorhome. You can do it through a financial institution, such as a credit union like PSECU, or you can do it through a dealership.
There are many reasons why you may want to consider financing your motorhome through a credit union. Here are just a few of them.
- You can walk into the dealership prepared: Already being approved for a loan when you arrive at the dealership can have many advantages. For instance, it helps you stick to a firm budget – you already know how much you’re approved for and what the monthly payments will be.
- You may get a better rate: Credit unions are known for offering loans with lower interest rates than many for-profit financial institutions. The lower the interest rate, the more money you will save.
- You can avoid high-pressure sales tactics: If you already know that you’re approved for a loan, you may be less likely to feel pressured into spending more or signing for a loan with a higher rate.
Financing a Motorhome Through PSECU
At PSECU, we offer loans specifically geared toward purchasing a recreational vehicle. We can finance new or used motorhomes with low interest rates, often lower than you’ll find at a dealership.
We work with some dealerships to offer loans. If a dealer presents you with a PSECU loan option, you can rest easy knowing that we don’t allow dealerships to mark up our interest rates.
We also offer flexibility in motorhome financing options, letting you pick the term that’s right for you. Our motorhome financing options extend up to 10 years. We can work with you to find a plan that fits your financial needs.
When You’re Ready, Contact PSECU
Traveling across the country in a motorhome can make for amazing memories. Grab ahold of this opportunity by financing your motorhome through PSECU. Contact us today to learn more about our rates and speak to a representative about how we can assist you. Saving you money is always our goal.
You can find additional tips for saving money on our WalletWorks page.