Everything You Need to Know About Boat and RV Loans This Summer
The Fourth of July and summer high season will be here before you know it. That means vacationers all over West Michigan will soon take to the road to enjoy area recreation, including lakes, camping, and the open road.
If you’re considering buying your own boat or RV to take advantage of the upcoming summer season, now is the time to do your research and shop around. That also means learning about financing options.
Here’s what you need to know.
The Basics of Buying a Boat or RV
For most people, a boat or RV is a recreational purchase; a want rather than a need. Even if you plan to live in your vehicle, you will finance with a loan rather than a mortgage.
The process is similar to taking out a car loan, and you’ll be required to present the same types of information to the lender when you apply, including:
- Basic contact information
- Employment information
- Tax returns
- Monthly bills/list of other debt obligations
- Specifics about the boat or RV, including year, make, model, power, options, upgrades
- Cost of the vehicle plus sales tax and registration details
Your lender will also run a credit check, so be sure your credit score is strong to get the best possible rate for your boat or RV loan.
How Much Can You Afford?
Knowing what to spend on a boat or RV can be a complex calculation, and results will vary depending on your situation. Your price will be affected above all by whether you buy new or used. Keep in mind that a new boat or RV will initially decrease in value, just as a car would once you drive it off the lot.
However, if you maintain these recreational vehicles well, the value will often plateau or even increase, thanks to a strong market of buyers interested in used boats and RVs. Keep the future value in mind if you have a timeline for selling so you don’t end up owing more on your loan than you could reasonably recoup in a sale.
In addition to the sticker price of the vehicle, also consider the interest rate and length of the loan. Boat and RV loans tend to carry slightly higher rates than car loans but are much more affordable than credit cards or a variable rate home equity line of credit. Ask your lender to run the numbers so you can see the total cost of each loan as you compare your options. A higher down payment and shorter term will be cheaper in the long run, but you can enjoy smaller payments with terms up to 12 years if you prefer.
Finally, talk to other boat or RV owners to get a sense of their repair and maintenance costs. The same goes for insurance, as research is key. Much like your car, there’s more to the total cost of ownership than just your monthly payment. Once you have a clear picture of the amount you’ll spend, you’ll be better able to determine your budget to ensure you choose an option that’s right for you.
About Best Financial Credit Union
When you’re shopping for an RV or boat loan, choosing a local lender is a good idea. Best Financial Credit Union knows exactly what it means to hit the water in West Michigan, and they offer competitive rates on boat and RV loans, plus friendly, customized service from the moment you walk in the door. Find out more about how to get your summer started with a new boat or RV today at www.bestfinancialcu.org.