An RV is one of the largest purchases that a consumer can make, as the prices of many RVs are comparable to the price of many homes. When a consumer borrows a large amount of money, even a reduction of one point in the interest rate can result in significant savings over time. Though refinancing an RV is not always a simple process, the prospect of substantial savings makes the process well worth the effort.
Check Credit
A consumer's credit score is one of the most important factors that will determine whether or not a refinance is successful. Before seeking to refinance an RV loan, owners should request a copy of their credit report and review the information in the report for accuracy. If there are inaccuracies in the report, use the credit reporting agency's procedures to make corrections. During the refinance period, consumers should pay all bills on time, avoid opening new lines of credit and pay down debt to improve their credit standing.
Determine Value
Consumers should consult a well known price guide such as NADA or Kelley Blue Book to determine the fair market value of their RV. Consumers should then examine their current loan documentation to determine the balance left on the existing loan. If the consumer owes more on the RV than it is worth, the consumer may have to pay down the existing debt before refinancing the RV. Though the extra payments may be difficult in the short term, the long term savings of refinancing to a lower rate will make up for the costs over the life of the loan.
Choosing a Lender
Lenders each use different formulas to determine whether or not they will approve a loan and what terms they will offer. Owners of RVs should locate a number of lenders, both locally and online, that offer refinance loans for RVs and choose the lender offering the best loan terms. Though longer loan terms will reduce the monthly payment significantly, owners should avoid extending the length of the RV loan beyond 10 years, as RVs rapidly decrease in value and the loan may outlast the RV.
Make Repairs
Many lenders will order an inspection of the RV before approving a refinance. Lenders will want to make certain that the loan is for a RV in proper operating condition. If the RV requires significant repair, owners should have this work completed before seeking a refinance. RV owners should complete minor repairs, routine maintenance and cleaning before the scheduled inspection in order to present the RV in proper working condition. This will increase the value of the vehicle and improve the chances of a successful refinance.
0 comments:
Post a Comment