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Old 08-20-2019, 05:59 AM   #1
RWRiley
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RV Friendly Financing

We borrowed part of the cash to purchase our new RV. I ended up paying 5.74% over 10 years. Most banks will not lend for an RV purchase, but that seems like a lot to me. Does anyone have a line on a better interest rate ? I wonder if I can refinance - kind of like a house ?
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Old 08-20-2019, 06:12 AM   #2
mwemaxxowner
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You can refinance anything if there is a lender who will do it. I refinanced my truck after my credit grew by 150 points. Saved me 2 percent.

I haven't bought any RVs that I had to take out a loan on myself, but just at face value for a 10 year loan, that interest rate doesn't sound that bad to me. The longer you borrow for, the higher the interest rate usually is. There are so many factors that could be at play, and variables we don't know on this side of the screen.
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Old 08-20-2019, 06:42 AM   #3
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You might do some comparison shopping for load rates.

Here is the Good Sam chart on their "with approved credit" rates:
https://www.goodsamrvloans.com/rates/

I've found that credit unions tend to have the best "short term" (less than 60 months) rates and are much more willing to do business on a "high cost/depreciating" item like boats, RV's, used cars, etc.
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Old 08-20-2019, 10:41 AM   #4
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We just financed ours at 3.75 for 15 years.
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Old 08-20-2019, 12:37 PM   #5
RWRiley
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Originally Posted by JRTJH View Post
You might do some comparison shopping for load rates.

Here is the Good Sam chart on their "with approved credit" rates:
https://www.goodsamrvloans.com/rates/
Yeah I saw the Good Sam chart. Based on what I have financed I'm better off at 5.74%. I will check the Credit Unions - Thanks.
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Old 08-20-2019, 01:31 PM   #6
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If you have some equity built up in your home, you might want to consider a second mortgage, or home equity loan at a Credit Union against that instead. Rates tend to be better on brick and mortar or stick built homes, as they tend to hold their value or appreciate in value.

Also it is a good idea to remember that your RV qualifies as a second home come tax time, as long as it has sleeping, cooking, and plumbing accommodations.

Good Luck,
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Old 08-20-2019, 04:02 PM   #7
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Let's examine Tech's Sandpiper for a slightly less than accurate example. We will 'assume' that he and Momma paid $60,000 for the unit, including tax and paid $10,000 down/trade. Financed at 4% the notes are about $370. After ten years they will still owe $20,000 on an RV that will be worth $21,000. Not a terrifically bad risk for the average credit union. At the end of the loan (15 years) supposedly the RV will still be worth $12,000. The credit union will have 'made' $17,000 on the loan, and Tech and Momma will have finally gotten all the bugs out....
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Old 08-20-2019, 04:15 PM   #8
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Let's examine Tech's Sandpiper for a slightly less than accurate example. We will 'assume' that he and Momma paid $60,000 for the unit, including tax and paid $10,000 down/trade. Financed at 4% the notes are about $370. After ten years they will still owe $20,000 on an RV that will be worth $21,000. Not a terrifically bad risk for the average credit union. At the end of the loan (15 years) supposedly the RV will still be worth $12,000. The credit union will have 'made' $17,000 on the loan, and Tech and Momma will have finally gotten all the bugs out....


You are good at this
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Old 08-20-2019, 04:57 PM   #9
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Originally Posted by Pull Toy View Post
If you have some equity built up in your home, you might want to consider a second mortgage, or home equity loan at a Credit Union against that instead. Rates tend to be better on brick and mortar or stick built homes, as they tend to hold their value or appreciate in value.

Also it is a good idea to remember that your RV qualifies as a second home come tax time, as long as it has sleeping, cooking, and plumbing accommodations.

Good Luck,
That tax door closed after the 2017 tax year. You can’t deduct home equity interest any more unless the loan or line of credit is used to purchase, build or substantially renovate your PRIMARY residence.
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Old 08-20-2019, 07:17 PM   #10
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If you have some equity built up in your home, you might want to consider a second mortgage, or home equity loan at a Credit Union against that instead. Rates tend to be better on brick and mortar or stick built homes, as they tend to hold their value or appreciate in value.

Also it is a good idea to remember that your RV qualifies as a second home come tax time, as long as it has sleeping, cooking, and plumbing accommodations.

Good Luck,
This, to me, is a bad idea unless you are young and don't care where you end up at. We paid our home off and the one thing we determined is that it would be unencumbered in any way because both of us want a paid for, nice, primary residence when we are unable to "get around". Placing a mortgage on it then places you at risk of default or foreclosure in the event of something happening. For us and our future, not in the cards. For others YMMV.

Now, an equity loan on a non primary residence? That can work and we've done it.
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Old 08-21-2019, 06:21 PM   #11
RWRiley
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Originally Posted by Pull Toy View Post
If you have some equity built up in your home, you might want to consider a second mortgage, or home equity loan at a Credit Union against that instead. Rates tend to be better on brick and mortar or stick built homes, as they tend to hold their value or appreciate in value.
I talked to my banker about this very thing, but they want 5.5% which is really no better than I have now.
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Old 08-21-2019, 06:25 PM   #12
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Dipping into the 401k is a terrible idea...btdt.
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Old 08-21-2019, 06:29 PM   #13
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I talked to my banker about this very thing, but they want 5.5% which is really no better than I have now. Might just dip into the 401K....The market sucks now anyway.....Just have to pay taxes on it.
Looking at the market short term is not what you want to do. Dipping into the 401k is not what you want to do. I don't know your age, finances or anything else but the rule of thumb for financial independence at some point is to leave the 401k alone - depending on who is handling it and how it's positioned.

Edit: If your aren't averaging at least 5.5% a year you need to be talking to your finance guy or reassessing your position in the market - it that has any bearing at all.
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Old 08-21-2019, 06:59 PM   #14
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If your aren't averaging at least 5.5% a year you need to be talking to your finance guy or reassessing your position in the market - it that has any bearing at all.
My bad for allowing this to thread to end up as a conversation on my financial position/independence. I was just looking for a better interest rate.
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Old 08-21-2019, 08:00 PM   #15
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Dipping into the 401k is a terrible idea...btdt.
its only a terrible idea if you think the market is going up. if it goes down you actually "save" money while you have the money out on a loan ,and the "investment" of a loan to yourself at say 5% loan rate is ROI, which is typically usually prime on most 401k plan loans.

I don't think you should do this all the time, but borrowing on your 401k is not terrible in certain circumstances. Even if the market goes up you would need >5% returns in current rate environment before you are "losing" any earnings growth on your 401k. Agree in general you should probably "average" 8% 401k returns over the long haul. Any one year would be anomally's for comparison purposes.
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Old 08-22-2019, 03:05 AM   #16
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When you say "borrowing on your 401k" I think maybe we're talking about different things. I took some out of mine. Not a ton of it, but boy the taxes and fees hurt. Then after putting me in a different tax bracket hurt again when it was time to file income taxes. It helped me get through a tough time though.
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Old 08-22-2019, 03:33 AM   #17
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There is a difference between borrowing off your 401k and taking money out of your 401k. When you take a loan out of your plan, there are few if any fees and no penalty's or tax implications, and the interest you pay goes back into your account, so you are basically the bank. Not every plan allows it, but certainly worth looking into depending on your situation.

I used my 401k to buy my last camper, at 4% interest and a 5 year term. Come tax time each year, I used my tax refund to pay it down and was finance free in 3 1/2 years. As a side note, since a loan off your 401k loan has no collateral, and no credit reporting, you get the title to the camper and could use it for a secured conventional bank loan in a financial emergency.
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Old 08-22-2019, 04:42 AM   #18
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I get that. I just thought that's what we were talking about by dipping into the 401k. I know taking some out is definitely not a good solution! Lol

Makes paying 5.7% look fantastic. [emoji38]
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Old 08-25-2019, 07:43 AM   #19
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Where did u find that rate??
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Old 08-25-2019, 07:47 AM   #20
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Where did u find that rate??
M&T Bank: https://www.mtb.com
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