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Old 05-07-2018, 11:18 PM   #1
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Please help, I can't find interest rates below 6%

I'm about to purchase a TT and I'm a bit shocked at the interest rates. Dealer estimates with good credit, should be around 6% and online I can't find any banks that will give a loan for less than 6% unless the term is less than 6 years. Am I missing something? What are typically people's interest rates these days. My car loan in 2016 was 1.75%.
I have great credit but dont see any good options.
I'd like to finance for 12 or more years.
Any info is appreciated.
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Old 05-08-2018, 03:11 AM   #2
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They consider a RV a luxury item. We also have excellent credit and the best we could do was 6.75% when we purchased our used Winnebago Tour
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Old 05-08-2018, 03:08 PM   #3
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We used IRA funds. Was earning very little. Had to pay tax at withdrawal, but would have had to do that anyway. Our "effective" interest rate is extremely low.

Dealer was surprised we were paying "cash" for our 2017 Era 70X. Said many finance for 10+ years. I don't know why one would pay "rent" on money to someone else when you can either have it at no real cost or repay yourself that "rent".....

Nice thing is -- you still have the value of the MH or trailer to recover when you sell. So what did that really cost you?
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Old 05-08-2018, 03:27 PM   #4
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Originally Posted by White Cloud View Post
We used IRA funds. Was earning very little. Had to pay tax at withdrawal, but would have had to do that anyway. Our "effective" interest rate is extremely low.

Dealer was surprised we were paying "cash" for our 2017 Era 70X. Said many finance for 10+ years. I don't know why one would pay "rent" on money to someone else when you can either have it at no real cost or repay yourself that "rent".....

Nice thing is -- you still have the value of the MH or trailer to recover when you sell. So what did that really cost you?
Never thought about this. Wonder how that would work on a boat. Getting ready to buy a new boat and also shopping interest rates. So far our credit union is best at 4.x%. Wouldn't know final until I sign the check as the rate isn't locked in yet. I like this idea not only because of the possible interest rate comparison but it's how I buy my cars and trucks, there is always a lot more "room to play with" when you can walk out and go up the street with a check in your hand. Going to have to look into this myself. I might even be able to get a bigger boat.
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Old 05-08-2018, 04:32 PM   #5
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Try Bank of the West. It might also depend on the amount. Lower the amount the higher the interest because they want to get their money's worth.
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Old 05-08-2018, 08:28 PM   #6
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Keep in mind that, despite the recent declines in the stock market, and depending on your investments, your IRA could be earning more than 5% over the term of your self-financed "loan". There is a real cost to using this money on a long term basis. Additionally, a lump sum withdrawal from an IRA (401k or 403b) could push you into a higher tax bracket, increasing the effective cost of the "loan". Also, keep in mind that, when you sell the RV on the back end, it will be worth significantly less than what you took out of your retirement account.

If you're under 55, you can't withdraw but you can borrow against these tax-deferred plans but there are downsides to this as well (Google it).

Home equity loans are another option.

In my case, we were buying a used motorhome and, coincidently, since I'm over 70 1/2, we were taking the Required Minimum Distribution (RMD) from my tax-deferred investments. Since they are monthly distributions, I took out a home equity loan and am paying it off on an accelerated basis with my RMD payments.

Were I not receiving the RMD, and which I fortunately do not need for current living expenses, I would not have withdrawn money from a tax-deferred account to finance an RV. That money is for retirement.

Even for someone with, say, $100,000 in a non-tax deferred investment, using that money to buy an RV may cost more than a 5% bank loan depending on how it was invested. For example, the S&P 500 10-year average annualized return (including the 2008/2009 "crash" and the recent decline) is about 6.2% (5 year return 10.2%). If you have $100k sitting in bank CDs earning under 3%, it's a different story, although that can change as well.
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Old 05-09-2018, 05:01 AM   #7
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Try Alliant Credit Union but terms are normally 8 years..................With anything longer you will probably be upside down when you sell it.
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Old 05-09-2018, 08:57 AM   #8
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If the numbers don't work, there's a good chance that you're either paying too much or buying more than you can afford.
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Old 05-09-2018, 10:16 AM   #9
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Great discussion. Thanks everyone for your input.
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Old 05-09-2018, 04:10 PM   #10
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We have found that credit unions give the best interest rates over banks.
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Old 05-09-2018, 10:29 PM   #11
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Old 05-10-2018, 10:28 PM   #12
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Originally Posted by workinrvers View Post
We have found that credit unions give the best interest rates over banks.
Not necessarily. CU's I check wanted 6% and up whereas bank gave me the load for 4.9% - last November.

To the OP: If you credit score is above 750 and especially if above 800 you should not have a problem but you do need to call around. Go on-line and look at some of the lenders, what they offer and if they are major bank or CU.
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Old 05-16-2018, 04:41 PM   #13
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Quote:
Originally Posted by Filshere View Post
I'm about to purchase a TT and I'm a bit shocked at the interest rates. Dealer estimates with good credit, should be around 6% and online I can't find any banks that will give a loan for less than 6% unless the term is less than 6 years. Am I missing something? What are typically people's interest rates these days. My car loan in 2016 was 1.75%.
I have great credit but dont see any good options.
I'd like to finance for 12 or more years.
Any info is appreciated.
We bought our 2012 Journey 36M in 2013 at 4% for 20 yrs but paid it off early last year. If I were buying today it would be at least 6% just due to interest rate increases. Depreciation on RV’s put it under water for at least 5-10 years so the risk is greater for the lenders. Plus a home on wheels can suffer a loss more easily than a fixed structure. RV’ing is not cheap living; Disney campgrounds are above $150/night now and even a bare concrete or gravel site is usually over $50. Welcome to reality, fuel is approaching $3/gal and RV taxes and registration fees for us are over $2000/yr. You get no breaks in life in an RV but it is still worth it for us to have freedom to wander.
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Old 05-16-2018, 05:08 PM   #14
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Quote:
Originally Posted by Filshere View Post
I'm about to purchase a TT and I'm a bit shocked at the interest rates. Dealer estimates with good credit, should be around 6% and online I can't find any banks that will give a loan for less than 6% unless the term is less than 6 years. Am I missing something? What are typically people's interest rates these days. My car loan in 2016 was 1.75%.
I have great credit but dont see any good options.
I'd like to finance for 12 or more years.
Any info is appreciated.
We bought a 2004 Sightseer 30B last year and paid 2.9% with 20% down for 5 years. Dutch point Credit Union.
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Old 05-16-2018, 05:09 PM   #15
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Line of credit, interest rate similar to a mortgage. Credit Unions are very good at giving lower interest rates.
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Old 05-16-2018, 05:15 PM   #16
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We bought our 2012 Journey 36M in 2013 at 4% for 20 yrs but paid it off early last year.
Congratulations on your financial wisdom past and present so that you could, and did, accelerate the pay-off of your loan.

I can remember waiting in a car salesman's office and overhearing a salesman in the office next door selling a car to a very young couple who I presume were first time buyers. The salesman was using the classic, "tell me how big a monthly payment you can afford and I'll see if I can get you into this car" pitch. It was clear from the conversation that they had no idea of what they were getting into and I wanted to get up, walk over, pull them out of the office and explain things to them.

I've always wondered if they bought the car and, if they did, how long they ended up paying for it.
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Old 05-16-2018, 06:14 PM   #17
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Just financed $35,000 for a new motorhome thru Bank of America at 4.99%. Financed thru dealer. Credit score over 800.
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Old 05-17-2018, 05:38 AM   #18
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We used Good Sam/Bank of the West and ended up at 5.39% for our used RV financing.
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Old 05-17-2018, 07:52 AM   #19
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I tend to pay cash for depreciating assets or if I take out a loan it is 3 years or less so can't suggest more than looking at a CU. Depending upon your financial situation a CU might have some other options. As an example my CU home equity loan rate is 4.25%. They also have a share secured loan at 5%. Of course these depend upon having the available equity or enough money in an account to secure the loans. There are also tax changes to consider with the home equity loan. As to RV's my CU won't finance those directly nor accept RV's as collateral. I suspect it has to do with the high depreciation and damage/loss risks.
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Old 05-17-2018, 02:40 PM   #20
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Originally Posted by Filshere View Post
I'm about to purchase a TT and I'm a bit shocked at the interest rates. Dealer estimates with good credit, should be around 6% and online I can't find any banks that will give a loan for less than 6% unless the term is less than 6 years. Am I missing something? What are typically people's interest rates these days. My car loan in 2016 was 1.75%.
I have great credit but dont see any good options.
I'd like to finance for 12 or more years.
Any info is appreciated.
You might try a Credit Union. I got a loan for 4.99% over 6years
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