There comes a point in our lives when we crave a break from our stressful routines and a change of scenery. When this happens, every solution we think of might point in the direction of financing a motorhome caravan.
With a motorhome caravan, there is no limit to your outdoor vacation experience. However, since motorhomes are generally expensive, financing one can be a challenge, especially if it is a brand new model.
Even so, with proper guidance, you can finance a motorhome without busting your budget.
How to save money on your motorhome financing
1. Set a budget
Before shopping around for a motorhome loan, you should first decide on a practical budget and stick to it. Motorhome caravans come with a variety of facilities, so it is easy to get carried away and opt for the one that has the fanciest facilities.
For someone on a tight budget, such a motorhome can be a bad investment—not just because it will cost more than motorhomes with fewer installations, but also because, most of the time, you can easily manage without those fancy features.
Thus, setting a budget will help you prioritize functionality over style, which will prevent you from spending too much on your motorhome financing.
2. Improve your credit
As with other major investments, your chances of securing a motorhome loan, as well as the loan rates you will be offered, will largely depend on your credit score. Generally, the higher your credit score, the better deals you will get.
If you qualify for a loan with a poor credit score, the lender will usually offer you higher interest rates. And since motorhome loan terms often last over ten years, paying that much money on interest can be daunting.
Therefore, before you apply for a motorhome loan, always take the time to improve your credit score.
3. Consider buying a secondhand model
If you are on a tight budget, financing a secondhand motorhome model might pay you more than financing a new one.
Although this only holds true when the secondhand model is in good condition. If it isn’t, the money you will spend on repairs might equal or even surpass the cost of financing a brand new motorhome.
Therefore, to get the most from your secondhand motorhome purchase, always inspect the vehicle for damage. The money you save on financing a well-maintained secondhand model can be later invested in upgrades and other important projects.
4. Compare between different lenders
From banks to credit unions to local dealerships, there are several places to obtain a motorhome loan from. This diversity among lenders has given rise to competitive rates, which is why you should always compare between different lenders before making any decision.
Motorhome financing is not just an investment; it is a huge commitment. And as you will learn eventually, the actions you take before financing your motorhome will determine whether you will be spending or saving more money on interest every year, throughout the life of your loan term.