Many people are surprised when they begin the process of applying to buy a motorhome. The costs can vary hugely and depending on the spec that you will need from your motorhome, it might cost significantly more than you were initially expecting. Many people use financing options to afford the motorhome that is suitable for their needs. With that in mind, there are many different options available to help you finance your new motorhome and in this article, you will be given tips for choosing the most suitable motorhome loan for you.
Set A Budget
It sounds obvious but a good place to start when choosing a motorhome loan is to set a budget on how much you are willing to spend on the motorhome and assess how much you will be able to borrow. It can be tempting to purchase a motorhome that is lower in cost but it’s worth considering that this may not fit all of your requirements and waste your money. Therefore, you should conduct your research into motorhomes and motorhome loans before approaching a lender. For more advice on which budgets may be best suited for you, visit https://www.autofinanceonline.co.uk/motorhome-finance/ for more information.
Hire Purchase or Lease Purchase?
Next, you have to consider the different types of loans which can cover the purchasing of a motorhome.
Hire purchase is the most common type of loan that you will be able to apply for when purchasing a motorhome. This is in essence a loan which will require you to put down a deposit and will have you pay off the cost, the interest and the admin fees of the purchase of the motorhome in monthly instalments over the contract time, which is usually set between 10 and 20 years. Once the contract is over (and presuming all of the bills are paid), you will then own the motorhome.
Lease purchases are very similar, except they usually offer lower monthly repayments and when you reach the end of your contract, you will usually make a balloon payment which will pay off the motorhome in full. The cost will be settled when you sign the contract, so you do not have to worry about any unexpected fees.
Is It Affordable?
It sounds like an obvious thing to consider when choosing a loan, but you need to ensure that any loan that you can take out is affordable to repay. Consider lease purchasing for example, it may come with lower monthly repayment costs, but at the end of the contract you have to make a balloon payment, which may not be as affordable as you think especially if your circumstances change. So aim to purchase your motorhome with a loan that can offer a bit more wiggle room if you have concerns about the overall costs.
Review The Lender
Of course, you will also need to review the lender who is offering the loan. This may not be such an issue if it is a bank, but if you are getting the loan from the person who is selling you the motorhome (which is common in some states) or you are using an online lender, make sure that you understand all of their terms and conditions. Also, assess the lenders’ reviews for any indication that they may be untrustworthy or a scam.