# Financing....loan Length?



## sptddog (Mar 22, 2006)

We're looking to buy a 25 RSS- probably a used model in the 12000-15000 dollar range. I'm not nuts about taking out a loan on something like an RV, but w/ the deductbile interest it's not the end of the world.

Is an RV like a car? No more than 3-5 years on a loan? We'll be storing outside, probably uncovered, but on gravel. I can't imagine an RV holding up well with that kind of set-up for 10 years and I don't want to be 'under' on the loan. While deducting the interest for 10 years is nice, I can't see doing that on a 15000 dollar TT. What have others done? How long is 'smart' to finance? I'd love the low payment of the longer loan (and would probably end up paying it off early anyhow) but I'd also like the potential resale value of owning it at 3 years.

Thoughts? Pros/Cons from those already finacing?


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## h2oman (Nov 17, 2005)

You can always opt for the longer loan and make double payments. If money becomes tight on occasion you just make the required payment and pocket the other half. In the end though, it comes down to what you think is needed and not others. Don't be ashamed of how you do it or think that we will chastize you for it. It's not any of our business. Just get the rig you want, that satisfies your needs and start having a blast.

John


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## hatcityhosehauler (Feb 13, 2004)

I prefer to take the shortest terms I can afford at the time of purchase. When we bought the Outback, we took the 10 year note though for the lower impact on our monthly expenses, and with the thought that we can, and will most likely pay it off early. We are starting our third season with it, and I don't foresee trading it, so I'm not that concerned with the amount of equity I have right now.

If you can handle the larger payments of a shorter term, I'd say go for it. You may not have a choice with a used unit, and may have to take the shorter terms, and you should shop around for rates.

Tim


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## GoVols (Oct 7, 2005)

However you end up doing it, make sure it is a simple interest loan with no prepayment penalties. Do you have a local credit union you can use? They typically have very competitive rates.

Long terms will almost guarantee you'll be upside-down on the camper. Do a family budget FIRST, then make it as short as you can manage it.

Our credit union limits "newer" used units to 84 months and units older than two years to 60 months.


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## nascarcamper (Jan 27, 2005)

hatcityhosehauler said:


> I prefer to take the shortest terms I can afford at the time of purchase.Â When we bought the Outback, we took the 10 year note though for the lower impact on our monthly expenses, and with the thought that we can, and will most likely pay it off early.Â We are starting our third season with it, and I don't foresee trading it, so I'm not that concerned with the amount of equity I have right now.
> 
> If you can handle the larger payments of a shorter term, I'd say go for it.Â You may not have a choice with a used unit, and may have to take the shorter terms, and you should shop around for rates.Â
> 
> ...


What he said but keep in mind if you don't own a second home you can write off the interest. The rate was actually better on a ten year not than a five so we went with the ten and a decent down payment knowing that if we stay on the ten year plan and don't keep it we'll be dishing out the difference at trade in. So there really is not difference from that aspect but we write off the larger interest payments.


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## KRKarnes (Jul 9, 2005)

On a loan over 10 years as opposed to 5 years you are going to pay around $2500+ in additional interest and be very upside down on the loan from start to the long end 120 months later. Yes payments will be cheaper. Yes the interest can be wrote off. I wouldn't try to justify a 10 year note for $4700+ worth of interest write off over 10 years. The hard truth is. It's a travel trailer not a second home. It will not gain value. It will loss value fast like an automobile. Buy what you like and can afford. Not what will save you very little on your taxes.


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## Dark Green Dmax (Aug 2, 2005)

When we bought our 29fbhs last year, the dealer just couldn't grasp the fact that we wanted the shortest term that we could afford. They tried to talk us into a 10-12 year note...saying you can double up your payments & pay it off early. They even offered a better rate for the longer the term.







In the end we found our own financing at a better rate than there best long term rate







. I'm happy to say that our 05 29fbhs will be paid off in 4 years.


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## 7heaven (Jun 4, 2005)

Our credit union had terms up to 12 years. We opted for a shorter term of 84 months, 5.29%.


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## California Jim (Dec 11, 2003)

I agree. RV's depreciate rapidly and lose their value quickly. After 10 years many trailers are almost worthless. I would buy it as cheap as possible and pay it down as fast as you can.


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## HootBob (Apr 26, 2004)

We went with the 5 years plan it worked for us
Go with what you are comfortable with

Don


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## Lady Di (Oct 28, 2005)

We had saved some money toward the camper. When we went for financing the dealer had the best rate, but we had to finance over $10,000 to get that rate. When the first payment came due, we paid the money we had saved, in addition to the first payment.
That brought it down in a hurry.


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## sptddog (Mar 22, 2006)

Thanks folks - looks like most of you are of the same thought I am. I really think 5 years is my limit. At that point I'm going to want the latest and greatest stuff anyway and I don't want to be brutally upside on a loan. I wouldn't finance a car for longer than 5 years either....









So, now we find the right TT, for the right price!


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## Oregon_Camper (Sep 13, 2004)

We just took the money from my Home Equity loan and then paid it off in 14 months.


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## nascarcamper (Jan 27, 2005)

Oregon_Camper said:


> We just took the money from my Home Equity loan and then paid it off in 14 months.
> [snapback]96161[/snapback]​


Most home equity lines are higher than the finance companies. I was going to pay mine off last year with cash but my accountant made me get a SEP. I put a equity line in place on my house when I converted from the construction loan and the interest rate is higher than I got on my truck by enough it isn't worth the deduction.


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## kevman (Mar 5, 2005)

nascarcamper said:


> hatcityhosehauler said:
> 
> 
> > I prefer to take the shortest terms I can afford at the time of purchase.Â When we bought the Outback, we took the 10 year note though for the lower impact on our monthly expenses, and with the thought that we can, and will most likely pay it off early.Â We are starting our third season with it, and I don't foresee trading it, so I'm not that concerned with the amount of equity I have right now.
> ...


Is everyone in agreement here???? I have never heard being able to write off interest on a travel trailer as a second home. I know you can do this on big boats and RV's, but can you do it on a pull behind the TV travel trailer???? Who on the forum writes off the interest?? Just interested. I sure hate to miss out on a write off.


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## Highlander96 (Mar 1, 2005)

We wrote off the interest this year. My Dad is a CPA and he said it was perfectly fine, as long as you can cook and sleep in it and don't already have a second home.

Hope this helps,

Michelle


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## summergames84 (Mar 6, 2004)

Yes, my DH is a CPA and confirms that you can write off travel trailers as a second home but they must have a bathroom. So, all Outbacks qualify!







We've been writing it off since purchase.


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## nynethead (Sep 23, 2005)

When we purchase ours last year they offered a 5 1/2 to 12 year loan. We opted for 6 years pr 72 payments. I was looking for a dollar amount that wasn't going to break the bank. In the end our 29BHS cost us 355 per month.

The interest on the loan is tax deductable as a second home on a TT if it has a bathroom and functioning kitchen. I deducted my first two months interest this year on my taxes.


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## sptddog (Mar 22, 2006)

That's what I've heard re writing off the interest...but I understand that the TT must have cooking, sleeping, *and* toilet facilities to qualify. I think someone on RVnet posted a link to a site that discussed it - I'll have to try and look for it.


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## Husker92 (Feb 11, 2006)

Look for the best interest rate and then double up the payments!

Talk to a CPA - because in some cases the interest can be written off.


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## Oregon_Camper (Sep 13, 2004)

nascarcamper said:


> Oregon_Camper said:
> 
> 
> > We just took the money from my Home Equity loan and then paid it off in 14 months.
> ...


Agree...most HELOC's are higher, but not when I bought the Outback. I knew I was going to pay off the loan in under 16 months, so this was the best and easiest route for me.


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