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-   -   What The Heck!! Is This Right? (https://www.airforums.com/forums/f350/what-the-heck-is-this-right-49679.html)

gc24 03-27-2009 11:55 AM

What The Heck!! Is This Right?
 
Trying to finance a used A/S and my Bank(Wells Fargo), got me a loan for the full amount for 15 years, 13.8%, and a payment of 409.00 a month. Doesn't seem right. For that deal, maybe I should buy a new one.

pageclot 03-27-2009 12:10 PM

In rough terms:

What you described suggests a $31,000 purchase price. Amortizing over 15 years means that in total, you pay $73,620. Interest, therefore, is $42,431.

A couple of things:

a) The interest rate is pretty high: 13.8% is pretty close to discount credit card rates. I'd shop around. If your credit is good, or if you can secure it with another asset, like home equity, then you should be able to get a loan in the 6 to 8% range.

b) Amortizing it over 15 years, even for an airstream, seems pretty extreme. I know they last longer than cars, but.... the longer your amortization period, the more you pay in interest.

boondockdad 03-27-2009 12:15 PM

my bank submitted an application to me for owning an airstream.
they actually pay me $713 a month just so I can pull this thirty-one foot monster around.

Silvertwinkie 03-27-2009 12:27 PM

13.8% is insane. I agree rates of 6 to 8% maybe, tops with good credit, but keep in mind I'm talking before this financial meltdown when folks were willing to lend.

B4WEDI 03-27-2009 12:34 PM

Depending on your situation.....
In this economy, I wouldn't put my house up as collateral. Things sound tight if you are borrowing the whole loan amount with no money down.

If / when things got worse and you were forced to bail somewhere down the line, let 'em have the trailer and be done with it. Don't let them tie it to your principal place of residence and jeopardize that too.

Like musical chairs.... make sure you have a seat when the music stops !

CanoeStream 03-27-2009 01:01 PM

Here's my local credit union's loan rates right now - Loan Rates

I don't think I'd extend an RV loan out any further than I would a car loan. And then the amount of interest laid out brings out the Scotch in me if I go more than 2 years.

On such a long term loan the rule of 78 would leave you paying interest in front-loaded fashion. Sell the trailer even after 12 years and you'd find very little paid off on the principal; ie, you'd have not much to show for years of faithful payments.

Home equity interest is deductible but you don't need to go that route! Like interest on a 2nd home being deductible, interest on a simple loan is also deductible for a boat or RV where you can stay overnight if it has a galley and W.C.

Ganaraska 03-27-2009 02:22 PM

That is way too high. It should be basically the same as a car loan secured by a chattel mortgage. Not an unsecured loan.

There is plenty of money around to borrow if you have good credit.

gc24 03-27-2009 02:54 PM

Yea, a credit union quoted me 8.75%, 5 year balloon, 10 year Amortizing and it was $390. a month. Don't own a home, so that's out. Guess I will dump the whole idea.

Bluto 03-27-2009 03:02 PM

I find this thread interesting, hope we hear more info on this subject. I too would buy another Airstream if the loan rates were better. I called Jackson Center last week to see if they had any solutions to help people who wanted to buy but need loans to do so. I had to leave a message because no one answered, but they never returned my call. Maybe they wish they could get some good interest rates themselves. I would think that as a company who wants to sell their products that they would at the very least be able to tell potential customers which loan institutions had good rates for Airstream loans and help their customers to buy more products.

gc24 03-27-2009 03:04 PM

Yea, you would think so.

Bluto 03-27-2009 03:10 PM

Well. this is unbelievable, but as soon as I posted that last message # 9. I received a call from Jackson Center. They will have an area rep from Airstream call me to see if he can help.
I'll update this next week if I find out anything good.

53flyingcloud 03-27-2009 03:26 PM

Yes, there used to be..
 
Quote:

Originally Posted by Bluto (Post 680927)
I find this thread interesting, hope we hear more info on this subject. I too would buy another Airstream if the loan rates were better. I called Jackson Center last week to see if they had any solutions to help people who wanted to buy but need loans to do so. I had to leave a message because no one answered, but they never returned my call. Maybe they wish they could get some good interest rates themselves. I would think that as a company who wants to sell their products that they would at the very least be able to tell potential customers which loan institutions had good rates for Airstream loans and help their customers to buy more products.

There was a time when Airstream did offered a RV loan program but, the requirements was extremely tight and, YOU had to have a outstanding credit rating. My experiences: There were only a very, very small handful of people who would fitted that profile.
Good Luck 2 you~ it can be done..
53FC

Mike Leary 03-27-2009 03:31 PM

Keep checking, with the economy like it is, you'd think they'd give a much lower interest loan just to keep some cash flow going.

gc24 03-27-2009 03:47 PM

I applied with Essex Credit today, so let's see what they come up with on Monday.

VIKING 03-27-2009 11:54 PM

If you have access to a credit union it will probably give you the best deal available. Right now trying to finance anything is a chore. In a short time you may find things easing up a bit, though.

Personally, I would wait if you can't get favorable terms now, or buy vintage for cash and get out your tools.

Wells tried to give me a home loan at 8% Two years ago. I got it at 5-5/8% at a local lender a few weeks later. They are off my list of potential lenders.

Rich

ROBERTSUNRUS 03-28-2009 12:10 AM

Quote:

Originally Posted by gc24 (Post 680863)
Trying to finance a used A/S and my Bank(Wells Fargo), got me a loan for the full amount for 15 years, 13.8%, and a payment of 409.00 a month. Doesn't seem right. For that deal, maybe I should buy a new one.

:) Hi, you stated "got me a loan for the full amount....." does this mean that you are financing the full purchase price of the trailer? [no down payment] That in it'self would increase the loan percentage rate versus, maybe 20% down.

gc24 03-28-2009 07:50 AM

The credit union wasen't much better as I wrote before. Essex requires 10% down.

1cericks1 03-28-2009 11:14 AM

I finacned a new one in July 08 for 7.5%. They told me the rate would go up if I put down a deposit, something about a better rate if the total loan amount exceeded some threshold. So it ended up being 100% finance for a 15 year loan. Clearly I owe more than I could sell it for and probably will until year 13 or 14.

My thought process at the time was that with the interest deduction, if I could generate a 6% return or more on the money invested in the market, I'd end up better in the long run with the financing than paying cash. So far it's been a bad choice, but who knows what things will look like 10 years from now.

Bluto 03-28-2009 11:17 AM

I heard from the Airstream Rep. today(Saturday morning). He told me that the dealer is the best place to get local help with financing and suggested to push in that direction, which makes sense. The dealer I spoke to last week said rates are not good at this time and I might do better with a bank that I usually deal with for other banking needs. So, I guess to push the dealer to find better rates would be the way to go since my local bank is talking high rates too.
The rep. also said that AS will have something in place on financing sometime around mid May but warned (as he put on his saleman hat) that the 2008 units are getting bought up fast and that there won't be the same amount of good deals to be had.

Bluto 03-28-2009 11:20 AM

Quote:

Originally Posted by gc24 (Post 681095)
The credit union wasen't much better as I wrote before. Essex requires 10% down.

What term and interest rate were they talking about with the 10% down?


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