How to Get the Best Interest Rate
Face it – Everyone wants the best interest rate available. However, the lowest interest rates do not always coincide with your financial goals. You may or may not be prepared to get the best interest rate. Cash down payments or getting out of an unwanted trade-in, may be reasons to pay a little higher rate to make a deal work for you. If you are looking for the best rates and terms here are some tips:
1. Credit Score – Interest rate discounts are sometimes offered if your score exceeds 800. While credit scores are important, they are not everything, and everyone seems to be very sensitive of their FICO rating. This can be somewhat misleading since there are several different rating agencies, as well as rating models. Each lender has specific criteria that they will request from the credit reporting agencies, based on the type of financing requested. Remember this: The only credit score that matters is the one the bank looks at when you apply for a loan. Newcoast TIP: High credit scores do not always equal good financial sense.
2. Down Payment – While a lender may require a minimum down payment or not, most lenders have down payment or LTV (loan to value) discounts. In Marine or RV lending down payments can range from 10-20% but a down payment of 30% can sometimes get you a rate discount. Remember that down payments can come from cash OR Trade.
3. Loan Terms – Marine and RV terms are generally 10-25 years in amortization. Your lender may offer terms for your loan as long as 20 or 25 years. However most prefer that the term is shorter than that. Many lenders offer rate discounts for terms less than the maximum.
4. Adjustable Rate Options (ARM) – Some Marine and RV lenders will offer fixed/adjustable rates programs that are often significantly lower than the fixed rates. In rising rate environments, this can be an affordable option with lower payments and overall cost of funds. This is a great option for buyers who like to get new boats or RV’s every few years. Newcoast Tip – Make sure you ask your finance advisor if they can refinance the loan if you change your mind and decide to keep it.
5. Be Prepared – Do your homework and check around with a few banks. Know your credit rating, provide your loan officer with all the documentation they request. Limited Doc loans are coming back, but still at the discretion of the lender. Many lending institutions offer lower rates with a complete financial package as opposed to the quick application only loans.
6. Call Newcoast – Newcoast Financial Services has all the lending options mentioned above, and can guide you to the best rate and term to suit your needs. At Newcoast, there will always be someone to answer the phone and give you the best advice to make your boat or RV dream come true. Only takes a minute to call us, and time is money! Call us at (866) 639-2627.