Your credit score is poor. Your debt to income ratio is higher than it should be, you have missed a couple of payments on your mortgage and your car payments are several months behind. You are considering buying a travel trailer or RV, either to live in so you can offload that mortgage, or to take your family on affordable vacations. This is a scenario many Americans are familiar with, and trying to finance a new purchase with a credit score of 620 or lower is difficult, but not impossible.
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Find out what your credit report says. Instead of relying on the credit checks potential lenders do, get a free copy of your credit report online from one of the country's three consumer reporting companies. You will be able to check for inaccuracies, and see exactly where the problem areas are reflected, then prepare an explanation and documentation on these questions to support your application.
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Decide on the trailer you want to buy and whether you can afford a new trailer or a used vehicle. If you purchase a new trailer, you might be able to apply for in-house financing from the manufacturer or retailer. If you are buying a used trailer, you will need different financing options depending on whether it is a private purchase or purchased from a dealer.
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Calculate your budget, taking into account all monthly expenses, to be sure that you can afford the monthly installment. Take this budget with you when you approach lending institutions, so you can verify that you are able to afford the payments on the trailer.
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Approach banks, credit unions and other potential lenders for quotes to finance your purchase. The purchase of a trailer is a secured loan and is therefore a lower risk than an unsecured loan, so even with poor credit you might get a good deal.
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Ask for written quotations from the institutions you approach. Be honest with them about your credit score, and ask for financing options with poor credit. Check that the interest rate and any escalations are stated on the quote for trailer financing so that the rate can't be increased without your knowledge.
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Find out whether the installment agreement covers the full purchase price of the trailer, or if a final "balloon" payment applies at the end of the term.
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Choose the institution that you are willing to borrow from and ask for a copy of the draft contract. Take this to your legal adviser before signing it, to make sure you understand the terms and conditions you are agreeing to.
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Pay your monthly installments on time and in full. This will help to repair your poor credit while you enjoy your travel trailer.
