But sub-prime lenders look at other factors when financing what seems to be a frivolous purchase, especially in light of a lagging economy. An obvious reason why sub-prime lenders, credit unions, and finance companies can overlook past transgressions is that there is still money to be made from financing borrowers with potential to pay up. Today’s loan officers realize that consumers who are gainfully employed; own a home or other real property (including the RV for collateral); and have savings, checking or retirement accounts might be a good risk for bad credit RV loans in spite of past bankruptcies or foreclosures. High interest rates charged to high-risk borrowers, along with the cost of financing boosts the bottom line for lenders willing to take a chance.
Anyone who has read a newspaper or Internet article is well aware of the housing market slump, sub-prime lending crisis, and sky high interest rates. Economic woes such as these have created a new sector of employed consumers who cannot qualify for prime loans, but may still be able to meet monthly obligations with less stringent lending requirements. These consumers have less than the 700 to 780 consumer credit scores prime financing institutions demand. Finance companies may be willing to lend bad credit RV loans to a borrower with a 640 score or one who is nearing the seven- to ten-year mark of a Chapter 13 bankruptcy, also known as a wage earner. Chapter 13 filings require debtors to pay monthly installments to a court-appointed trustee who, in turn, pays creditors in an attempt to satisfy delinquent debts. Consumers coming out of a Chapter 13 have faithfully made restitution and will soon have a clean slate. Potential creditors also realize that federal law prohibits debtors for filing again within a certain period of time between bankruptcies, therefore these consumers may be considered a good risk. Consumer credit counseling agencies can also help bankrupt borrowers get filings expunged from records, thereby boosting scores.
Obtaining bad credit RV loans may also be possible for debtors who have gone through foreclosure due to high-interest adjustable rate mortgages (ARMs), the bane of many homeowners’ and lending institutions’ existence. A homeowner who qualified for an adjustable rate mortgage several years ago may be viewed as a victim of the housing market collapse, led unwittingly into a home loan arrangement which proved to be more than the innocent homebuyer could handle. If mortgage payments were paid consistently just prior to the interest rate increase, lenders could look favorably on borrowers who made valiant and sincere efforts to honor financial obligations. Bad credit RV loans may be extended to those who have proven efforts to rectify past financial failures by obtaining secured charge card accounts, consolidating delinquent debts, or slowly rebuilding creditworthiness by making payment arrangements to satisfy creditors. High-risk borrowers may also win favor with future lending institutions by working with reputable consumer credit counseling agencies to repair and restore creditworthiness and a good reputation for paying on time. “A good name is rather to be chosen than great riches, and loving favor rather than silver and gold” (Proverbs 22:1).
Retirees who have fallen on hard times, but are eligible to withdraw monies from Individual Retirement Accounts (IRAs), 401ks, and Certificates of Deposit may also be excellent candidates for bad credit RV loans. Long term savings accounts carry penalties for early withdrawal; usually before age 59 and a half or at other maturity dates. In light of U.S. economic woes, especially in the housing market, it is entirely conceivable that retirees could incur money problems trying to make ends meet while holding onto a retirement nest egg! However, once CDs and employer-provided savings accounts mature, seniors could experience a windfall of ready cash to make their golden years financially secure. The prospects of future financial security could make lenders offering bad credit RV loans take a second look at senior adults looking forward to retirement.
High-risk consumers seeking to obtain bad credit RV loans should first order copies of consumer credit reports from one of three reporting agencies in the U.S. Consumers should carefully review report findings to assess whether delinquent or discharged accounts can be purged from the file. Any discrepancies can be addressed with creditors’ representatives via a telephone call, email or correspondence. Making payment arrangements with creditors to handle delinquent debts is the first start toward boosting report scores. Before shopping for an RV loan, high-risk borrowers should also review personal budgets to see if payments are manageable. Borrowers with low scores can expect to pay higher interest sub-prime rates. However, the pleasure of traveling cross country for fun in the sun with family and friends just might offset the pain of paying sky high interest for years to come.