How to Finance Vehicles, Trucks, and Summer Toys Without Hurting Your Credit Score

With Father's Day on the horizon, this might be a great time to think about splurging on a new summer toy. There are so many to choose from, including side-by-sides, quads, and all-terrain motorbikes, sure to bring some excitement into your life. If you have been dreaming about camping in style in a luxury RV or taking a motor boat out on the water for some summer fun, there are several options you should consider before taking the plunge.

Am I Ready for My New Summer Toy? 

Consider Your Lifestyle

To make the most of your summer toys, you will want to get ample use out of them. If you are looking to buy an RV or a motorboat, how often do you think you will use it? Do you have the equipment to haul your toys? Do you own a truck and have a trailer to pull them to and from your home to your recreation site?

If you want to buy an RV or a camper, do you have the flexibility in your schedule to accommodate multiple trips? Campsites may be fully booked on weekends, so having a flexible schedule to accommodate weekday trips may work out best. 

While it is normal to have a desire for an outdoor lifestyle, your new purchase may end up being more of a bother if you don't have the time to indulge in it. 

What About the Other Costs? 

Maintenance Fees

You will want to maintain your boat or camper just as you would a regular vehicle. Annual servicing, repairs, and replacement of parts due to wear and tear are common, so don't forget to include these costs in your budget.

Insurance and Gas Costs

You need to insure your boats, campers and smaller summer toys to guard against accidents or any other unexpected damage. Fuel costs are also fairly high, so the more you use your toys, the more fuel costs you have to pay.

Storage Fees

Do you have a personal space to store your boat or camper? While there are many storage facilities where you can store your summer toys, the storage fees can be quite high, adding to your monthly costs. 

Try It Out to See if It Is a Fit for Your Lifestyle

If you only plan to use your camper or boat once or twice a year, it may be better to rent them for the time that you use them to save on interest fees, insurance, maintenance and repairs. 

You might also consider joining a boat club to decide if the boating lifestyle is truly for you. 

Should You Take Out a Loan?

If you decide that an RV or a boat is a good fit for your lifestyle, assess your monthly budget to see if you can comfortably afford the loan payments. Include gas, insurance, and maintenance costs in your budget. Be careful not to stretch yourself too thin, as any unexpected costs may result in difficulty repaying your loan. 

What Type of Loans Can You Apply For?

While credit cards are good for smaller purchases, it is important to understand that if you don't pay this debt off completely, you may end up struggling with very high-interest fees that are difficult to pay down. Wherever possible, it is better to apply for a loan. 

Apply for a Secured Personal Loan

You can get a secured loan from a bank, credit union or dealership. It is easy to qualify for a secured loan as you must provide collateral against the loan. In most cases, the borrower will use the purchase as collateral for the loan with the understanding that any failure to make their monthly payments may result in the asset being repossessed. 

With collateral in place, lenders feel more confident and therefore offer lower interest rates than for unsecured loans or bad credit loans. They also tend to offer borrowers longer repayment terms, making the cost of purchasing your summer toy more manageable.

Unsecured Personal Loan

Unsecured loans are offered by banks, credit unions and online lenders and don't require the borrower to provide any collateral. However, the interest rates tend to be higher with these loans and loan repayment terms tend to be shorter than with a secured loan. One type of unsecured loan is a bad credit loan that is offered by many online lenders. 

Should You Take Out a Loan?

If you decide that an RV or a boat is a good fit for your lifestyle, assess your monthly budget to see if you can comfortably afford the loan payments. Include gas, insurance, and maintenance costs in your budget. Be careful not to stretch yourself too thin, as any unexpected costs may result in difficulty repaying your loan. 

What Type of Loans Can You Apply For?

While credit cards are good for smaller purchases, it is important to understand that if you don't pay this debt off completely, you may end up struggling with very high-interest fees that are difficult to pay down. Wherever possible, it is better to apply for a loan. 

Apply for a Secured Personal Loan

You can get a secured loan from a bank, credit union or dealership. It is easy to qualify for a secured loan as you must provide collateral against the loan. In most cases, the borrower will use the purchase as collateral for the loan with the understanding that any failure to make their monthly payments may result in the asset being repossessed. 

With collateral in place, lenders feel more confident and therefore offer lower interest rates than for unsecured loans or bad credit loans. They also tend to offer borrowers longer repayment terms, making the cost of purchasing your summer toy more manageable.

Unsecured Personal Loan

Unsecured loans are offered by banks, credit unions and online lenders and don't require the borrower to provide any collateral. However, the interest rates tend to be higher with these loans and loan repayment terms tend to be shorter than with a secured loan. One type of unsecured loan is a bad credit loan that is offered by many online lenders. 

How to Compare Loan Terms Between Lenders

Some lenders will offer a pre-qualification check.

1. Fill out a credit pre-qualification form
2. The lender will do a soft credit check with the credit bureaus
3. If you are approved, your lender will let you know the terms of your loan.

When you submit a full application for a loan, the lender will have access to information about any other loans you formally applied for. Too many hard credit checks in a short span of time will reduce your credit score and may serve as a warning sign for lenders. Soft credit checks for pre-qualification are not visible to lenders conducting a formal credit check and don't affect your credit score. 

You can prequalify for a loan using our online form. The application is quick and easy!

How To Maintain Good Credit When You Take Out a Loan

When you take out an installment loan, it is important to pay each installment in full and on time, as missed or late payments will have a negative impact on your credit score. When you pay your bills in full and on time, you can improve your credit score and qualify for better interest rates and loan terms in future.

Used Car Dealership Financing in Edmonton

If you are looking for auto financing to improve your credit with a car loan, or to finance your summer toys, contact us. Our advisors can guide you through the process. 

Alternatively, complete our easy online form to get approved for a loan. We provide same-day approvals, so you'll be having fun with your summer toys in no time!