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Recreational Loan Tips


What is your ideal weekend? A day on the lake with friends? Camping with family? Riding solo down the highway? 

No matter if your perfect weekend is on land or the water, a recreational loan can help you make the most of it.

Similar to an auto loan, a recreational loan is a fixed-rate loan on a vehicle. Unlike an auto loan, these vehicles aren’t just for sitting in traffic on your daily commute; these recreational vehicles can include everything from go-karts to yachts. Some examples of vehicles you can purchase with a recreational loan are:

  • Boats range from fishing boats to pontoons, and more
  • RVs are the original “Recreational Vehicle” more commonly known as a motorhome
  • ATVs or All-Terrain Vehicles 
  • UTVs Utility Terrain Vehicles or “Side-By-Sides”
  • Motorcycles, whether new or used

Your perfect weekend doesn’t have to stay a daydream—Arkansas Federal Credit Union can help turn your recreational dreams into realities with recreational loans at competitive rates. To learn more about how Arkansas Federal Credit Union can help, visit our recreational loan page or apply today.

What You Need Before Applying

Each organization has different recreational loan requirements. While some financial institutions may pre-qualify buyers based on rough estimates of creditworthiness and income, a good rule of thumb is that higher-quality information results in higher-quality estimates.

Your financial institution may require more information, but you should consider these things as you prepare to apply:

  • Credit History. Credit score, collections, late payments, and other factors can play a large role in the terms of your loan like the amount of your down payment or your interest rate. For best approval odds, take a proactive approach to build credit—tools like Credit Karma can help estimate your creditworthiness and suggest ways to improve your score without creating a hard inquiry on your credit.
  • Debt to Income Ratio. As the name suggests, the Debt to Income ratio (or DTI) is your monthly debt payments (mortgage, auto loans, credit cards, etc.) divided by your monthly income. A lower DTI indicates that less of your income is going toward debts, while a maximum DTI of 100 would indicate that you spend 100% of your income paying off debts.
  • Estimated Purchase Price. Recreational vehicles can run the gamut from budget-friendly to extravagant. Knowing the estimated purchase price of the vehicle (or type of vehicle) you have your eye on can help you budget and apply for the right amount. With approved credit, a recreational loan may finance up to 100% of a recreational vehicle purchase, including taxes and fees.
  • Employment History. Applicants with longer and more consistent work histories have more favorable odds of approval. Consider not only how long you’ve been at your current job, but how long you’ve worked in your specific industry.
  • Current Income. Not only is your DTI important, but so is your income itself. While some financial institutions may pre-qualify applicants based on stated income, most will require documentation such as a paystub and/or W2 to approve an application. 

Recreational loan requirements are different at every financial institution. As the saying goes, it’s better to be over prepared and underwhelmed than under prepared and overwhelmed. Before applying for a recreational loan, consider these requirements and take a proactive approach to improve your approval odds by building healthy credit and lowering your DTI. While this isn’t a guarantee of approval, it’s a good place to start.

Researching Lenders

You should do careful research before choosing a lender for your recreational loan. Each lender may have different recreational loan terms and interest rates, so you should always do your research before making financial decisions.

Set a Budget

Each financial institution has its minimum and maximum loan amounts. You may not be purchasing the allegedly $4.8 billion History Supreme—the most expensive recreational vehicle in the world (if it truly exists), but you should have a budget so you can get similar estimates from multiple institutions for the same loan amount. This will allow you to make apples-to-apples comparisons between similar recreational loan terms.

Your budget will of course include how much you plan to spend on your recreational vehicle, but it should also include how large of a down payment you’re prepared to make.

Check Interest Rates

The 2020s have not been boring for interest rates. Recreational loan interest rates can vary from institution to institution, or even from day to day, so you should compare offerings from multiple institutions to find the best fit for your needs.

Compare Terms and Fees

Many financial institutions have a recreational loan calculator to help borrowers understand the full scope of the terms and fees that come with a certain loan. The recreational loan terms include the repayment period, interest rate, and any fees that apply to the loan product, as well as any other special conditions of the recreational loan.

Recreational Loans with Arkansas Federal Credit Union

A crisp fall motorcycle ride, using an ATV to plow your driveway or hauling wood through the snow, spring camping trips in a motorhome, or a summer day on the lake—it’s always the season to live life to the fullest. No matter what your style is, a recreational loan is useful for a multitude of purchases and might be the best loan product for you.If you’re already a member of Arkansas Federal Credit Union and are interested in a recreational loan, or if you’re interested in becoming a member, you can research and apply today to learn more. There’s no cost to apply, and the application is easy. Get started today!

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