How to Finance an Enclosed Trailer in a few easy steps:
So you’ve picked out the perfect trailer from Renown’s great lineup of enclosed cargo trailers. Maybe it’s that monthly special blacked-out 7 x 16 enclosed cargo trailer you’ve had your eye on or maybe it’s a beastly 38’ triple axle Gooseneck for hauling your heavy equipment; whatever trailer you’ve decided on, there’s an element of dread when you have your heart set on something and then have the realization that you’ll have to figure out a way to pay for it. Financing may very well strike fear in your heart as you picture the small office in a car dealership where you’re sure you’re about to get bamboozled. Well, fear not! Read on as we deep dive into the world of trailer financing so you can see it’s not so scary after all.
The Enclosed Trailer Financing Process
When you first decide on a trailer and want to finance it, you’ll generally need to go through a lender services provider. Lenders themselves do not typically deal directly with borrowers but rather utilize financial services providers to do the behind-the-scenes work of collecting information, analyzing basic creditworthiness, and getting the necessary documents processed. At Renown, we’ve partnered with three different financial services providers whose mission of putting clients first aligns with our own – Rock Solid Funding, Sheffield Financial, and Trailer Solutions Financial (TSF). Rock Solid Funding surpasses our expectations time and again. As with any large purchase, you should get multiple offers for your new loan. A few basis points lower on a loan’s interest rate can save you thousands over the full term of the loan, so always get several different quotes to see who can put together the best package for your unique financial situation.
Once you’ve narrowed down the financial services provider you wish to use, you’ll go through a formal loan application process. The servicer can walk you through the process, first discussing the necessary approval information, which should include the amount of the down payment, if required, specific interest rates and terms, and the expected monthly payment for your loan based on all the information generated.
After you’ve filled out the initial application, the servicer will review your information, pull your credit report, and generally contact you to discuss next steps or fill in any gaps before sending the final documents for execution. For those with good/excellent credit, this initial review can take as little as 30 minutes with some servicers. The final loan documents will then be generated to complete the loan application. The Renown team or the servicer will provide you a copy of the loan documents and retain the originals to send directly to the lender for final approval and funding, or in some cases they may be able to execute the loan themselves. If everything checks out, funding usually occurs in 24 to 48 hours, depending on the financial services company.
What to Look for with Loan Rates & Terms
You may have heard in the news recently that interest rates continue to fall as the Federal government seeks to balance the economy. What is true for your home’s mortgage rate is also true for your cargo trailer financing as interest rates are at some of their best levels in years making now a very opportune time to secure financing for your enclosed trailer purchase. It’s important to note that interest rates can vary widely between different lenders. Your financial services provider will be able to “shop” different lenders and generally are able to obtain the best rates and terms.
Rates for enclosed trailer financing can run on the low side around 5% all the way up to 20%, all depending on the credit score and financial history of the applicant. Loan terms vary, as well, running from typical periods of 12 months, 36 months, 3 years, and even up to 15 years. However, many lenders can make specialized terms based on your situation – you just have to ask. Remember, the shorter the term, the less interest you will pay, and the less you will end up paying in total for your new enclosed trailer at the end of your term period. As an added bonus, most of the financial services providers we utilize have no prepayment penalty if you choose to pay down your loan faster than what was dictated on the original term.
There is a big difference in different loan packages based on how you intend to use the enclosed trailer you are financing. Whether for business or personal use, you can find the financing that works best for your situation but it’s important to consider the differences therein as rates and impacts to your credit can vary significantly. The key is to know all the options you have at your disposal and to make an informed decision based on all of the information available to you before you sign on the dotted line. The two most common financing types for enclosed cargo trailers are consumer financing and commercial financing. We’ll highlight the differences below.
- Consumer financing: this type of financing is directly tied to your personal credit. Use this type of financing if you are intending to use your cargo trailer for recreational purposes i.e. you are not planning on using the trailer to make money. If you have too much personal debt, your credit score can be negatively affected which ultimately will make it more difficult and more costly to secure financing on purchases.
- Commercial financing: this type of financing is tied to a business where the asset is being used to produce a return of some kind for the business where the trailer will be employed. Note that commercial financing is intended for legitimate business operations.
The difference between consumer financing and commercial financing is crucial as it can determine the interest rate and terms available to you based on which route you choose. Based on how you wish to employ the cargo trailer over its useful life is how you can best determine which route is best for your situation.
Trailer Financing with Bad Credit
You may have read this far and be thinking this all sounds good but it can’t possibly apply to those that have bad credit. Well, you would be wrong. Interest rates being lowered has helped ease the restrictions of some lenders as they seek to stay ahead of all the borrowers seeking new loans and refinancing of old loans. Now is the perfect time to take advantage of lower interest rates and more flexible terms as lenders battle for borrowers’ loans. If you do have a somewhat less-than-stellar credit score, know your interest rate will probably be a little higher and some lenders may require additional application steps like income verification, debt to income verification, two years of installment history, or the requirement of a cosigner – but don’t be discouraged, there are plenty of loan packages available that can match your unique situation no matter where your credit score may lie. Our financial service providers help find financing options for applicants with credit scores as low as 530.
How to Fit a Trailer to Your Budget
One of the coolest aspects of Renown Cargo Trailers lies in our ability to source the perfect trailer to meet your needs. If that’s a completely customized, never-before-seen, edition of a 6 x 12 enclosed trailer, so be it! We get pumped by being able to find the right combination of functionality, accessories, and options that meet the unique requirements of our clients. We encourage you to come to our sales team with your budget and your needs. We’ll figure out the right combination to get you what you need, get you financing if you need it, and get you on the road with your new enclosed trailer.
Ready to Select a Trailer and Review Your Financing Options?
When you’re ready to start looking seriously at the trailer options available to you, the Renown team stands ready to assist however we can be most beneficial to you. We stand behind our commitment to honor God in our everyday lives so see giving our very best at what we do as just one small way to accomplish this. We’ll never push or prod you into a sale, we’re just as happy to send you to a competitor over selling you a trailer that isn’t right for you. That’s the Renown difference and why we enjoy so many positive reviews and have so many repeat customers over the years. We also pride ourselves on after-sale service. A year from now, you may be surprised to get a call from your trailer salesmen just checking in to make sure you’re still pleased with your purchase and to see if there’s anything at all we can do to make the experience even better. At Renown, you come in as a client and leave as family. That’s not a gimmick, it’s just who we are. Call, click, or come in to any of our three locations across the great State of Georgia today. We look forward to meeting you!