Financing options?

[jrbarnard]

I am not sure I saw anything on this, just pieces in other threads.

So, other than the two options most places have:

1 - Some % finance charge with 0 $ down over 60 months

2 - 10% down and "0%" (which is really not 0%) over 84 months.

I heard something about an agriculture loan of some sort with like $1000 down?

Sure, I could save up 5k, over time.. but would LIKE little or no down and a low payment.

What sort of financing is out there?

What 'pitfalls' do I need to watch for?

I think I have like a 720 credit score.. so not bad.. might be 750, depending on the agency...plenty of credit history.

77 acres of land (330 really, but only 77 in my name.. heh)

Oh.. forgot to add. Not wanting something for nothing.. but to me.. the low monthly payment is way more important than the number of months or total of payments.

Thanks!

Russ

 

[MinnesotaEric]

Your lender will toss the highest and lowest FICO scores and run with your middle FICO score and then determine your fitness to service any existing debt along with new debt as a ratio. For more information on FICOs scores, check out post #20 in this thread.

As a rule, local credit unions offer better rates on loans they do write but may not offer financing on AG equipment or equipment in general. The reasons are two-fold: First, resale isn't predictable: the same piece of equipment may be owned by the kindest and gentlest owner-operator or it maybe owned by a rodeo clown who likes to grab a bucket of dirt in the bucket and balance the machine on its front axle as a pastime between jobs. The same amount of hours can have different kinds of wear on a machine depending on how it was treated and operated. Second, there isn't a good way to sell equipment notes on a secondary market, thereby allowing the lender to distribute their risk to a third party while also increasing the original lender's income by continuing to offer the third-party-buyer of the note, servicing services on that note. As a result, the equipment note is kept in the lender's own portfolio, and because the note is kept in the lender's own portfolio, expect higher interest rates from non-OEM lenders and their financial arms.

If you're interested in the lowest monthly fees, then the longest duration note you can get is the way to lower your payments. However, ask your lender to compare all fees, expenses, and interest paid when fully amortized for each of the lending products offered. In this way you can make a lucid choice between lending products and run with the product that best suits your needs.

Another option to look, but only if you can expense the cost on your taxes, is leasing. Leasing will lower your payment still more, but is money down a hole if you cannot expense the cost of leasing.

If I were you, I would shop local lenders by calling them and visiting them and asking if they offer loans on the type of equipment you hope to purchase. In this way you learn what is offered as well as options that are not available at the equipment dealer such as home equity loans and lines of credit—all of which could cover the cost of your equipment and may be at a lower interest rate too boot.

The take away from whatever financial products you look at is to review fully amortized expenses so that you can compare dramatically different lending products to each other and run with what best suits your needs.

 

[ace10]

Watch for insurance requirements from the various lenders.

 

[kcflhrc]

I did an Agricultural loan through John Deere. They asked for $1k down, which I thought was fair, and 0% financing for 5 years, yes to all the nay sayers, it is a true 0% finance. Cash and finance price was the same. Insurance on the tractor for the life of the loan was $330, one time charge. I financed right at $18k and my payment is just under $300 per month. My local credit union would only do a unsecured loan at a high rate. Doing a Home Equity loan could be a very bad idea, especially if you cant make the payments and you used the home as collateral. Hope this helps.

 

[bigbull338]

1 if you owe on the tractor and its dealer financed bank or other financing you must have ins on it till its payed off.the ims cost is based on the cost of the tractor.the tractor i bought in 2013 is financed through the bank.the 2014 tractor is financed through the dealer on 0 int and 5yrs to pay.