Let's face it, financing a lawn mower can be intimidating and scary. As you're looking for equipment, regardless of the brand, keep these six tips in mind!
1. Every time your report is pulled, your credit score lowers.
I've had several people through the years come in and tell me, "I know we'll be approved, we've been pre-approved by two other lawn mower manufacturers." BIG MISTAKE! Only apply for credit once you've finished shopping or at least narrowed down your choice.
2. Not all lenders go by credit score alone.
If your credit score is lower than you like, don't just assume you can't get financed. You may not qualify for the 0% programs, but sometimes lenders will come up with an alternative rate they can offer. Each case varies.
3. Bankruptcy is no longer the "Kiss of Death".
In the old days, once you declared bankruptcy, lenders avoided you like the plague. Not anymore! The general rule of thumb is at least two years after bankruptcy has been filed, some well re-established credit will help you get what you want.
4. Beware of the "No Interest if Paid in Full Within ___ Programs."
This is a wonderful deal if you work it right. If you know without a doubt you can pay it off in full within the time period, go for it. If, however, there is even the slightest chance you may not be able to, run. In most cases, after the free period is over the interest rate will revert back to the of purchase and be high.
5. Beware of the "0% for ___ Months with Equal Payments."
This is very similar to #4. This sounds wonderful, but is a case where you need to be sure to check the details. Ask if at the end of the 0% term the equipment will be paid for in full. These plans are designed to make you think your equipment is paid in full, then slap a high interest rate reverted back to the date of purchase.
6. In most financing situations, and with most lenders, fees apply.
These typically are UCC Fees and documentation fees. UCC Fees are for UCC Forms filed with the Secretary of State. It’s basically a official recording of the financing transaction. In the unlikely event the loan becomes defaulted, the lender is protected when the borrowers’ assets are divided by the courts. These tend to vary from lender to lender. Some lenders as well as dealerships may add their own documentation fees to the deal. Be careful you don’t offset any savings on the price of equipment with documentation fees.
Hopefully this guide will help you when you are ready to start shopping. The bottom line is, don't be afraid to ask questions! Be sure the finance program you've selected is really the best one for you!