8 Tips to Help You Get a Loan for a Skoolie!

As people get more innovative, the changes we are seeing within the housing industry are constantly happening before our very eyes. Now more than ever the Skoolie market appears to be at the height of its popularity with many people opting for a more nontraditional lifestyle. Skoolies are buses, mostly school buses, converted into a house.

A Skoolie can be either mobile or stationary depending on the homeowner’s preference. Skoolies are typically converted by hand, with the use of power tools. to specifications provided by the homeowner or contractors. With all the different loan options out there, you might be wondering how to find out the best option for you.

You Need to Understand The Type of Loan You Are Applying For

A Skoolie is classified as a Tiny House so, unlike a typical home, you can not apply for a mortgage on one. Along with that, because it is no longer a vehicle you also can not apply for an auto loan for your Skoolie. This restricts the loan options available to you compared to other types of assets.

Instead, you will need to apply for a personal loan, which isn’t a difficult task. You may be asking yourself, “What is a personal loan?” A personal loan is simply that, a loan that you may use for many things. These loans tend to have a relatively low interest rate, but that will also rely on your credit score. If you have a better credit score, the more likely you will be approved for a personal loan and be charged lower rates.

Make Sure You Research All of Your Different Loan Options

A personal loan is a smart choice for someone looking for a Skoolie since they are a more expensive option in terms of Tiny Houses. When searching for a personal loan, you might find yourself overwhelmed by the number of entities willing to let you apply for one. Be sure to thoroughly go through all of your options. Three well-known companies that will allow you to apply for a personal loan are:

You will find that each company has its own rates when it comes to personal loans. For instance, Discover has a fixed APR of 6.9% to 24.9% when Wells Fargo has rates starting as low as 5.7% APR.

You Should Always Understand How Interest Rates and APR Work

APR stands for Annual Percentage Rate. This refers to the amount of money the person who borrowed the loan will have to pay every year in interest for accepting the loan. This includes all forms of interest, including that which was paid in the form of monthly payments. It’s a calculated percentage based on the size of the loan, the credit score of the person borrowing the loan, and the time range it is expected to be paid within.

This is an important factor to consider when looking into Skoolies. They are one of the more expensive options in terms of Tiny Houses. The cost of converting a bus into a Skoolie could cost anywhere from $10,000 – $30,0000, depending on the design. And that number is expected to increase if you have to acquire help from an outside contractor.

When you are talking about numbers in the 5 figure area, it is important to take interest into account. Make sure you will be able to make the payments on whatever loan you might be looking into.

When You Are Applying For a Loan Try a Personal Bank

Most banks are known to have lower APR and interest rates than other online competitors. Online may seem easier, but in the long run, going to the bank may end up saving you some money.

Going into your bank also provides you with the opportunity to get personal about your personal loan. Any information you need will be provided for you without you having to search for it. There will also be less of a chance of any miscommunication or misunderstanding when it comes to applying or signing for your loan.

Be Sure to Always Check Your Credit Score Before Applying for a Personal Loan

When it comes to checking your credit score, you have countless options. The most popular of those would be Credit Karma If you do not wish to use Credit Karma you will be able to find many more sources to check your credit score like:

If you are looking to apply for a personal loan, checking your credit score is vital because poor credit often means high-interest rates, or worse you may even be denied for the loan in general. If you have bad credit you don’t have to worry, there are many different ways to improve your credit score.

Building a Better Credit Score is Easier Than it Seems

According to the credit reporting agency Experian “There’s no set timeline for rebuilding your credit. How long it takes to increase your credit scores depends on what’s hurting your credit and the steps you’re taking to rebuild it.”

Something simple to do and helps to build credit is to make your credit payments on time. Another thing you can do is to open up an account with a new bank or credit card company and begin building and paying off your bills immediately.

Probably the most important way to secure a good credit score would have to be paying off whatever past debts you may have. Past due payments might appear as a blemish, but in the end, it will improve your rating.

If You Can You Should Save Money for a Down Payment

Having money to put down towards a loan will go a long way with credit companies and banks. This shows that you will most likely be able to make the future payments that they require. It may also help to reduce the over APR or interest rates. If you don’t have a down payment many creditors also allow certain items to be used as collateral.

If you aren’t in a rush to get a loan it is highly recommended to save up a little bit of money to use as a down payment. Always research whether or not your loan provider has any specific requirements that you have to meet with your down payment. Not knowing ahead of time can be a hassle in the future. Now you have your credit score, you’ve found the company you wish to apply for a loan with and you have a down payment ready.

All That’s Left To Do Is Applying

Be sure to read your personal loan application carefully so that you fully understand what you are getting into. Always ask questions that you are not certain of the answer to. There is no such thing as too many questions.

Applying for a loan is a huge step for a homeowner. It tends to mean that they have everything to begin the transition to a new home. Some banks offer you an instant response to your application, others can take up to a couple of weeks.

In most scenarios, if you are approved you will have the money in your bank account within 5 business days. Although many factors go into whether or not you are approved for the loan. These factors include:

Employment status
Pay Rate
Credit Score
Existing Loans

Banks and creditors reserve the right to deny you a loan even if you think you may qualify. If you come into the situation prepared there shouldn’t be any issues though. Just make sure you communicate well and you understand the terms of the loan.

Disclaimer:

Ridicubus and it’s employees and affiliates are not financial advisors. We recommend contacting a professional when making any financial decisions that are life impactful.

Thanks for reading and we look forward to seeing you out on the road!