Tractor Financing Tips

Tractors are expensive and if you’re on a tight budget, it can be difficult to have the full amount of money on hand when you go to purchase one. However, financial constraints should never hold you back from getting the machines you need to get work done around your farm or other property. One way to make your purchases more affordable is to get a loan. To help you figure out what your options are, we have compiled this guide on getting your tractor financed.

Set a Budget

First off, you’ll want to make sure you’ve got the budget available for a down payment on your tractor. Generally speaking, you’ll need to put down anywhere from 10% to 20% of the total price of your tractor at the time of purchase. It doesn’t matter whether you’re buying a compact model or a bigger one, or if it’s new or used, you’ll need to create a budget that you can stick to and that allows you to make affordable monthly payments on your loan. Don’t forget to factor in extra costs like fuel, attachments, and maintenance.

Know Your Credit Score

Another important step when looking into tractor financing is having a good credit score. Your credit score impacts how much of a loan you can get, how high the interest rate is, and how long the repayment tenure lasts. It even impacts whether you get the loan in the first place or not! The higher a score, the better it’ll be for you, so try to get your credit score over 700 by paying off other debts and making judicious use of your credit in order to succeed at obtaining a loan.

Your credit score can also determine the type of loan you can get. Unsecured loans don’t involve the repossession of your tractor if you default on your payments, but they have higher interest rates. Secured loans use your machine as collateral, which means that your equipment can be repossessed if you default. With a secured loan, interest rates are lower and borrow rates are usually a bit higher.

Your Lending Options

When it comes to financing a tractor, there are several options, from banks to credit unions to lending institutions. Even if you don’t use a specific bank for your banking needs, they can still help you obtain a loan. However, if you choose a lender that you already bank with, the interest rate will be lower.

Ready to get a loan? Talk to the staff at T&E Small Engine in Floyd, VA, about various tractor financing options to ensure you get the deal you want. We proudly serve all those in Roanoke and Christiansburg.