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A Guide to Financing Your Tractor

Dec. 1 2021 Buying Guide By CCR Sales and Service

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If you don’t want to spend a substantial amount of your savings on buying a tractor, opting to get it funded can be a wise financial decision for you. Check out our guide to learn all you need to know about tractor financing. For more information or help set up a plan that works for you, come down to CCR Sales and Service. We are in Essex, VT, and we happily welcome our friends from Burlington.

Consider a Budget

Before you approach a lender or start exploring the different loan options, set up a budget. Research the cost of tractors and figure out the options you want to check out. Once you know how much you can spend on purchasing a model, you can narrow down your choices to the vehicles in your affordable category. There are a few other things you’ll need to consider, such as:

  • The down payment of 10% to 20% of the tractor's total cost.
  • The rates and terms of the loans that’ll help you get the right option.
  • The various overhead expenses, such as maintenance, fuel, and other costs.

Choose a Loan

As you may know, when you obtain a loan, your lender gives you a particular amount of money all at once. You use this up-front money to fund your tractor, and you’ll need to repay this amount, plus interest, in regular monthly installments for whatever tenure you choose.

There are two types of loans that you can opt for—secured and unsecured. A secured loan is one in which you use your tractor as collateral. This means, in case you default on your loan, your lender can repossess your vehicle. This type of loan comes with longer repayment terms and lower overall rates.

An unsecured loan doesn’t need you to provide any collateral. However, this type of loan comes with higher interest rates and a lower amount of loan money than you get in a secured loan.

Where Can You Get a Loan?

Various sources deal in tractor loans, such as banks, credit unions, and lending institutions. Ideally, you should obtain a personal loan from a bank you use for your personal or business financing needs—they can offer you a lower interest rate than others. However, this isn't mandatory. Even lenders that you don’t use can also help you with a personal loan.

You can also seek a loan from credit unions, as they offer lower interest rates with a higher total loan amount. However, the interest rate will depend upon your credit score and the amount of money you need.

We hope this guide helps you understand the various tractor financing options. If you have more questions or need help choosing a plan that’s perfect for you, visit CCR Sales and Service. Our finance experts can address your concerns and help you set up a payment plan for yourself. Our dealership is in Essex, VT, where we proudly serve our patrons from Burlington.