Camper financing is often the most complicated part of buying an RV. Banks, dealerships, and credit unions offer financing options to potential buyers and the presence of alternatives can be to your advantage.
Before you venture into the world of camper financing, your first step should be to figure out what the term entails. With a proper understanding of RV financing, you can then determine whether or not you meet the requirements for an RV loan.
What is camper financing
Camper or RV financing comes in the form of a loan used to purchase a recreational vehicle. Due to the high cost of RVs, buyers often depend on some financial aid to complete the purchase.
Depending on the sort of camper you intend to buy, whether new or used, you can always find a lender willing to help you finance the purchase. The overall cost of the RV, as well as the loan terms, will determine the length of the loan.
It’s not unusual for an RV loan repayment to last as long as 15 to 20 years. You can utilize a financial services SEO agency to help you find a dealer, bank, or online lender to finance your camper or RV. Then it’s time to decide if you meet the requirements for the loan.
Factors to consider before applying for camper financing
1. Your credit score
To qualify for an RV loan with good interest rates, you need a high credit score. A credit score within the 600-700 range or higher would be sufficient. Before applying for camper financing, review your credit score to have a realistic view of your chances of success.
If your credit score falls below that range, you can still qualify for a loan. However, you’ll have to be more flexible and accept a higher interest rate.
2. Secured or unsecured loans
Consider the type of loan you want – a secured vehicle loan or unsecured loan. Secured vehicle loans typically come with lower rates as your vehicle would serve as collateral. Also, secured loans pose a better option if you intend to finance a large RV purchase or you have bad credit.
On the other hand, unsecured loans give room for pre-qualification. This way, you can compare the loan terms and rates without affecting your credit score. They also pose less risk and are usually funded without much delay.
3. Down payment
Another factor that will determine if you meet the requirements for camper financing is your capacity to provide down payment. Most lenders typically ask for a 20% down payment before you receive the funds.
Bear in mind that this requirement ultimately depends on your credit score. If you have really good credit, you may be able to bypass the down payment requirement and qualify for the loan. However, with bad credit, you will be required to provide this sum.
It’s also worthy of note to point out that the loan amount can determine whether or not your loan application is processed or denied. Most lenders, especially banks, do not see loans in amounts less than $10,000 as a worthy investment.
So, the make and cost of your RV also have a role to play. If you’ve come to terms with the factors mentioned above, you’re one step closer to qualify for camper financing.