RV Financing, what do you need to start?
So, you want to finance an RV, but you don’t where to start. Well, here are the basics!
RV Loan
First off, you will need an RV loan, however those types of loans are more difficult to get compared to your regular car or house loan. The reason being, is the banks do not consider an RV to be a necessity. This is more of a “toy” in the banks eyes. Many people use it for their primary home these days, especially in California where rent is high. Though, living in the RV wears it down and causes it to depreciate faster, most banks do not like that and will not provide a loan if you disclose you are living in the unit. Whether you are using an RV as your new home or for leisure activities the requirements remain the same.
Down Payment, Term Length, APR Rates
Most banks require at least 10% down and loans can range from 96-240 months, very similar to a mortgage. At some banks, the smaller term, the better rate you can get, but obviously your monthly payment is going to be a lot higher. Annual percentage rates are strictly tied to credit score and credit history. Most banks range from a 4.99%, but your rate can go up to 17.99% or higher. Those are average terms that I have seen throughout my career. A great place to start is your own credit union, they may provide a lower rate if you have a reputable relationship with them. This way, you work directly with your credit union or bank and they can pre-approve your for a certain amount. This will provide lee way for you when shopping for an RV. Showing a pre-approval letter to the dealership your are shopping around is more impressive and shows that you’ve already done your part and you are a serious buyer. A dealership will take you more seriously and help you find what you are looking for because they know they can close a deal with you if they can match your needs and wants. Though, dealerships highly prefer that you get a loan through them as there are incentives the banks give them, but they will not know whether you qualify until you go through the process of running credit and submitting you to the banks they work with.
Check out RVT.com, they allow private parties and dealerships to post on their site. They have a large variety of RVs, shop here for the best price.
Most RV dealerships are just like car dealerships, sales people are waiting for a deal and they can be hounding. That doesn’t mean you should be intimidated! Always throw out an offer, it never hurts.
Once you make a satisfying deal, check out What to bring to get your started on your first RV trip!
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