Have You Considered Financing an RV?

Owning an RV is fun. Seeing the American countryside, the oceans and the beautiful cities is fulfilling and allows us to enjoy the expansive nation we live in. Sadly, RV’s aren’t cheap. That doesn’t mean you can’t own one though. If you have a decent credit score and a strong, steady income, you should be able to qualify for RV financing. There are a lot of ways to get this type of financing so one option shouldn’t be settled upon before looking into the others.

Those Who Shouldn’t

While getting an RV loan is a terrific way to own an RV without paying in full, there are some downsides that should be considered. Those who are not prepared to pay back the loan should never take one out. If you are determined to take one out with poor credit, you’ll only be able to find an unsecured loan. This can mean high interest rates that can’t be kept up with. You may not even be able to find someone who will give you a loan at all.

RV As Collateral

RV financing is usually guaranteed by the RV as collateral. Those who fail to pay back the loan will have the RV taken away. The bank does not want to lose money if it looks like the RV will never be paid for. An unsecured loan, as talked about above, is commonly the only option for those with bad credit. Those who wish to finance their RV with an unsecured loan will not lose the RV as collateral if they fail to pay. The loan will simply increase in the amount with every missed payment, and this will happen rapidly.

Those Who Can’t Should Rent

RV financing isn’t for everyone. Those who don’t think it’s a good idea to take out a loan right now should consider renting an RV instead. Renting allows those with poor credit to use an RV for a vacation, but they have to give it back in the end, so the price of the vehicle is not their responsibility.

It’s Like Getting A Home Mortgage

Getting RV financing isn’t the same as getting a loan for a car. RV loans are actually harder to get approved for. They have similar interest rates to home mortgages. They are like a car note in that the term of the loan doesn’t last very long. Most get RV financing that they need to pay off within 10 to 15 years.

You Can Get A Smaller Loan Instead

Some wish not to burden themselves with a lot of debt. If you’re one of them, or simply can’t get approved for a full loan, you can choose to pay some in cash and some with a loan. This allows you to be on the hook for less money and also increases your approval odds.

Some Use RVs To Retire

You should only buy an RV if you plan to use it all the time. Those who do not think they’ll be using their RV often should consider renting. A lot of seniors wish to retire and explore the country. This can be done in an RV. When using it every day, it makes sense to want to own one. Plus, being responsible for this loan requires as much responsibility as you’d have for a home mortgage. If you’re planning to live in an RV, the responsibility could be a secure replacement for your mortgage.

Owing More Than It’s Worth?

Yes, you will end up owing more than it’s worth. That’s the same with any type of loan. You will pay more than a home is worth if you take out a mortgage. You will pay more than a car is worth if you take out a note. It’s important to note that RV loans companies do have a higher than average interest rate. While you would pay more than any item’s worth by taking a loan out on it, it becomes even more so when you are taking out a loan to purchase an RV.

They’ll Look at More Than Just Your Credit

This is a difficult loan to get. You’ll have to show proof of income, and proof of a steady one at that, and they will compare your income with the amount of debt you already have. you’ll be able to get one if you qualify. Those with a high credit score and income will get a much lower interest rate. Their interest rate could be as low as 4%. Those who are risky borrowers could see as high as 14%.

Is It Worth It?

For those who plan to use their vehicle all the time, it is definitely worth it to take out a loan to purchase one. Go to plenty of lenders as they all offer different options and different rates. You want to get the one that’s well suited to you.