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Financing a used or new RV
Financing an RV (recreational vehicle) is similar in many ways to financing a car, but it can also be akin to financing a home, particularly for larger, more expensive RVs. Here are some steps to help you secure RV financing:
1. **Check Your Credit Score**: Your credit score will impact your ability to secure financing and the interest rate you receive. The higher your credit score, the lower the interest rate you’ll typically qualify for.
2. **Determine Your Budget**: Understand how much you can afford. Use an RV loan calculator to help you determine what your monthly payments might be at different interest rates and loan terms.
3. **Save for a Down Payment**: Like with auto and home loans, having a down payment can help you secure a better rate. It also reduces the amount you need to finance.
4. **Shop Around for Lenders**: There are a number of places where you can secure financing for an RV, including:
– **Banks and Credit Unions**: Traditional financial institutions often offer RV loans. If you already have a relationship with a bank or credit union, they may be able to offer you a better rate.
– **Online Lenders**: Online financial institutions often have competitive rates and terms, and they can be a convenient option since you can apply from home.
– **RV Dealerships**: Some RV dealerships offer financing. While this can be a convenient option, keep in mind that dealership financing can sometimes be more expensive than other options.
– **RV Loan Companies**: Some lending companies specialize in RV loans, understanding the unique needs and requirements of financing an RV.
5. **Compare Loan Terms and Rates**: RV loans can have terms anywhere from 10 to 20 years, depending on the cost of the RV and your financing. Like with any loan, a longer term will usually mean lower monthly payments, but a higher total cost over the life of the loan. When you’re comparing loans, be sure to look at both the interest rate and the term to understand the total cost.
6. **Pre-Approval**: If possible, get pre-approved for your loan. A pre-approval will give you a better understanding of what you can afford and can make the purchasing process smoother.
7. **Negotiate**: Once you have your financing in place, you’re ready to negotiate the purchase of your RV. Having pre-approved financing can give you more bargaining power.
8. **Finalize Your Financing**: Once you’ve agreed on a price for the RV, you’ll need to finalize your financing. This will typically involve filling out an application with your personal information, including your income and employment information.
Remember to read all the loan terms and conditions carefully before signing the contract. Make sure you understand all the fees, the interest rate, and the terms of the loan.
Lastly, keep in mind that an RV is a big investment. Make sure you also budget for maintenance, repairs, insurance, and other ongoing costs.
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7 Replies
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I have a good friend here in Utah that is a finance manager with a national RV retailer that buys & sells all types of RVs and can check inventory nationwide. Let me know if anyone ever has an itch to get in this game.
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Dustin, I have never seen such huge depreciation like RVs. I was thinking of either renovating my current RVA like adding more slides or trading it in. Can you ask your friend about adding two or three more slides to my current RV with one slide?
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It depends on the size of the RV but it’s possible to add sliders…i did a Google search and there are a few companies that make sliders to retrofit into existing RVs…
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Really? I have a 43 ft Tiffin Zephyr with a Cummings Diesel engine and only 50,000 miles. It has been sitting for 10 years, and want to start using it again. I was thinking of trading it in, but it is crazy how much it depreciated over 10 years. I bought this 2001 motorhome for $200,000, and it’s now worth $60,000 if I am lucky. So, do I renovate the one I got now and add three more slides with the existing one since I will renovate the interior or take my loss and buy a different newer motorhome for $250,000 plus and lose my ass off after several years. Motorhomes are very expensive but depreciate like boats. Waste of money. Plus most lenders do not finance any motorhome older than ten years.
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Can you please share the places where they do RV slides and pics of before and after if you have it?
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Lending Network can now finance motorhomes older than 10 years old. Many finance companies no longer finance motorhomes older than 10 years old because they consider the motorhome as too risky. Look at the blog about motorhome financing. http://www.lendingnetwork.org/motorhomes/
lendingnetwork.org
Many lenders do not finance motorhomes older than ten years. Motorhomes are considered risky loans by lenders and require large down payment.
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Financing a New or Used RV
Financing is a wonderful process, whether one buys a new RV model or a used one. It is quite a fulfilling journey. As RVs have unique characteristics, the financing process can be a cross between car loans and home loans.
Here is a simple four-point guide that can help you get RV financing:
Assess Your Budget
Consider How Much You Can Borrow: Calculate how much money you are willing to put on the table in terms of the total monthly payment and how much you can afford in the broad sense.
How Much is the Down Payment? Determine how much you are ready to put down. The more you put down initially, the lower your monthly payments and total interest will be over the life of the loan.
Research RV Options
Pre-owned vs. new: Start by deciding whether you want a recreational vehicle that is fully loaded with the latest items or one that might be pre-owned. In that case, either option has its own advantages and disadvantages.
Classification of RVs: Learn about available RVs (e.g., motorhomes, travel trailers, fifth wheels) to know your needs.
Explore Financing Options
Dedicated RV Financing lenders: Search for lenders that will provide you with an RV Finance loan. Numerous banks, credit unions, and an abundance of internet lenders will help you buy an RV through financed means.
Loan Terms: Review the existing payment terms of any loans, such as rates, terms, and installments. RV loans can vary widely and depend on the price of the vehicle and one’s credit.
Get the Required Documents
- Sourcing the required documents will go a long way in ensuring that you easily get the needed financing.
- Evidence of earnings (like payslips, tax returns, etc.).
- History of credit as well as credit score.
- Identification (such as a driver’s license or social security number).
- Information regarding the RV includes its VIN, sale price, and optional extras.
Be Pre-Approved
You should get a pre-approval from the lender of your choice first to know which amount you can get. This task can enable you to:
Implement the set budget
Tighten your leverage when it comes to the purchasing end.
Look Out For Your RV
Now that the financing is done, it’s time to search for your RV. You may want to consider looking at car salespeople, attending RV exhibitions, and searching on websites.
Complete the Purchase
There’s only one task remaining to complete the purchasing process:
The loan details thoroughly, including rates, fees, and other miscellaneous.
Fulfill the purchase by signing relevant papers and depositing applicable funds.
Have Fun on Your Next RV Adventure!
Now that you’ve secured financing and have your new RV, you’re all set to travel in it!
An RV is expensive; getting the loan requires adequate research and strategy. However, when a few steps are followed, effective and informed decisions that align with the goals can be made. Never forget that financing is available for any journey, whether a series of weekend getaways or one long trip across the country.