Is your low credit score preventing you from purchasing the recreational vehicle (RV) of your dreams? Here is the good news. Some lenders are ready to offer RV loans for bad credit. They look for whether you make a huge down payment and are financially stable to repay the loan. Here's how you can get approved for bad credit RV loans.
The following methods will help you get an RV loan even with bad credit.
1. Set a reasonable payment plan
One of the major factors that lenders take into consideration is whether you are capable of paying back the loan. Use an RV loan calculator to get a clear picture of your realistic payment and the right budget for you and your family.
2. Save atleast 10% as down payment
If you can make a huge down payment of at least 10%, there are more chances that you will get your RV loan approved. Some lenders even look for a down payment of 20%. Once you make a large down payment, the amount left over for you to pay will be low, and you will have a low loan-to-value ratio. You will benefit from not paying for auto GAP insurance.
3. Choose the RV of your choice
The different RVs available are class A motorhomes, class B motorhomes, class C motorhomes, fifth-wheel RVs, and travel trailers. The price of these RVs varies so that you can choose accordingly.
4. Get preapproved
Choose the right RV loan from the market without relying on one offer. Have a look at the different loan offers and choose the best. Before going shopping, getting preapproved for an RV loan is advisable, which can help you with your RV selection. This can help you negotiate at a dealership. Remember, the interest rates for RV loans are higher than that for auto loans.
5. Complete the paperwork
Once your RV selection is made, look over the paperwork closely. Once you are convinced, sign the documents and enjoy your RV.
If you have bad credit and want to finance your RV purchase, various lenders can help you. Here are some.
Online lenders like My Financing USA and Southeast Financial are ready to offer you RV loans even with bad credit.
| Online lenders | Minimum Credit Score | Maximum loan term | Starting interest rate |
|---|---|---|---|
| My Financing USA | 550 | 15 years | 5.99% |
| Southeast Financial | 550 | 15 years | 8.45% |
You must become a member to take advantage of the credit union's advantageous lending terms and cheap rates. The simplicity of joining a credit union varies depending on where you reside and the membership requirements. In certain cases, you can get a loan from a credit union even without meeting any minimum credit score criteria simply by applying to one.
Credit unions will provide a loan amount covering your motorized RV's total purchase price. The loan amount includes license, title fees, and tax. Regarding non-motorized RVs, they cover 90% of the sale price. The maximum loan term is 84 months.
Banks offer you RV loans with many potential benefits but at higher rates. The higher rates are due to your bad credit score. If you already have a history with a specific bank, your credit score may not matter as much as it would with a new bank. Members of the armed forces, both former and current, and their families can open bank accounts with USAA. USAA provides RV loans for up to 180 months with no declared minimum credit score criteria.
Another option is to get financing from a dealership, but they offer higher interest rates than banks, credit unions, and online lenders. A good way to get a reasonable rate is to shop for a loan at a credit union, bank, or online lender, take that offer to a dealer and ask them for a fair deal.
If you have bad credit, buy-here pay-here car dealerships provide you RV loans. But they offer high interest rates, so before working with these dealerships, you will have to choose from their available inventory.
If you're looking for a cheap used RV, there are various ways to finance it, such as using a credit card or a peer-to-peer loan. However, the interest rates on these choices are usually greater than those of the other available choices.
A personal loan could be an option if you need money for an RV but have low credit. You should pay as much as 36.49% in interest (plus origination fees) if you take out a loan in some states. As a result of loan amount restrictions, you may be limited in the type of recreational vehicle you can purchase.
Your home's equity could be tempting if you have a credit score below 580 since you could use the money to pay for your recreational vehicle through a home equity loan or home equity line of credit (HELOC). If you do this, your home will be collateral for the RV loan. However, you risk having your home repossessed if you cannot keep up with your mortgage payments. This is why getting RV financing with a mortgage is not a good idea.
If you have a credit score of at least 600, you can get a peer-to-peer loan where the loan amount is borrowed from a person rather than banks or credit unions. Interest rates for these types of loans are very high.
Having bad credit won't stop you from getting an RV loan. Online lenders, credit unions, and banks are ready to provide you with a loan. Once you pay back the loan, your credit score gets improves. Later you have the opportunity to refinance your RV at a better rate.
The minimum credit score you require for an RV loan is 550. My Financing USA and Southeast Financial offer you the loan at such low credit scores.
Yes, online lenders like My Financing USA and Southeast Financial are ready to offer you RV loans if you have a credit score of 550.
You can finance your camper even with a bad credit score, but you should be prepared to pay high-interest rates. The rates they offer will be higher than they charge when you have a good credit score.
The minimum credit score you need to get an RV loan is 550. The interest rates will be lower if you have a fairly good credit score.
Even though some lenders are ready to offer you RV loans even if you have bad credit, having a credit score of 700 or higher will help you get the best RV loan rates.
There will be costs associated with getting a loan, and the lender must lay them out for you before you sign any paperwork. After that, it is up to you to review the loan paperwork thoroughly before signing it.
You can receive loan amounts ranging from $5000 to $100000, and there can be variations in the loan amounts based on the down payment you make and your eligibility to pay.
The typical loan period for a recreational vehicle is between 10 and 15 years; however, for loans of $50,000 or more, many banks, credit unions, and other financial organizations will extend the term up to 20 years based on suitable collateral.