Buying an RV is quite like buying a home. After the decision is made, you have to consider the type of RV you want, how much it would cost, how to finance it, and eventually, how to pay off whatever loan you get to finance it.
Of all the factors listed, the option of financing your RV purchase is the most critical.
Why you Should get an RV Loan
A recreational vehicle is an important purchase as it allows you to take a breather from the hustle and bustle of everyday life. However, you cannot enjoy the comfort that comes with driving across the country if you’re in debt.
An RV loan is the best way to finance your purchase. As more and more lenders arrive on the scene, it has become even more easy to get an RV loan in recent times. The competitive prices available also allow you to carefully weigh your choices before coming to a decision.
4 helpful tips for getting an RV loan
1. Have a budget
RVs go for as low as $5,000 to as high as $500,000. Before beginning your search for a lender, you need to know the sort of RV you want and how much you are willing to spend to get it.
A budget is important for deciding the amount for a down payment, but it also helps you mentally prepare for the monthly payments you’ll be making.
Of course, the monthly payments would be accompanied by other costs such as gas, utility, insurance, and maintenance. Essentially, know your limits and be sure to decide on a sum you can comfortably afford.
2. Consider your credit score
If you aim to qualify for an RV loan with low interest rates, then you need to have a high credit score.
However, if you have a less than favorable credit history, all is not lost. You could still qualify for a loan but bear in mind that it could come with fewer perks than a high credit score would offer. Fortunately, a larger down payment can help even the playing field.
3. Save up for a larger down payment
You may set a budget and realize that you need more money than you have at hand. Then it would be best to put your plans for an RV on hold and focus on increasing your savings.
Dealerships may require anything from 10 to 20% of the purchase price as a down payment and a large down payment is always a good idea. Not only does it help you reduce your monthly payments, but it could also help you get a loan with a lower interest rate.
4. Get insured
Earlier, we advised that you consider the cost of insurance when making a budget. This is because to qualify for an RV loan, you need to show proof of insurance and the requirements often differ from one lender to another.
Thus, it is advisable to plan to ensure you have enough coverage to meet your lender’s requirements.
An RV is an important investment and requires proper planning. Once you have your house in order, you can go ahead to compare loan packages before settling on one that suits your unique needs.