Whether you already own a motorhome and are looking to upgrade, or if you have always been drawn to the RV lifestyle and are ready to make the commitment, it’s important to understand the financing options so you can turn your dream into a reality.
Understand Your Finances
The first step you need to take before you can finance the motorhome of your dreams is to understand your financial situation. Review your income and expenses so you can have an accurate picture of your expendable income. This will help you make an informed decision from the available options when you are ready to look at motorhomes.
Many of us finance large purchases like vehicles and homes, and since an RV is a combination of the two it’s okay if you need to be on a payment plan. An individual’s credit score plays a huge role in getting approved for a loan, so take a moment to assess your credit score to see if now is a good time to apply for a loan. If not, then there are steps that you can take to improve your credit score which can set you up for success when you’re ready to purchase a new or used RV.
Once you have a thorough understanding of your finances, you can come up with a realistic budget for a big purchase like an RV. Pick a monthly payment range that you’re comfortable with; keep in mind that there are long term costs separate from the cost of the vehicle itself that you’ll need to account for, like insurance, fuel, and maintenance.
Depending on your monthly budget, you might discover that either a new RV or a used RV is right for you. There are plenty of reasons to purchase a used RV, and many used motorhomes are just as luxurious and well-maintained as new ones. Don’t immediately rule out a pre-owned motorhome; you might discover that the RV of your dreams once belonged to someone else!
No matter what type of RV you decide to purchase, you’ll need to put down a large payment for it. The earlier that you can begin saving for a down payment, the better. When you sit down to look over your finances and come up with a budget, don’t forget to factor in the down payment.
What Kind of Financing Options Are Available?
After you’ve taken the time to understand your finances, you’re ready to learn more about the various financing options that are available to you when you purchase an RV.
There are two main types of RV loans:
- Secured RV Loans. When you have a secured RV loan, then the RV itself is used as collateral for the loan. This can be advantageous because secured loans often have lower rates, and lenders can be more willing to approve your application even if you have a low credit score. The downside is that the RV itself is at risk if anything happens, so if you are unable to meet the payments then the lender can repossess the vehicle.
- Unsecured RV Loans. Unsecured RV loans don’t have any collateral associated with them; instead, the lender will assess your credit score, income, and debts to decide if you’re a good fit for the loan. While there would still be consequences if you miss a payment, you don’t have to worry about losing the RV.
Many unsecured loans allow you to pre-qualify with the lender with no impact on your credit score, which allows you to compare various payment options and interest rates. If you do get pre-approved, the RV buying process will also be a lot smoother and faster.
The RV Buying Process
After analyzing your finances, saving for a down payment, and deciding on a loan type, you’re ready to start shopping for your dream RV! At Motor Home Finders, we are the leading broker of quality pre-owned motor homes. We have built a comprehensive national network of independent buyers and sellers, which means we have a wide variety of luxurious RVs available for you to browse.
We specialize in Class A, B, C Diesel and Gas Motor Homes, and our agents are committed to providing each and every person with the very best professional service. Our well-stocked and ever-changing inventory of motorized RVs offers plenty of options to choose from. So what are you waiting for? It’s time to turn your dream of RV ownership into a reality!
