No one ever said that recreational vehicles are cheap. In fact, they can be quite expensive, which may make you feel like you can’t afford to purchase one. However, you don’t need to have all the cash in hand up-front when you buy an RV when you use financing. Around 70% of RV buyers use financing to help fund their purchase so that they can get the camper they want and pay it back at a reasonable monthly rate.
Here are some of the benefits and recommendations when it comes to financing your RV.
Benefits
There are some benefits to using RV financing. For one thing, you don’t have to be independently wealthy to own an RV! Financing allows nearly anyone with a decent credit score and a saved-up down payment to purchase the RV of their dreams. You can set a monthly payment that’s well within your budget so that you can confidently pay off your RV over months or years, rather than having to have all the money for it at once.
Budgeting
Of course, it’s important to make sure that you can afford that monthly rate! Sit down with your finances and create a budget that takes into account not just the sticker cost of the RV itself, but maintenance costs, as well as insurance rates and accessories you may need. Even with financing, you’re going to need to make a down payment for the RV at the time of purchase. This amount is typically 10% to 20% of the total purchase price of the RV itself.
Check Your Credit Score
Another good thing to do before you seek out an RV loan is to make sure that your credit score is as good as it can get. Pay down some credit balances to boost it if need be. Most lenders are in search of borrowers who possess good credit. A “good” credit score is over 700, while a “poor” credit score is under 550.
Loan Types
When seeking a loan, you’ll find that they typically are offered as either “secured” or “unsecured” loans. Secured loans put up collateral in case the borrower defaults, or fails to pay, the loan. Usually, the RV itself is the collateral, which means it can be repossessed if the borrower quits making their monthly payments. Unsecured loans do not require collateral, but their interest rates are higher, and borrowing amounts are lower when compared to secured loans.
If you’d like some assistance with financing your next RV purchase, talk to the finance team here at John’s RV Sales & Service. We’ll be more than happy to help you in any way we can. Ready to shop? Stop by our dealership located in Lexington, SC, to take a look at our wide selection of new and used RVs for sale.
