Bad credit can be an obstacle to getting the things you want in life, but not necessarily an insurmountable one. For example, if you have always wanted a recreational vehicle (RV), you know that it is the type of big-ticket item that can be hard to secure financing for if you have bad credit. This guide to bad credit RV loans will give you some tips on improving your chances of getting financing, as well as making sure this is the best long-term decision to you.
Bad Credit RV Loans: Improving Your Chances
Have no illusions about this – having bad credit will make it tougher to get an RV loan. However, there are a variety of steps you can take to improve your chances:
Make progress in your credit history. Identify the reasons your credit is bad, and start addressing those problems. This can entail catching up with overdue bills, paying down credit balances, or correcting errors in your record. Even if these steps don’t immediately restore your credit rating to the low-risk range, being able to show a lender progress will demonstrate a change in the right direction.
Show improved earnings power. Your credit rating is based on the past, but a significant raise in pay could make a meaningful difference in how risky lenders consider you to be. If your household has recently added an income, this might be another way of making lenders more confident in your ability to repay an RV loan.
Demonstrate a reduction in other payments. Income is one thing, but your ability to repay a loan also depends on how many other financial obligations you have. If this burden has recently become easier, for example if you have recently retired an old debt, it should improve the way that lenders view you.
Build up a strong down payment. In general, the higher the down payment, the more forgiving lenders tend to be about credit standing. So, if you want to overcome credit problems, building a down payment of 20 percent or greater should improve your chances.
Know the value of what you are buying. The RV you choose would be the collateral for the loan, so a bad deal for you would also be a bad deal for a lender. Make sure you know the market well enough to spot a good deal, because this will increase your chances of finding a lender who feels the collateral is sufficient for the loan.
Take advantage of the dealer’s financing relationships. If you are buying from a dealer, use the fact that the dealer is motivated to complete a sale. Some dealers offer their own financing, while others have relationships that might get you a more welcome reception from a lender.
Shop around for financing. Even if a dealer can finance a loan or introduce you to a lender, don’t settle for loan terms until you’ve done some shopping around on your own. It’s not just interest rates that vary from one lender to another – their tolerance for weaker credit also varies, so shopping around can help you find a lender willing to offer reasonable terms to someone with less-than-perfect credit.
Making the Right Choice
Getting approved for bad credit RV loans is part of the challenge, but what may be even more important in these situations is making sure the purchase is the right choice for you. Going through the following steps will help you determine whether or not you are fully comfortable with this commitment:
Recognize the cost of bad credit. It’s almost certain that your bad credit rating is going to require you to pay a higher interest rate. Run a couple amortization schedules comparing the total interest costs of the loan terms you’ve been offered with what those terms would be if you had good credit. This will show you what the cost of your bad credit will be over the life of the loan. You can decide whether it might be worthwhile waiting until you can repair your credit before you make this purchase.
Make a budget you can live with. Look at the monthly payment you have taken on, and figure out in detail whether it is something your budget can live with. Remember, this purchase is supposed to bring you joy, not cause you stress. LendingTree’s RV loan calculator can help you estimate loan payment amounts.
Be sure of your commitment to this vehicle. An expensive vehicle like a RV can depreciate in value by a great amount after you buy it, so if you have to re-sell it, you could take quite a loss. The point is, make sure that this is something you are sure you are buying for the long-term. If you’ve never been behind the wheel of an RV before, consider renting one before buying to make sure you know the ins and outs of operating one.
The most important part of pursuing your dreams is making sure you are clear on what those dreams are. If you have thought through the nature of this choice and the financial consequences, the above tips could help you pursue the dream of owning an RV.
Recreational Vehicle Financing Rates and News
If you have been searching for RV loan rates in 2018, you may have noticed the recent wave of RV rate increases. While the hikes of 2017 were only .25% to .37% on average, they have increased by .50%, (from their lowest point), or more so far this year. This makes it different from other upturns we have seen over the last several years, that quickly reverted back to the previous levels. This "sticky" spike leads us to conclude that rates had likely hit rock bottom in December of 2016, or very early in 2017.
All the RV news isn't that bad; after a number of years of declining RV sales, financing and other RV related services, many economic indicators have been heading in the right direction for the industry. Most of the dealers surveyed expected an increase of 12% to 17% in orders of new units from RV manufacturers; reaching for greater sales levels than the last several years of higher than anticipated totals.
In a Hurry? Try Our
Best Rate: 1-Minute Quick-Quote
Lower Interest Rates May Have Bottomed Out
Much of the new business may be coming from buyers who have been "on the fence" in deciding when to purchase. With rates currently on the rise, this trend should continue. The "Fed" will have to start raising rates sometime fairly soon, and the smoke signals we're seeing now could be read like a neon sign later in the year.
The improved economy and growing consumer confidence should continue to stimulate more sales of motorhomes and other types of recreational vehicles. RVs are even becoming "Cool" with the emerging baby boomer market.
The RV financial service providers indicated that interest rates for RV loans had hit bottom late last year, and we were in a rising interest rate economy. Our own research shows that rates had continued to hold at record low rates for most of last year, with some minor, short-lived spikes in recent months. (These increases have been confirmed as of 2017 with a quarter to half-point increases holding after the first couple months of the year.)
Complete Our On-Line Application Now!
We can also finance older used RVs and motorhomes, (from 10 - 12 years old), so you can easily find seven to ten-year-old luxury motorhomes from $60,000 to $80,000, or even less. So if you've been thinking of taking the plunge, come on in - the water (and rates) may be rising soon.
The banks, as well as online RV loan brokers, felt the trend could very easily reverse course if the economy began to sputter - or even if things began to heat up and jump-start a new ripple of competition between RV lenders. (That seems less of a chance now, as there are so few national RV lenders even in the market.)
The head of RVIA, the Recreational Vehicle Industry Association said that he expects shipments of new RVs to continue to increase this year. We agree that this will be another year with increases of 5% to 6% higher than last year. RV manufacturing, much of which is located in Indiana, is an $11 billion dollar industry, now employs close to 300,000 people, with mergers of existing manufacturers and new brands emerging at an increasing rate.
And Now, a Word from the Government
Although current economic conditions have improved, uncertainty in government policies may still dampen spirits if political leaders continue to keep their focus on their own interests above those of the American people. (Or vise versa, depending on your own opinion and current developments. This seems to be a common topic in recent events; and in the opinion of many people surveyed at recent shows, the industry news and media, and RV events across the country.)
At some point the Fed will have to begin to increase interest rates - however, with inflation remaining stable, that may not be enough to derail the recreational industry's current "freight train" momentum. The recent election instability has begun to confirm our theories that we are beginning to enter a rising rate environment.
But Wait - There's Still More
All government and political issues aside, the RV market is being "buoyed" by the ever-increasing demands of retiring, or "soon to retire" baby boomers. The Gen X'ers and Millennials are falling in line right behind them.
With these higher numbers of potential RV buyers entering the market, forward-thinking RV manufacturers are continuing to engineer and produce lighter and more efficient units at virtually all price levels. This is helping keep the younger, entry-level buyers engaged with more economical and easier to purchase RVs at most all levels.
These gains in innovation are also keeping older, or should I say "Seasoned" RV'ers in the game by helping reduce operating costs, making more maneuverable units - and even lightening up the Big Boys. What are ya gonna do, but keep on rolling!
Continued gains in the job market, and higher household incomes and the current record-low interest rates, would seemingly project an extremely favorable outlook for the recreational industry in the foreseeable future.
Regardless of the outcome, the near-term months and approaching years are widely projected to be the best time to purchase and/or finance an RV. If you are in the market but may have been waiting for the rock bottom. That time could very well be now. Stay tuned for updates, or just get it out of the way while the getting is good.
Buying & Financing an RV - The Dealer is Not the Enemy
Statistics show that the 80/20 rule applies to RV sales profits. This means that approximately 80% of all RV's sold will make the dealer an acceptable profit. How much is that? I can tell you it is measured in the thousands... and even tens of thousands of dollars. As you will learn, this applies not only to the sale but also to the RV financing.
How about the other 20%? Most of them will fall into the area of "just under the acceptable range". But, they are still paying the dealer several thousand dollars in profit. Actually, only about 10% - 20% of RV sales made last year were at a profit margin that would be considered totally unacceptable to the dealer. In other words, the customer won... and won BIG!
In a Hurry? Try Our
Best Rate: 1-Minute Quick-Quote
I've always believed that buying, or selling an RV, really doesn't have to be that difficult. It basically depends on how each of the parties involved has been trained, and what they have learned.
My sales people have always been taught to be courteous, helpful, and most of all professional. They return phone calls. They send thank you notes. And, they treat each and every customer with respect.
They Are Also Taught Two Basic Principles:
1. Make a reasonable profit. We have earned it and we deserve it. We have to pay the mortgage, utilities, salaries, RV sales, and financing commissions, etc. So by all means, make us a reasonable profit.
2. Sell RV's. Always try to make a reasonable profit, but if you can't... at least try to make some profit. A little of something is better than a whole lot of nothing.
It's really very easy to save a substantial amount on the purchase of your next RV... If, and only if you know exactly what to do. Here's a look at a typical outing to the local, or not-so-local RV dealership.
The Gun-Fight at the O.K. RV Sales Corral
Most people walk into an RV dealership with the impression that they are going into battle. They bristle with resistance as the salesman introduces himself, and begins the cat and mouse game of "I can sell you... No, you can't."
The salesman is asking qualifying questions, to hopefully keep from walking all over the lot and showing each and every RV. You are simply trying to see the different styles, options, colors, models, etc. It is a tug of war... But it doesn't have to result in all-out war.
Obviously, the dealer, as the individual or business that has shelled out literally millions of dollars to provide a good inventory of recreational vehicles, has the right to regulate the flow of potential customers through his doors. He also has the right to dictate what type of methods his salespeople use.
When people walk through the doors of the dealership, many salesmen, like a cop in a bad movie, will subconsciously read you your RV Miranda Rights.
You have the right to remain ignorant. Anything you say can and will be used against you in the sales office. You have the right to speak to your spouse, and to have your spouse present during any negotiations. If you cannot afford an RV, one will be financed for you at 1% to 3% over "buy rate". (Buy Rate is the Dealer's actual interest rate charged by the lender.)
This is the mentality of many, many RV dealers and salespeople across the country. They will use any means possible to sell you an RV from their inventory, and their lot. They will use a multitude of tricks and strategies to "help" you buy on your first visit. They will give you formidable real and/or "not-so-real" reasons to buy NOW! (You should already know, or have the knowledge to recognize any "Real Reasons" the dealer may legitimately offer. They can be BIG money-savers.)
You, as the consumer also have a set of rights that you should go over mentally as you walk through the doors of any dealership.
The RV Consumer's Bill of Rights
1. You have the right to be knowledgeable. Anything you have learned can be used against any high-pressure tactics of a salesperson or over-aggressive sales or finance manager.
2. You have the right to take your time. Although you do have the right to know how to use urgency to your advantage.
3. You have the right to know the wholesale and retail book value of your trade-in, as well as the RV you are potentially buying.
4. If you finance your RV, you have the right to choose your own source for your RV Loan, at the best interest rate and terms possible.
5. If you choose to purchase an RV Warranty, you have the right to a fair price and a reputable company.
Clearly, the dealer is entitled to some profit... Without it he could never survive. Many dealers make HUGE profits on the RV's they sell. Your job as a consumer is to make sure that he pays the rent on the next buyer... Not you.
You are Your Own Worst Enemy...
Most people never take the time and/or money to learn. They don't realize that when they walk into the dealership and sit down, they have taken a knife to a gun fight. Dealerships spend thousands of dollars training their salespeople to make a good profit on each and every person they work with. Yet still, the vast majority of buyers never take the time to really learn how to buy an RV at a minimal profit for the dealer.
Unfortunately, there is very little good information out there on the subject of RV related SAVINGS! There are plenty of books on how to use your RV, fix your RV, and travel in your RV. There are even some books on the subject of buying an RV. But all of them combined seem to provide very little real-world, down and dirty strategies for saving money.
I have read every book that is available on the subject and find all of them very lacking in good advice. If you are only armed with the advice in these manuals, a good salesman will eat your lunch every time.
Not only must you be able to buy your RV very near the dealer's cost, you must be skilled in evaluating the quality, or lack of it, in the various makes and models you have to choose from.
One important thing to consider is the issue of a trade-in. Should you put forth the effort to sell your own RV before you purchase another one? "Effort", is the key factor. If you put in the effort, you deserve to keep the profits of your labors.
What About My Trade-In?
If you trade in your RV, the dealer will be the one who puts forth the effort to sell your unit. He will be the one to make interest payments on it while it sits on his lot. He will incur the advertising expense, sales commissions, etc. He will also have to fix any defects or problems as well as typically providing a warranty on the unit for a minimum of 30 days.
In other words, don't expect to get full retail for your trade-in. It doesn't happen... Ever. (See our article on evaluating your RV Trade-In Value.)
Some Parting Thoughts...
People ask me time and time again: "When is the best time to buy an RV?" My answer is always the same. "Anytime..." They then typically reply: "No, I mean is Winter the best time? Or maybe at the RV Shows? What about the end of the month, I've heard that is the best time of the month..."
The truth of the matter is this: RV dealers need to sell and finance RVs all year long. Some sales make a lot, some sales make a little. Your job is to make sure you have the skills to play the game effectively.
As long you are armed with the proper tools, and by that I mean information and knowledge, you should be able to negotiate a deal that is fair to both you and dealer. No matter what time of year, remember... Knowledge is power. Use it to your advantage.
Do your homework. Research various models and dealer pricing. Leave your checkbook at home until you are ready to make an offer. Remember the value of the Internet and the ease of shopping it offers.
And always remember... Be kind to your local RV dealer. He is the one most likely to be servicing and repairing your RV. A few dollars more - spent locally... Are wisely spent.
Buying an RV from a Private Seller
Just as the RV Dealer isn't your enemy; the Private RV Seller can be your best friend. They don't have ANY appreciable overhead built into the sale, other than the cost of their advertising, and/or any repairs or refurbishing to be done to the RV.
The private seller, or "RV for Sale by Owner", is usually much more motivated than a dealer. They only have ONE unit on which to concentrate their efforts. Many times their sole intention is to rid themselves of the burden of their no-longer-needed RV.
In a Hurry? Try Our
Best Rate: 1-Minute Quick-Quote
In RARE cases, they are WISELY selling by owner so they can move on to a unit more suited to their present needs and desires. This allows them to sell their RV for a higher price than a dealer would allow them on trade-in, while still offering a bargain to their potential buyers.
Purchasing from a Private Seller can Work to Your Advantage in Many Ways:
1. Lower overhead = Lower selling price.
2. Higher motivation = Lower selling price.
3. No over-pricing to allow for trade-ins.
4. More extensive vehicle history.
5. A more personal transaction.
Because of these benefits, buying an RV from an individual may allow you to save thousands of dollars over buying a similar unit from a dealer.
You MUST, however, do your due diligence prior to the actual purchase. Any faulty systems left unchecked or untested will likely become your own burden unless discovered PRIOR to your purchase. In other words: "Caveat Emptor" - or - "Buyer Beware".
For now, let's take a look at some of the advantages of buying an RV from a private seller.
Low Costs for Private RV Sellers - We Finance Older RVs
Most individual sellers will incur minimal selling costs when selling "by owner". Most of these costs will come from advertising in local newspaper classifieds, Internet advertisements or other forms of marketing.
When compared to the costs incurred by an RV dealer, the individual has a major advantage. First of all, they have no commissions to pay upon the sale. Most RV Salesperson commissions in the RV industry are commonly set at approximately 20% of the gross profit.
In other words, if a salesman sells an RV for an average profit of $5,000 - Then $1,000 of that is going to the salesman as commission. This is not a concern for the private seller, therefore sales commission ALONE can be a potential gain of $1,000 or more to the buyer. (Not to mention the other $4,000 the dealer gained over his wholesale price.)
The above example is based on a moderately priced RV of say, $40,000 to $60,000. You can imagine the profits and commissions on higher priced units!
Also, because of the minimal or nonexistent overhead of the individual seller, profit is commonly NOT a motive for selling. In MOST cases, the sellers simply want to rid themselves of the unit. This usually translates into THOUSANDS of dollars in savings.
Combine those savings with Best Rate's used motorhome and RV financing programs, as well as our best loan rates, and you could double your savings.
While most private RV sellers will try to achieve a RETAIL sales price when the unit is initially offered, they rapidly tire of the stresses of the sales process and lower their "perceived" value of the RV. In other words, when they start the sales process, they have an unrealistic impression of their RV's value. After dealing with prospective buyers for a minimal amount of time, they rapidly become educated on the true value of their RV.
Seriously, think about your own experiences. How many times have you tried to sell something for a premium price, only to accept a lower, yet HONEST offer for much less than your original price? It all goes back to the old saying: "One in the hand is worth two in the bush." In other words, fatigued sellers WILL accept a bargain price if the offer is GENUINE. It ends their suffering... so to speak.
The key is to FIND these fatigued sellers when they are weak. Just as the predator on the African Plains seeks out the weaker and slower prey, you must find the weary seller - and strike when they are at their weakest point. Ruthless - Yes. Unethical - No. It's the law of the urban jungle. Live and prosper by the law, or live and pay a higher price - still by the law. (I can't believe I just wrote that)
The RV Loan Approval Process
Motorhome and RV loans are considered to be "Recreational Financing". This basically means that they are for "Luxury" items. Things you could live without if best, for some unexpected reason or event, came to worst.
Most people have applied for various types of loans in their lifetime. Student loans when you were younger. Auto loans may also be among the first types of loans that you have become familiar with.
Later in life, you may have encountered home loans, or even business financing, equipment, inventory and other types of credit lines. This list is seemingly endless, all with different criteria in qualifying and underwriting guidelines.
RV Loans vs. Other Types of Financing
Most of these types of loans are considered necessary expenses, such as your home and auto loan. If times become tough, or if you have unexpected medical bills or become unemployed, these "necessary" expenses are usually bills you would find a way to pay.
After all, everyone needs a roof over their head, as well as a means of transportation to get to work, the doctor - or even the unemployment office. You also have other fundamental expenses such as utilities and food. All of these things are considered necessary expenses.
Now, you may be considering purchasing an RV, and are possibly finding it much more difficult to qualify for this type of financing. It doesn't seem to make sense, since in many cases, your home, or even your car cost more than the RV or boat you are trying to finance, yet you easily qualified for these loans.
In a Hurry? Try Our
Best Rate: 1-Minute Quick-Quote
Why is it Harder to Buy an RV Than a House?
Once again, lenders have to look at the difference between loans for necessary items and "Recreational Financing". The first being things like home and auto loans. The latter, being recreational items like motorhomes, boats or even other power sport related items such as motorcycles or personal watercraft.
Before the financial crisis and banking system "Bailout", recreational financing was much easier to obtain, just like the sub-prime home loans that led to the financial meltdown in the first place. Loans with zero down payment and "No Doc"Â loans were readily available - even in the field of recreational lending. Those days are long gone. And, if the banks are giving any indications, likely to never return.
Now, RV lenders are much more critical of things like:
1. Credit Score. (Above 700 normally required.)
2. Debt-to-Income Ratio. (Usually no greater than 42% - 45%.)
3. Liquid Assets. (How much money you have in accounts or investments.)
4. Employment & Residence History. (Over 2-years each is preferred.)
Lenders are even looking at a factor called "Payment to Income Ratio". This means that the payment for your new RV cannot exceed roughly 15% of your total monthly income. This is usually not a problem for individuals with higher incomes, but more likely to affect retirees or those on fixed incomes.
So, even though recreational financing is more difficult to obtain, it is not impossible by any means. An RV loan pre-approval can be helpful in determining if you qualify, and what price of RV you can afford - or - at least what the bank says you can afford.
To obtain pre-approval, you will first need to select a particular year, make and model, and establish an approximate selling price. This information is necessary, since part of the approval is based on the "NADA Loan Value" of that particular year, make and model of RV.
Once you have been pre-approved, you can switch to another similar unit and be relatively sure you will qualify, if it is relatively similar to the unit on which you were approved.
If you choose an RV Loan Pre-Approval, just enter the information for your "Subject Unit". We can normally receive a decision from the lender in as little as one day, so you're ready to close your loan as soon as you find the RV that's just right for you.
Internet RV Loans vs. Dealer Financing
You've just signed a purchase agreement with your local (or not-so-local) RV dealer. You know the drill... Your next stop will be the Finance & Insurance Office, (a.k.a. F&I) for your RV loan, financing rates, warranty, insurance, etc.
Your salesman does the "hand-off", and suddenly you are faced with a decision that seems simple, but can cost you many times the profit made on the "front end" of your transaction; the "back end", or Finance and Insurance office.
In a Hurry? Try Our
Best Rate: 1-Minute Quick-Quote
As I always try to convey to my clients: "The dealer is NOT the enemy." In fact, he can be your best friend when your RV is in need of service or repair. He has laid out literally MILLIONS of dollars to allow you the opportunity to browse a good selection of units. He has paid his dues and continues to pay them on a daily basis. Keep his - and your best interests at heart when deciding on your source of any potential RV or motorhome financing.
There is one hard and fast rule that applies to RV Dealer provided financing. He must "pack" (inflate) the "buy rate" (interest rate) on the financing he provides to his customers to earn a profit on the transaction. Once again, he uses this profit to pay overhead, commissions, etc.
1. Should you consider the benefits of financing through your RV dealer? Yes.
2. Are you stuck with the financing and interest rate he quotes? NO.
3. Should you consider alternative sources of financing? Definitely!
4. Should I check Internet RV Loan Rates First? You MUST know the current rates!
Most RV buyers are so frazzled by the time they finish the negotiation to finalize the purchase of a new RV that they fold under the pressure of the F&I office. This can be a costly mistake.
Shopping for your best interest rate and terms can be just as important as shopping for the right RV, and negotiating your best price. In fact, you stand to save literally THOUSANDS of dollars by simply lowering your interest rate by a quarter to a half of a percent.
Information is the Key to Financing RVs Online or Offline
Online RV finance companies normally use many of the same lenders that RV dealers use. It's simply a matter of overhead and the cost of doing business. Since the Internet-based companies generally have lower operating costs, they are able to pass the savings on to you.
Most Internet RV finance sources have online rate quote forms and loan applications which can be completed in a matter of minutes. Normally, credit approval can be obtained the same day you apply.
When you submit your online application, you should also be prepared to send some additional documentation, which is necessary for your approval.
Complete Our RV Loan Pre-Approval Application Now!
Required RV Loan Approval Documents
If you are EMPLOYED (work for someone else), you will normally be required to fax or email proof of income. This is usually a recent pay stub and your last 2 year's W-2 forms. (For each applicant)
If you are SELF-EMPLOYED, you will normally be required to send your last 2 years tax returns and any attached schedules.
If you are RETIRED, you will need to provide documentation of social security benefits, pensions, dividends or other sources of income.
Once your loan is approved, your loan processor will help you in obtaining additional documentation, such as:
A copy of your purchase agreement with the seller.
A copy of the title. (MSO on new units).
Proof of insurance with the lender listed as "Loss Payee".
Copies of all the applicant(s) driver's licenses.
Most onine RV loans take from 4 to 6 business days to complete. Information must be collected, and documents must be sent by overnight mail for your signatures, and then sent overnight mail back to the lender.
When arranging the purchase of an RV, you should typically allow a week or so for your scheduled delivery date. This should allow plenty of time for rate shopping, loan approval, and closing. When your loan closing is completed, funds can be sent to the seller by overnight mail, or simply wire transferred. To save time, you may also choose an RV loan pre-approval so you're ready to close as soon as you find the right RV.
Which Type of Financing is Best?
If you want EASY? Let the dealer handle it.
If you want the BEST RATE? Do a little work.
Sure you will have to do a little more work, but if you break down your long-term savings into the actual time you have spent researching and completing your RV loan... You could be making a VERY short-lived hourly wage roughly equivalent to that of Bill Gates.
For more financing options visit NoCreditCampers.com
RV Shopping and Financing Online
The "ritual" of shopping for a new RV or Boat, and even recreational vehicle financing, has changed dramatically in the last decade - especially within the last 5 to 8 years. Gone are the days of driving hundreds of miles, from dealership to dealership; always at the mercy of time and distance - and the pressure of the sales office.
Granted, the Internet has been in fairly common use since the early 90's, but only in the last few years have we seen the majority of Recreational Vehicle buyers doing most all of their most focused and "actual purchase" related research and shopping without driving a mile. They are doing their homework at home, (and at work), on the Internet.
In the earlier days of the Internet, potential buyers had been slow to embrace major purchases, such as RVs and Boats - especially without seeing and inspecting the unit in person. But, smaller online transactions on websites like Amazon.com, eBay.com and other increasingly popular web-shopping sites, have increased consumer confidence and slowly matured into much larger and more expensive online purchases.
With the introduction of eBay Motors in the early 2000's, people began buying and selling all types of motorized vehicles, but the sale and purchase numbers for RVs grew faster than anyone had anticipated. By 2004, the search term "RV" was in the top 10 search terms on the (relatively new at that time), search engine Google.
In the following years more and more people began using the Internet to search for "Bargains", and the numbers of RV buyers and sellers have increased exponentially, year after year. Our experience has shown that online RV sales and online financing to be increasing even faster than expected.
Complete Our Best Rate On-Line RV Loan Application Now!
Today, the "new generation" of RV and Boat buyers span the entire spectrum of recreational-related demographics. Every age group from young families buying their first camper for occasional outings, to retired full-timers in super-luxury units, are joining the online recreational vehicle purchase revolution.
These buyers tend to do their initial research by driving to the dealerships in their comfortable driving area, usually a 50 to 500-mile radius, or by making periodic stops along their travels and adventures over time. By doing this type of initial shopping, they are able to see, feel and drive the types of units available. They can learn the pros and cons of the various styles, sizes and price levels by seeing these units in person at the dealerships they visit - hopefully leaving their checkbook and credit cards in their vehicle. (Lest they meet a salesman, and buy something.)
Once they have narrowed down their general types or units of interest, they can begin their online price shopping. They can slowly narrow down their search to a particular year, make and model, with specific options. From there on out, they simply call each dealer and/or private RV seller with a unit that matches their needs. Sooner or later, they find the right deal - at the right price. Distance seems to be no problem if they feel they are saving enough money, or finding the right unit.
At WaveWallet, we have seen our percentage of online, and/or out-of-state purchases grow to more than 50% of our RV financing customers. And, because they are normally unfamiliar with long-distance or private-party sales procedures, we provide them with an easy roadmap to a safe and successful transaction.
The new online RV and motorhome "Private Sellers" are wary of their exposure to unscrupulous or fraudulent buyers, so we help guide them through the complete transaction as well. Our RV pre-approval and loan processing, title research, and closing departments coordinate virtually all aspects of the RV purchase, finance and loan closing. A smooth transaction can be crucial to help guide the purchase and sale process from start to finish, with all parties satisfied with the outcome.
So, now you are able to easily find the best price and financing for just about any type of recreational vehicle. The thousands of dollars in savings normally cover more than the cost of driving or flying thousands of miles to take delivery of your new toy or home on wheels, or on water.
While most potential buyers' interest in saving money intensifies during the frenzy of shopping for a new boat or RV, they should remember those industry related businesses they may need after their purchase. Your local Dealer may be much more likely to go out of their way for "post-sale" related activities like service, troubleshooting, etc. if you purchased the unit from them. As you travel further and further from home, the savings in actual dollars become more and more important.
The rapid rise in the use of the Internet for RV shopping has closed more RV dealerships than any other factor, even the extended economic recession. However, the fortunate dealers with deep enough pockets to survive the recession, and those adaptable enough to survive the Internet, have evolved with the changing times.
Now that much of a dealership's income from unit sales has been reduced, they rely more and more on the increased income produced by other areas such as the parts and service departments. They have added new avenues of income such as rental fleets, consignment sales and other products and services.
If you decide to take the Internet leap and save money by researching, shopping and buying online, remember to give your local dealers a chance at earning your business. If not the sale - be it for service, parts or repairs; a little more money spent locally can go a long way in good relations over the long term.
And don't forget to remember that a "Great Deal" can be found just about anywhere if you look hard enough and smart enough. So start close to home, then go from there.
"For every buyer flying from New York to California to save a little money, there is another flying from California to New York to do the same thing."
Basic Factors Involved in RV Loan Approval
Lenders look at several factors when underwriting each RV loan. Every lender is different and stronger areas of your credit profile can help outweigh weaker ones. There are several consistent factors that each lender will pay careful attention to when considering a potential loan.
1. Credit Score - When evaluating the purchasing of a car or even a home, lenders commonly grant an approval based on factors and credit scores lower than those required to purchase an RV. These items, RVs and boats, are considered luxury items. If you were to lose a job, become disabled, or become unable to pay your normal bills, then it is common sense to assume you will stop paying "luxury" items first.
RV lenders normally require a credit score of approximately 700 or better, with no visible credit history of bankruptcies, repossessions, foreclosures, liens, etc. Even late payments as recent as the last several years can be reason for them to decline a loan
2. Debt-to-Income Ratio - Your debt-to-income ratio is the percentage of your monthly revolving debt in relation to your gross monthly income.
Revolving debt is generally considered to be expenses such as monthly mortgage payments, auto payments, credit card debt and other things that may contribute to your monthly debt obligations. Monthly expenses like utilities and other personal items such as cell phone bills are not considered in computing debt-to-income ratios.
Complete Our EASY On-Line Application Now!
Currently, lenders are limiting the maximum debt-to-income ratios at 42% to 45%. As little as an additional percent or two can be cause for a decline. You can figure your own debt to income ratio by dividing your total monthly revolving debt by your gross monthly income.
For example, to figure your own ratio, use a calculator as follows: $4,000 (monthly debt) divided by $10,000 (monthly income) equals 40% (debt-to-income ratio). Your own figures won't be as simple as this example, but be sure to use "monthly debt divided by monthly income" to get the correct percentage.
3. Liquidity - Liquidity is basically your total amount of readily available cash. Things that are considered are checking accounts, savings accounts, securities and investments. Company retirement accounts that are inaccessible or cause serious penalties for withdrawal are normally not regarded as "liquid assets".
In other words, how much money do you have available to pay bills if your income is interrupted, either temporarily or permanently? There is no set amount or ratio that can be computed. Each lender and situation is evaluated on a case-by-case basis. Excellent credit could allow a lender to accept lower liquidity and vise versa.
4. Loan Value - As with nearly every type of loan, the value of the item being purchased is a consideration. An RV's value is normally determined by its "book value" as listed in the N.A.D.A. valuation guide. Some lenders add value for optional equipment while others do not. Each has its own formula for determining the loan value of a particular RV.
You can look up RV values at NADA RV Values website, but be cautious of how many options you check as applicable. Many of these options are considered standard equipment by both the lender and the unit's manufacturer. For example: A refrigerator is always standard equipment, but a larger, side-by-side with an ice maker would be considered optional equipment.
Since the loan value of a particular RV is a major factor considered in the approval of each RV loan preapproval, you will need to provide basic information on one specific unit, no matter if it is for an actual loan approval or a pre-approval.
It's normally advisable to wait until you have narrowed down your choices to a particular type, year and price range. You can then provide a subject RV's information for the pre-approval. As long as you stay close to the subject vehicle's basic information, the lender can simply switch the collateral (RV information) on the same approval.
Pros and Cons of RV Loan Pre-Approval
You should be wary of "shopping" your RV loan pre-approval to multiple brokers since each one will pull your credit report from one or all three credit bureaus several times. Each broker's loan processing department will need to pull your credit for their own records and information as well as any lender(s) the loan is sent to for potential approval.
Complete Our Easy RV Loan Pre-Application Now!
Multiple credit inquiries can lower your credit score by several points per inquiry, although lenders realize that some inquiries are part of any loan approval and consider a few to be normal. Excessive inquiries, 3 to 4 or more in a very short period of time can damage your borrowing ability. Multiple credit inquiries or "Hits" as they are sometimes called, may appear as if you are shopping for loans because you have been turned down elsewhere, even if that isn't the case.
By applying with a single broker or lender you can avoid the problem of multiple financing inquiries on your credit report on the three major credit-reporting agencies. Also, by having your RV loan pre-approved you are able to close on your purchase much faster than if you wait until you find the exact unit you decide to purchase. This is especially helpful when buying on eBay, from other online sources or from a seller who may have other potential buyers who could "beat you to the punch" while you wait for your loan approval.
Just as you shop for the exact RV you may decide to purchase, it is wise to do your homework and check the rates, fees, and terms of various lending sources before you apply for your loan pre-approval. Once you have narrowed your choices down to one or two sources, then you can proceed with your RV loan pre-approval application. Once approved, you will be prepared and ready to purchase the RV that's just right for you.
Learn, Save and Enjoy!
Interested in loan shopping? Visit WaveWallet.co
Get approved for an RV loan with Bad Credit
No Credit Campers RVs specializes in loan approval. We work with a number of lenders including national banks, local credit unions, and some banks that work exclusively with sub-prime RV and Travel Trailer loans. While the decision is ultimately up to the banks, we will try our best to get you approved at the best rates possible, no matter what your credit situation is. Get started here!
One reason No Credit Campers RVs has such good luck with bad credit approvals is because our prices are typically well below the "book value." Banks love this because it is a safe investment.
In order to maximize your chances for approval, please keep the following in mind when looking for your RV:
Look for RVs less than 10 years old
Look for a selling price that is below NADA book value (most of our inventory will fit this)
Towables are easier to get approved than Motorized RVs
The loan amount should be between $5,000 and $40,000 (not an absolute ceiling)
When deciding on a budget, be sure to factor in a higher interest rate (typically between 17 - 20%)
At least 10% down is required for sub-prime loans (your trade can count toward your down payment)
Look for "part-time use" RVs and travel trailers. Banks don't like to loan to full-timers or anyone using their RV as a temporary or permanent residence.
Your credit score must be at least 550 or above
Q: What will my payment be?
A: Payments depend on a number of factors including the loan amount, loan term (how many months), and the interest rate you get approved for. Sub-prime interest rates on RV loans generally range between 17.95% and 20.95%.
Q: Why are rates so high?
A: To answer this question, you must think like a bank. In any loan situation, the rate is always negatively correlated with your credit score. In other words, the higher your credit score, the lower the rate, and vice versa. This is because your credit score tells a bank how risky it is to loan money to you. RV loans also tend to draw slightly higher rates than car loans do, because an RV is "want" and not a "need." The bank assumes that if times get tough, your RV payment will be a lower priority than your house or car payment.
Q: What happens after I fill out the Online Financing Application?
A: The application gets sent directly to our finance manager. Before doing anything, we always contact the customer to find out exactly what he or she would like to accomplish and what steps are needed to get there. From there, the process depends on what the customer's goals are. Nothing will be done without the customer's permission.
Q. Can I get an RV loan with No Money Down?
A: Not likely. Banks typically look for at least 10% down for sub-prime loans.
Q. What is the maximum loan term when financing an RV with bad credit?
A: The maximum loan term can range from 96, up to 144! This limit depends on factors such as how much money you put down, the year and type of RV that you are purchasing, and your credit score.
Q. Can No Credit Campers RVs help me get a loan if I am buying an RV from another person?
A: No. We are not lenders ourselves, and can only help you get approved for loans on RVs and Travel Trailers that we sell. With our extensive inventory, there's a good chance you can find what you are looking for. Please browse our inventory , or contact a salesmen if you need help finding something that suits your needs!
Q: I have heard that pulling my credit report can hurt my credit score... Will my credit score be hurt from filling out the Online Financing Applications?
A: Your credit score WILL NOT be affected by filling out the Online Financing Application. Again, the application goes directly to our finance manager and no further action will take place until we contact you. That means we will not pull your credit report, send the application out to any banks, or share your information without discussing it with you first.
Q: How do I know my information is safe?