Looking to purchase a new RV, but worried about how you’ll pay for it? Why not get a loan? RV loans are very commonly used by buyers to make the purchase process easier on a budget. In fact, over 70% of RVers use financing to purchase their campers.
Day Bros. RV Sales, serving Kentucky and Georgia, is your local RV dealer, with locations in London, KY, and Lake Park, GA. Below, you’ll find our helpful tips on how to obtain an RV loan to finance your RV purchase.
1. Make a Budget
Before you do anything else, sit down with your finances and a calculator to make a budget. Determine how much you can afford to pay on a loan each month and how much you can afford to put towards the total purchase price. Don’t forget that you’re going to be paying for insurance, maintenance and potentially storage costs while you’re paying off the loan, so factor these into your budget as well to come up with a number that’s comfortable for you.
2. Save Up Your Down Payment
You can’t finance the entire cost of your RV, unfortunately. Lenders generally require that you pay anywhere from 10% to 20% of the total purchase cost as a down payment up-front, so that’s something you have to save up for. Try to start putting away cash for the down payment as soon as you know you want to buy an RV so that you’re ready for this cost.
3. Raise Your Credit Score
A good credit score can do wonders for your loan success. FICO credit scores fall between the range of 300 to 850, with 300 being “very poor” and 850 being “excellent.” Lenders are always after a borrower with good credit, which is generally a score over 700. If your score is under 550, this is considered to be pretty bad and most lenders will not want to lend to you. Pay off outstanding balances to raise your score before you look into an RV loan.
4. Know Your Loan Types
There are two primary types of loans which you can apply for — secured and unsecured — and which one you get will depend on many factors, including that credit score we just mentioned.
A secured loan uses the RV itself as collateral (the “security”) to ensure that the loan is repaid in full and on time. Failure to pay or many late payments will result in your RV being repossessed. Secured loans usually offer lower interest rates and let you borrow more money up-front, but you have to be able to make every payment in full and on time (which you should do anyway).
An unsecured loan requires no collateral, so you don’t have to worry about your RV being repossessed. However, unsecured loans can have higher interest rates, lower borrowing costs and shorter loan repayment periods.
Day Bros. RV Sales offers financing options to assist you with your RV purchase. Talk to one of our helpful sales team members to learn more about our loan options when you’ve found the RV of your dreams.
Ready to check out some RVs for sale? Visit one of our locations in Georgia or Kentucky today to tour our inventory of new and used RVs for sale in many styles. Day Bros. RV Sales proudly serves both Lexington and Louisville, KY, as well as those of you in Valdosta, GA.