Financing a camper is more than just hitting the highway and embarking on a camping tour. It’s understanding the whole financing process and planning for expenses that will accrue over time.
Before you buy an RV, you must do a lot of research as this will help you avoid making certain mistakes that may be difficult to rectify. Thankfully, this article covers four things you should know before financing an RV.
- There are different types of RVs
Campers come in different shapes and sizes, each one designed to suit a particular purpose, and each one with its pros and cons.
When deciding which type of vehicle to buy, you should consider several factors, like how many people will occupy the RV and what kind of trips you’ll be taking.
If you plan on going on long road trips with more than two people, then a motorhome may the best option for you. Motorhomes are very expensive, but they make up for this by having many luxury amenities and appliances.
Trailers are another RV option worth considering, though they’re smaller in size and need to be towed by a separate vehicle.
Trailers are a great option for you if you’re on a tight budget. But if you don’t own a towing vehicle, financing a motorhome may be the wiser decision.
- The camper may be used as collateral
In camper financing with My Financing USA, there are two types of RV loans: secured loans and unsecured loans. A secured loan is one in which the RV is secured as collateral and used to guarantee the loan. On the other hand, in an unsecured loan, nothing is used as collateral.
Most creditors, especially banks and online lenders, offer a secured type of loan to consumers. This way, they can easily reclaim your RV if ever you default on your monthly payments.
- Your credit score matters a lot
Lenders usually ask to see their customers’ credit reports before deciding whether or not they qualify for a loan. If your credit score is poor, securing a loan can be quite a challenge.
And even if you manage to secure the loan, chances are that it would attract high-interest rates. That’s why having a high credit score is crucial to camper financing.
With a strong credit score, it’s easier to qualify for a loan, even if the loan is unsecured. Before you apply for an RV loan, ensure that your credit score falls somewhere between 650 and 850 as this would increase your chances of getting approved.
- A new RV isn’t always the best option
Financing a brand-new camper has its perks: for starters, you get to have a vehicle that has no tear or wear. And what’s more, new RVs usually come with a full manufacturer’s warranty that covers the vehicles for one or more years.
These benefits, however, must be balanced against the fact that new RVs are very expensive. Buying a used camper is another option you should consider if you’re running low on income.
Although most people avoid this option because they believe new RVs present more problems than used ones. But this isn’t always true.
Sometimes, it pays more to buy a used RV — not just because it’ll help you save a lot of money, but also because used ones often come with certain installations you would have to buy later if you were financing a brand new RV.
Financing a camper is a huge decision and one that shouldn’t be taken lightly. Therefore, garner as much information as you need, and don’t hesitate to ask questions whenever you’re not clear on any part of the process.
Hopefully, these tips will help you get the brand that best suits your needs and your budget.