Recreational Vehicles (RV) are becoming a rage once again in the North American market. If you own one as well, then you are among more than nine million households that possess RVs, according to the data of Recreational Vehicles Industry Association. Like most other things, there are a wide variety of RVs available in the market from those modestly priced around $20,000 to the luxurious ones costing $500,000.
Therefore, it is clear that this is not a cheap item. So, how do you get one if you are not rich enough to cough up such money easily? Well, you’ll have to go for loans and financing. You will have various options and will have to choose the one that suits you carefully. But first, let’s inform you about the different ways of financing an RV available in the market.
Using the Dealer
The most common, and often most convenient, an option is to finance your RV sale through the dealer itself. The reason for it being preferred is that you can buy the vehicle as well as get the loan from the same place, saving you time and money.
The only danger is that you may be missing out on better deals from other places. But if you are aware of the rates available at different locations and are confident that you are getting a good deal then, go for it. In many cases, it’s the type of vehicle and your credit score that determine what kind of interest rate you would be paying. Sometimes, it could be lower than even 5%.
Using the dealer for financing is often beneficial when you are shopping for special offers. At that time, you may end up getting much lower interest rates and much better terms.
Financing Through a Bank Buyers of RVs could get a great deal from banks as well. If you possess a good credit score, there is a possibility of getting loans at even sub-4% rates. In fact, even the repayment term can be extended to much longer than what you usually expect while taking a loan.
One major incentive for financing through a bank is the removal of the middle-man from the process. This won’t be the case if you are financing the loan through the dealer. The banks would also present you with the best possible deal first up without requiring any negotiations so that you can make the decision quicker.
But when you are financing your RV purchase through a bank, you won’t get a car loan since an RV doesn’t fall in that category. Hence you can avail of the following types of loan:
• Recreational Loans
• Dealership Loans
• Specialty Loans
• Personal Loans
All these loans will come with different terms and conditions. But one thing common about them is the fact that all of them would have more strict lending criteria than your average car loan. But this is a minor discomfort that you will have to bear if you desire the comfort and the facilities of an RV.
The personal loans are very useful in this regard because they are available for people whose credit score may be too low to qualify them for the other types of loans. Having said that, personal loans can also be limited by various factors, and you may not be able to get as big a loan as with the other varieties. The problem could get compounded by less favorable terms like a shorter duration for repayment.
But none of those issues with private loans are as big as the interest rate. Those not blessed with a good credit score may have to pay interest rates that are much higher than expected and in some cases, may be exorbitant. Interest rates as high as 35.99% have also been recorded.
Best Tips for Financing Your RV
When deciding how to finance your RV, do remember these tips as they may help you big time in securing a great deal:
¬ Get your credit rating
This advice applies not just to those seeking a loan for an RV but also for any other purpose. By getting a credit rating as well as pre-approval, you would be able to get a clear understanding of how many loans you can get and afford in your present financial conditions.
¬ Don’t rush with getting a loan
If possible, take your time while choosing the right institution to take a loan from. If you are in a hurry, you may be pushed by your dealer to take a loan from him whose conditions are worse than what many others are offering. Check out all the options you have from various banks and then make your decision. Do check out special offers that certain banks may be offering.
¬ Check the record of your dealer
Those opting for a loan from the RV dealer itself, should try and find out from their previous customers as to whether they have had a good experience and have found the terms to be good. Don’t get pressurized by the dealers into sealing a deal.
¬ Don’t skimp on the bargaining
When you are taking a loan from a dealer, don’t shy away from bargaining. If you show them that you possess no other options, they may not be willing to relent whereas if you show the inclination to move away, you may get better offers. Also, remember that many dealers keep the price inflated at the beginning and are willing to back down if you persist.
So, the options are aplenty in the market if you want to buy an RV and seek to get a loan for it. But do remember that you may have to put in some effort and do some shopping around to get the best deal. Otherwise, you may end up paying way more than what is required.
If, however, your financial condition is good and you have a good credit rating, then it’s going to be a smooth process towards getting your own RV and setting out on your journey.