I'm so confused about this RV financing thing, it seems one needs to have a credit score over 800 to get financed, it's worse than buying a house! I have a friend who took over payments on a relatives RV. Is this really an option? I've become frustrated with trying to find and RV after getting turned down for a loan. I have a successful business and we own our home out right, we just usually pay cash for everything and so credit hasn't been a concern, but our fund are tyed up and we need to get an RV. Any thoughts on how to get a RV purchased with out credit?
Financing an RV, take over payments?
- Thread starter Namaste
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Gary RV_Wizard
MR
Site Team
RV LIFE Pro
Are you looking to buy new? Financing has become difficult for RVs over 5-6 years old and 10 years is beyond the limit of just about every RV financing group. A hefty down payment seems to be required too.
Whether an RV loan is assumable or not depends on the lender, so you would have to address that question once you find one you like that has existing financing. To assume a loan, you have to buy out the previous owner's equity (if any), so that may mean a down payment as well.
Lack of a credit record is a problem, so you should go about building some credit in case you need it in the future. Apply for a modest line-of-credit card and use it for a few small purchases each month (e.g. gas for the car) and pay it off when due. Build a track record.
The suggestion of a home equity line of credit is a good one too - check with the bank(s) you do business with about that.
Whether an RV loan is assumable or not depends on the lender, so you would have to address that question once you find one you like that has existing financing. To assume a loan, you have to buy out the previous owner's equity (if any), so that may mean a down payment as well.
Lack of a credit record is a problem, so you should go about building some credit in case you need it in the future. Apply for a modest line-of-credit card and use it for a few small purchases each month (e.g. gas for the car) and pay it off when due. Build a track record.
The suggestion of a home equity line of credit is a good one too - check with the bank(s) you do business with about that.
Big Bad Allis
Senior Member
I agree that a home equity line might be an option or get a bank to just secure a proper RV loan against the equity in your house. You have a double whammy. Owning a business and lack of credit history if you're paying cash for everything that comes up. If you have strong business financials and tax statements showing the net income and what you're pulling and owners draw you shouldn't have a problem obtaining credit. What bank do you use for your business? They should want to work with you especially if you agree to auto deduct for your payments.
Jason
Jason
Dan Walters
Senior Member
As Gary said, financing has become more difficult for RV's since 2008 and 2009. I think the financial crisis caused a tight money situation for lenders that affected financing on homes, RV's and other big ticket items. Some of the lenders that financed RV's started only financing newer RV's since they were being more selective.
That being said, I financed mine through my local credit union at a very low interest rate (a little over 3%) in 2011. The motorhome I purchased was 11 years old at the time and I bought it at a price that was below low retail. The credit union financed the purchase 100% including taxes and registration fees and didn't require me to pay a down payment. Granted, I only financed it over a 4 year term, but they would have done it for 7 to 10 years at a slightly higher interest rate. My credit score is over 800 now but was not at the time I financed the RV.
If you are a member of a credit union, try that route. If not, many credit unions are open to new members now and you could possibly join one that is familiar and experienced with RV financing.
Dan
That being said, I financed mine through my local credit union at a very low interest rate (a little over 3%) in 2011. The motorhome I purchased was 11 years old at the time and I bought it at a price that was below low retail. The credit union financed the purchase 100% including taxes and registration fees and didn't require me to pay a down payment. Granted, I only financed it over a 4 year term, but they would have done it for 7 to 10 years at a slightly higher interest rate. My credit score is over 800 now but was not at the time I financed the RV.
If you are a member of a credit union, try that route. If not, many credit unions are open to new members now and you could possibly join one that is familiar and experienced with RV financing.
Dan
lifejester
Advanced Member
- Joined
- Jun 21, 2010
- Posts
- 36
rv financing can be all over the map......and the financial crises of a few years back has lenders runnin for cover.
recently, when attempting to purchase a new (used) rv, I contacted Good Sam about financing.
They said because I did not own a home (sold a few years back) and had no documented experience of paying large sum, long term rv style payments, they could offer to finance an an rv loan. their suggestion was to go get one anywhere else and I could transfer the loan to them at a more reasonable rate after I had paid successfully for a year on the high rate loan.
The fact that I have assets (my IRA) that were worth many times the value of the loan I was seeking didn't seem to matter either.
I contacted my credit union and they said they could loan me money at over 8.00 percent, but maximum term was like 4 years.... this wasn't attractive on the 60k I was looking to finance. the person on the phone said, that the credit union had elected not to be in the rv market (high default/repo rate is my guess)
Then I contacted my bank of over 2 decades, Wells Fargo. in spite of an 840 credit rating, the best the bank offered me was sumptin on the order of 10.5 percent which, in todays market, seemed like highway robbery.
Looked up a couple of on line "we fincance RVs" folks on line and was refused by each in turn..... does not own a house seemed to be the driver in these cases.
At about that time I located a unit I was interested at LaMesa RV, in Tucson, AZ. They hooked me up with Alliant Credit Union (1-800-23902829). They took my loan immediately at 4.49 percent, on a a 6 year old coach, 30k miles.
bottom line..... the interest of lenders is all over heck on rv loans.... working on a used unit thu a large dealer can get u answers that your own bank will not give u and an interest rate closer to reasonable than you may be able to obtain on your own.
alliant credit union is prolly worth a call.... they are actively in the business of long term financing RVs both new and used.
happy shopping
shel
recently, when attempting to purchase a new (used) rv, I contacted Good Sam about financing.
They said because I did not own a home (sold a few years back) and had no documented experience of paying large sum, long term rv style payments, they could offer to finance an an rv loan. their suggestion was to go get one anywhere else and I could transfer the loan to them at a more reasonable rate after I had paid successfully for a year on the high rate loan.
The fact that I have assets (my IRA) that were worth many times the value of the loan I was seeking didn't seem to matter either.
I contacted my credit union and they said they could loan me money at over 8.00 percent, but maximum term was like 4 years.... this wasn't attractive on the 60k I was looking to finance. the person on the phone said, that the credit union had elected not to be in the rv market (high default/repo rate is my guess)
Then I contacted my bank of over 2 decades, Wells Fargo. in spite of an 840 credit rating, the best the bank offered me was sumptin on the order of 10.5 percent which, in todays market, seemed like highway robbery.
Looked up a couple of on line "we fincance RVs" folks on line and was refused by each in turn..... does not own a house seemed to be the driver in these cases.
At about that time I located a unit I was interested at LaMesa RV, in Tucson, AZ. They hooked me up with Alliant Credit Union (1-800-23902829). They took my loan immediately at 4.49 percent, on a a 6 year old coach, 30k miles.
bottom line..... the interest of lenders is all over heck on rv loans.... working on a used unit thu a large dealer can get u answers that your own bank will not give u and an interest rate closer to reasonable than you may be able to obtain on your own.
alliant credit union is prolly worth a call.... they are actively in the business of long term financing RVs both new and used.
happy shopping
shel
lifejester
Advanced Member
- Joined
- Jun 21, 2010
- Posts
- 36
oops...bad number for alliant credit union..... try 1 800 328 1935 ....or www.alliantcreditunion.org...
their statements say they answer the phone 24/7
shel
their statements say they answer the phone 24/7
shel
We feel your pain. We have everything paid off and have paid cash for our last few automobiles. My husband was disappearing, financially. The utilities were in my name, as I had them turned on because he was working. I had credit cards, but he didn't have one. He cancelled his a long time ago when they went up on his interest and never got another one.
When we bought our Montana, we had the cash, but decided to finance part of it, just so he could re-establish his credit. He also got a credit card. Your credit score is based on two different kinds of credit. Revolving - like utilities and credit cards; and Installment - like house, trailer, car payments. You need both.
The really funny thing was - My Credit Score was through the roof and I haven't had a "real" job in years. His money pays all the bills, they just happen to be in my name. Thus, I got the credit for it. Like I was told - It's a CREDIT score, not and INCOME score.
The finance guy at Camping World told us this happens to a lot of people as they get older and financially independent. What a shame to be punished for being financially responsible.
When we bought our Montana, we had the cash, but decided to finance part of it, just so he could re-establish his credit. He also got a credit card. Your credit score is based on two different kinds of credit. Revolving - like utilities and credit cards; and Installment - like house, trailer, car payments. You need both.
The really funny thing was - My Credit Score was through the roof and I haven't had a "real" job in years. His money pays all the bills, they just happen to be in my name. Thus, I got the credit for it. Like I was told - It's a CREDIT score, not and INCOME score.
The finance guy at Camping World told us this happens to a lot of people as they get older and financially independent. What a shame to be punished for being financially responsible.
Frizlefrak
Senior Member
vmyoung61 said:
No doubt.
We're in the same boat. Everything is paid for, we pay cash for everything. We do have a Visa and an American Express, but they both get paid in full every month. We pay all utilities on time. I have no idea what our credit score is, but I'm betting it isn't that great. We would have probably been turned down if we had tried to finance our RV.
Gary RV_Wizard
MR
Site Team
RV LIFE Pro
You ought to "play the credit game" to be prepared for the next time, though. As you have seen, sometimes its a valuable tool.
Nothing wrong with buying a used one. In fact, I highly recommend it. As with houses, there is no particular advantage to buying new and sometimes all you buy is the hassle of getting the bugs worked out. What sort of budget would you have for an immediate purchase, and what size/type of RV are you looking for?
Nothing wrong with buying a used one. In fact, I highly recommend it. As with houses, there is no particular advantage to buying new and sometimes all you buy is the hassle of getting the bugs worked out. What sort of budget would you have for an immediate purchase, and what size/type of RV are you looking for?
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