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RV Loans Bad Credit? Find Out How to Help Yourself


Recreational vehicles are a great way to explore the country. This home on wheels lets you go wherever you like, without the expense of hotel rooms or eating in restaurants.

Everything you need for cooking, sleeping and washing up are neatly built right into the RV.

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RV parks are sprinkled throughout the country, making it easy to pull in and hook up your water and power any time you need a break from the road.

These RV parks are usually located near shopping opportunities and all types of entertainment for the whole family. From museums to amusement parks, there is a new adventure to enjoy at every place you decide to park your rig.

The problem is that people with less than perfect credit can have a tough time securing a loan for an RV. Recreational vehicles are quite expensive, and considered a luxury item.

Getting a loan for any type of luxury item is difficult for most people, but can be even more difficult for those with bad credit.

Luckily, there are lenders that specialize in RV loans bad credit.

Before you sign on the dotted line though, here are some important considerations about this kind of loan.

If you can't afford to pay cash for a recreational vehicle, then you'll need to seek financing

Higher Interest Rates

When your credit rating isn't very good, you can expect to pay a higher rate of interest.

Lenders do this to protect themselves. By charging more interest, they get back more of the money they lend out, in case a person defaults on the loan.

Although the higher rate is sometimes not more than few points, even a fraction of a point really adds up on a large loan.

That is why you should try to get as small a loan as possible. You can do this by buying a cheaper RV, putting down a larger down payment, or both.

Some dealers may allow you to trade in a vehicle to use as a down payment. So, if you have any type of vehicle you don't want as much as you want an RV, use it to lower the price of your new or used camper.

This may not lower the interest rate for RV loans bad credit, but it will increase your chances of obtaining a loan and decrease the amount of money you have to borrow.

Both of which will decrease the amount of interest you pay over the life of the loan.

Loan Terms

RV loans bad credit are generally very short. The lender wants the loan paid off as quickly as possible.

However, specialty lenders will often give longer loan terms. The longer term you can negotiate, the smaller your monthly payments will be.

You will be obligated for a longer period, but the payments might be more manageable, which will reduce the risk of defaulting.

RV Loans Bad Credit: Collateral

Lenders like to have collateral. The RV itself is the major collateral, but if you have other items of value you can use, your chances of obtaining a bad credit RV loan are greatly increased.

This type of loan is called a secured loan, because the amount of money you are borrowing is secured by an asset that can be sold in order to pay off the debt, in case of an emergency.

One example of collateral is the equity in your home. There are various ways you can use your home equity when borrowing money.

The simplest is just to use it as collateral. That way you still have the equity, but the lender has the security that you can get the money if worse comes to worse.

Another way is to borrow against your home equity. In this case, the equity is locked into the loan and can not be used for any other purpose.

This doesn't mean you have to sign over your house. It just means that if you need a loan for something else, you will not be able to use the equity as security.

This type of loan is also referred to as a second mortgage.

Learn the cost of an RV loan before you sign

Finding a Lender

There are not as many lenders willing to give RV bad credit loans as there are those willing to finance someone with stellar credit.

But, with a little research, you should be able to obtain the loan you need. Just make sure to do your research before applying for the loan.

Having too many lenders looking into your credit history will lower your credit rating.

For more information about bad credit RV loans, get in touch with our professional loan advisors today.

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