Four keys to Financing
Four Keys to RV Financing
Are you in the market for a new RV? Obtaining a loan is easier now than it has been for several years. RV interest
rates are at an all-time low. If you understand the four key areas that banks look at, we can help you get on the road and find the RV of your dreams.
LENDER GUIDELINES The lending industry has better financing options than a few years ago, but it’s important to
understand that recreational financing is still different than financing a car. As consumers, we often compare the
experience of obtaining a recreational vehicle loan to a car loan, but the actual loan process for financing a RV
typically takes longer than a car loan because the lenders’ credit guidelines are different for a RV versus a car.
Lenders are less likely to approve full-time RVers so make sure you make arrangements before taking that leap.
In order to receive a recreational loan, lenders look at the following information in order to approve a loan request.
Debt–to-income ratio: This ratio is calculated by taking the total of your monthly payments (or debts) and
dividing it into your monthly income. Keep this in mind if you are retiring soon, your income may change.
Monthly Debt $______ / Monthly income $______= Debt Ratio $______
Do you have comparable credit? For example, if you’re looking to finance $45,000 lenders typically want you
to have a prior loan close to $45,000 open for at least two years with good payment history. ___Yes ___ No
Credit scores are also very important to recreational lenders. There are many banks with different options and
some specialize in helping customers with lower scores, even as low as the 500’s, but will typically require a
higher interest rate. RV Sales works with a variety of banks, credit unions and other lenders available for all
credit scores. We will do our best to help you find an appropriate lender for your financial history.
My credit score______
INTEREST RATE: Keep in mind that rates vary based on the age of RV, how much you are financing, and your credit
history. When researching rates, make sure you also keep term and monthly payment in mind as well as any lender
fees. Due diligence on your part will greatly help in getting the loan that works best for your particular situation.
I would feel comfortable paying $_____/ month for my RV loan.
DOWN PAYMENT: You will probably be required to provide a down payment. There are lenders who will approve $0
down with a great credit profile (depending on how much you finance) but typically 10% -20% down is required for a
recreational loan. As a consumer, you may benefit by putting money down. It can lower your interest rate, improves
your chances of qualifying for a loan and helps build equity quicker – which is important when it’s time to trade in your unit. Customers who don’t put a down payment and pay the minimum payment each month often become
“upsidedown” in their RV, meaning they owe more than it is worth and can limit your ability to trade your RV in when you are ready to upgrade.
I can afford to put $______ down payment for my RV.
APPLICATION INFORMATION: As consumers you have no control over lender guidelines, interest rates or down
payment requirements, but you can help by making sure all the paperwork is complete, accurate and legible to prevent delays and errors. Be prepared to provide personal information and co-applicant information (if applicable). It’s standard to be asked to provide your home address, phone number, citizenship, rent and/or mortgage payment, date of birth and social security number. Lenders might ask you to provide proof of income including a paycheck and up to two years of current 1040 federal income tax returns complete with all corresponding schedules, including W-2’s. If you’re aware of any derogatory marks on your credit report you will want to provide explanations or documentation explaining your unique situation.
Even people with credit challenges can qualify for financing as RV buyers are considered to be one of the lowest
financial risks to lenders. Now that there are attractive financing plans available – the best we’ve seen in years and you’re knowledgeable on the four keys of RV financing it’s time to go shopping with RV Sales of New Mexico
because the road is calling!