While your credit score is an important part of securing financing for an RV, it’s not the end all be all.
In fact, some lenders don’t even have a minimum credit score.
Below, you’ll learn how to buy an RV with bad credit, covering your best options to finance a new or used recreational vehicle.
Plus, we’ll answer some frequently asked questions from borrowers just like you to help get you in your dream camper – no matter your credit score!
How to Buy an RV With Bad Credit
Buying an RV with bad credit is possible if you explore all of your financing options, get preapproved, find the lowest-priced RV that meets your needs, and put as much money down as you can.
Let’s look at each of these in more detail.
Getting preapproved for an RV loan is important for two reasons:
- It shows that you are serious about purchasing a recreational vehicle.
- It gives you a little more negotiating power, potentially helping you get a better deal on your RV.
Tip: If your financial situation has improved, but your credit score is still bad, you may use that as leverage to get preapproved and secure a loan. Documenting your credit history can help you prove that your financial situation is on the up and up.
Dealer Financing Solutions
RV dealers typically have access to multiple partner lenders, which increases your chances of securing financing, even with poor credit. But, there are pros and cons to using a dealer financing solution.
- Having your dealer secure financing during the buying process is extremely easy and convenient.
- Because they have multiple lender partners, they can typically find a financing solution no matter your credit score.
- If you do your homework and present the dealer with your bank or credit union’s current loan rate, your dealer can shop around using their lender network to try and beat it.
- Dealers will often get kickbacks for referring one of their lender partners, so they may be inclined to offer you financing from a lender with higher rates.
- “Buy Here, Pay Here” dealers typically have higher than normal rates and additional fees.
Find the Best Deal
It goes without saying, but the cheaper the RV or camper is, the easier it will be to acquire financing, especially if you have bad credit.
Once you find a brand or model you like, shop around to find the best deal. Expand your search to dealers outside your local area and use online marketplaces to compare prices. Even the time of year can influence the price of campers (see When Is the Best Time to Buy a Camper for more information).
When it comes time to talk numbers, don’t be afraid to go low. It’s fairly easy to get a couple hundred, even a couple thousand, off the sticker price just by asking.
Put More Money Down
While you typically need a 20% down payment on an RV loan, putting more money down, if possible, can help in multiple ways:
- Letting your lender know you can put more than 20% down may increase the chances of you qualifying for the loan, even if your credit score is low.
- It may help you secure a better interest rate.
- Your monthly payments will be cheaper!
Improve Your Credit Score
Your FICO credit score will range from 300 to 850. If you’re on the lower end of that (580 or below is typically considered bad), you can build it up by paying your bills on time, paying down other debts, and waiting for those negative marks (missed payments, etc.) to fall off your report.
Tip: Run your credit report from AnnualCreditReport.com and look for any errors, such as missed payments that negatively affect your score that you didn’t really miss.
How to Find the Best RV Lenders
To find the best RV lender, you’ll want to shop around. Banks, credit unions, online lenders, dealer financing, and alternative financing (personal loans, home equity, etc.) are your main options.
Banks offer in-person service (unlike most online lenders), and if you’re an existing customer, your relationship with them might trump a low credit score when it comes to borrowing money for a motorhome. Plus, many banks offer special interest rates to loyal customers.
Bank Of The West, for example, offers RV financing from $10,000 up to $2,000,000. They do, however, prefer credit scores of 680 or higher.
Like banks, credit unions offer a place to deposit your money and take out loans. But, credit unions are not-for-profit, member-owned institutions. This can mean higher savings rates and lower loan rates!
While not all credit unions offer RV loans, many do! Southeast Financial Credit Union, for example, offers new RV loans for as little as 2.00% APR (at the time of this writing).
Online lenders make it easy to secure financing for your RV purchase anytime from your own home. Plus, the multitude of online lenders will open you up to more options – credit score minimums, loan rates, borrowing amounts, etc. – than you’ll typically find locally.
Not to be confused with Southeast Financial Credit Union above, Southeast Financial (SE) is an online lender that specializes in RV loans for those with bad credit. In fact, you can finance a camper with a 550 credit score and an income as low as $20,000 per year. They even offer loans to those with previous bankruptcies!
Alliant Credit Union
Alliant Credit Union is an online lender that offers a variety of RV financing options to those wanting to vacation or even live in their RV full-time (which not every lender will do). While they don’t post a minimum credit score, they do have a wide array of financing options, competitive rates, and same-day funding.
Lightstream is another popular online lender offering RV loans. They have one of the lowest minimum borrowing amounts I’ve seen from a lender, starting at just $5,000! However, you can only borrow up to $100,000, which may not be a big deal to you.
There are no fees or prepayment penalties, and they offer same-day funding.
RV Dealer Financing
As mentioned above, dealer financing is a quick and convenient option to secure financing for your RV purchase. But, some dealers try to pass on severely inflated rates to line their own pockets, so keep a mindful eye on that.
Camping World, for example, offers RV financing for the campers they sell. They have developed relationships with many banks, credit unions, and other financial institutions to help find a loan option that’s right for you.
Here’s a quick RV financing video from Camping World to help answer any questions you might have.
Alternative RV Financing
Other RV financing options include small personal loans and using the equity in your home.
- Personal loans: You might be able to take a small personal loan even if you have a bad credit score, but be prepared to pay high-interest rates – some as high as 35% – depending on the state you live in.
- Home equity: If you’ve built up enough equity in your home, you could use it as collateral to secure an RV loan. Just make sure you don’t default on a payment, as you could potentially lose your house!
What Is the Minimum Credit Score for an RV Loan?
The minimum credit score for an RV loan is typically 680, but some lenders, Southeast Finacial, for example, will go as low as 550. A higher credit score will improve the chances of securing an RV loan and typically result in lower interest rates, as well.
Do RV Loans Require a Down Payment?
Lenders typically require a down payment of 10 to 20 percent of the purchase price to secure an RV loan. A larger down payment may help secure financing if you have bad credit and can result in a lower interest rate and monthly payments.
What Are Typical RV Loan Terms?
RV loan terms are typically between 10 to 15 years, with some going as long as 20 years. And with rates between 2 to 20% on average, depending on the loan length and the amount borrowed.