During the early days of the mortgage business, brokers would require a lot of paperwork…
There is no joy better than owning an RV for the ones who want freedom. The liberty of the open road alone is priceless.
Whether you want to take a road trip for some camping or want to reside in an open park without building or buying a cottage, a recreational vehicle (RV) is the cheaper and easier option you can consider.
However, there is one issue: most recreational vehicles can be pretty expensive and also requires a lot of maintenance throughout the years. So, what should be done if one wants to own an RV?
Keep your worries calm, as there are loans that can help you attain your goals of owning an RV or a mobile home.
RV Loan Options
Generally, there are three loan options that enable you to refinance your RV in Canada. Some of these loan options might not fit your needs; so, make sure you understand all loan options completely before making your decision.
In an auto loan, you have the option of talking to a conventional lender, and then use the loan to finance your new or used RV. However, know that the vehicle title may be used as collateral until you repay all the loans.
It is important to mention here that qualifying for an auto loan can be challenging, especially with poor finances. If you have healthy finances, an auto loan is best for you as you will get a lot of benefits.
One major drawback, however, is that in auto loans the lender can repossess the asset if you cannot make payments as agreed.
In-House Financing From an RV Dealer
If you do not want to contact a conventional lender, an RV lender might be a good option for you. You can find a variety of financing packages through an RV dealership. So, instead of applying with a bank or other conventional lender, you can send installments directly to the dealer until your loan is paid off.
In-house financing may work best for you as almost all dealers are open to negotiation, especially if you have a strong credit score. With this, you can also achieve a lower price, an affordable interest rate, and save you the trouble of qualifying for a normal loan.
Not only this, but you can also score a great deal by expressing a pre-approval offer from another lender.
Both of the above loans do not offer the security of your assets. But a simple unsecured installment loan might be a safer choice since it does not involve any collateral. Add to this the fact that every lender in Canada offers this kind of loan, which appears as a lump sum of cash in your bank account after approval.
However, know that an unsecured loan is a significant amount of money to purchase an RV. Thus, you will again need to present strong financial health in order to receive the best approval odds and loan conditions.
Once you know the three possible loan options, it is time for you to compare all three options and know which one is better for you.
Comparing Your RV Loan Financing Options
Here is how you can compare all three loan options to know which option is best for you.
- The kind of vehicle you want to own
- Do you want a new vehicle or a used one
- Are you comfortable using your vehicle as collateral
- What is the credibility of your lender’s business
- What is the maximum limit of loan you can get
- How much interest rate will be charged
- How many months or years you will have to repay
- What will be your method of handling this debt
- If you become unemployed, how would you pay then
Defining this parameter before applying for a loan will save you time and money. If you still have any doubt in deciding which one to choose, you can reach out to us.
Read More: The Right Time to Refinance Your Mortgage
How to Apply For an RV Loan?
To apply for an RV loan, you must have a full-time source of employment/income. You must also have saved a sizeable down payment and deposit a portion of your income to an emergency account. Along with this, pay all the existing debts or consolidate them to make sure your credit report is error-free. For a smooth process, make sure your credit score is as high as possible.
Moreover, formulate a detailed budget by evaluating your expenses. Then try to cut down all the unnecessary expenses to make your financial situation strong.
But, what is the cost of an RV, and how much you should take capital?
What is the Cost of Owning an RV?
A recreational vehicle (RV) comes in a wide range of makes, models, and prices. You can buy a fold-out trailer that is simply used for sleeping or you can purchase a full-sized mobile home that you can live in for months.
Notwithstanding the vehicle you chose for yourself, it is sure that you will have to pay a bundle of money throughout the years. Remember, this money will not include the installment, interest rate, and loan fees. The cost will also depend on where you apply and what your finance looks like.
However, be sure to consider and budget properly for other necessary expenses before you make any promise for an RV. Below are some of the indicators to help you gauge the price of your next RV.
Down Payment: Put down at least 20% of the total cost of the vehicle. This can be more than $5,000 – 10,000.
Gasoline and Propane: Some RVs only need propane for heating, cooking, and other needs. However, others need diesel gasoline which can cost hundreds or even thousands of dollars yearly.
Utilities: Along with fuel cost, you will also need money for utilities like electricity, water, and plumbing. You can also add cable TV, internet, and satellite radio to it.
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Driver’s License: If RV is closer to the size of a bus, you may need to pay for an extra Class-A license, on top of your normal Class-D license.
Insurance and Registration: Similar to other vehicles, an RV needs to be registered and insured. Since it is bigger than other vehicles, the cost of insurance and registration is higher as well.
Repairs and Maintenance: An RV needs regular maintenance as well as they are driven regularly. So, keep that amount in mind too.
The Bottom Line
It does not matter from where you are in Canada, you can always get a loan for an RV. It can include loans for a mobile home, trailer, or fifth-wheeler. If you have made your mind but do not know where to start or which option to go with, we can help you anyway. Just contact us and we will connect you with the best lenders in your area.