Can You Find RV Financing With Bad Credit?
Can you find RV financing even with bad credit? The simple answer is YES!
But there are many factors that will impact your loan. If you have bad credit and want to purchase an RV, it would be wise to get pre-approved so when you go shopping for your new rig you’ll know what type of RV will fit into your loan budget and how much payment you can afford.
Being pre-approved will also give you more negotiating power since the dealer or seller will know you’re serious and that you can afford whatever you’re thinking about purchasing.
What credit score do you need for an RV loan?
Credit scores range from 300 to 850 and a really low credit score will disqualify you from almost all financing. There are lenders who will finance your purchase even if you have a prior bankruptcy and a credit score as low as 550. I listed a few lenders at the bottom of this article that may provide financing, if all the rest of these listed conditions meet their standards.
- The type and age of the RV you want to finance,
- The down payment and length of the loan period,
- The applicable interest rate,
- What state you live in,
- How you intend to use the RV,
- What your recent credit history is,
- And the stability of your income.
You should be aware that a low credit score will definitely raise your interest rate. Many RV lenders have interest rates as low as 4.29% but a low credit score could raise that rate all the way to 24.99% which will significantly increase your payments and limit your total loan amount. Additionally, the lower your score the more they may require for a down payment. After all, they want you to have some skin in the game and bear some of the risk.
The online app Credit Karma is not an accurate indicator of your credit score. Lenders use several different credit scores depending on their underwriters’ requirements, but Credit Karma is not as detailed and accurate as the lenders need to determine your credit worthiness and their risk. My experience with both a car lender and an RV lender indicates that Credit Karma was many points higher than the FICO score the lenders pulled for my applications.
Know your score before you contact a lender
If you have a Credit Karma score that hovers around 550 to 575 you might be disappointed to learn that your FICO score is too low to obtain RV financing. If your Credit Karma score is in the mid-500s, before contacting any of the lenders you should probably get the free credit reports from the three credit bureaus, so you know where you stand.
If you still don’t know what your FICO score is, you might be able to get that information from your bank or credit union and there are a few places on the internet that say they will provide a free FICO score.
Approach the internet resource with caution. It might be a way to scam you out of all your personal information which would be worse than being denied credit by a reputable lender.
Can you get RV financing if you plan on full-timing?
There is one other thing you must know before contacting an RV lender. Most lenders will not fund an RV that you intend to use as a full-time residence. Even if you have nearly perfect credit, it’s virtually impossible to obtain financing for a rig in which you intend to live.
There are many obvious reasons why lenders won’t finance full-timers. The first concern is if you default on your loan, how can they find you and repossess the rig? The second concern is what kind of work will you be able to do in your RV that will produce the long-term stable income they require to secure the loan.
I get it. I live and work in an RV and I am able to support my lifestyle with my income, but being able to document that to meet a lender’s requirements is very difficult. They have specific thresholds of risk and even with excellent credit, the lender’s risk is considered too great when financing full-time RVers.
If your intention is to take your newly acquired RV on the road for a full-time RV experience, I suggest you buy your RV well in advance of selling your home, because you certainly will not get financing with poor credit and no permanent residence.
Finding RV lenders when you have poor credit
There are several different places to look for RV financing if you have poor credit. You can look at any of the online resources listed below. These folks can determine quickly if you qualify for a loan and for how much of a loan.
They can advise what interest rate you will be paying, and the terms of a loan, but the online lenders offer an impersonal option. They have criteria, and if you fit within their criteria you will obtain financing. If you don’t fit, your loan application will be denied. It’s a rapid, cut and dry process.
On the other hand, if you are a member of a credit union or have a good relationship with your bank, you might try them for a more personal experience. If they know you, and have seen you working your way out of a financial hole, that might factor into their decision making process and help override the bad credit score.
Document your credit history
Whether you use a face-to-face lender like a credit union or an online lender, the more you can do to document that your poor credit history is just that, history, and that your current work/life/debt situation has improved, the more likely you will be to obtain RV financing even with poor credit.
There are many reasons a person’s credit score can go down. You’ve lost your job, had emergency medical problems in your family, suffered through the death of a spouse, or had a child go off course requiring significant unexpected investments in therapy or treatment. Whatever caused the decline in your credit score needs to be behind you before any financial institution will be willing to finance your RV.
Buy from a dealer or private seller
You can buy an RV from a dealer and work with them to obtain financing but that may not be your best choice. Buying a used RV from a private party may be a better deal. You may find a better rig for less, but financing that purchase could be more difficult than purchasing from a dealer.
This organization is my personal favorite RV financing resource because they do more than just secure financing. They will also help you hire an inspector to confirm that the rig you’re interested in purchasing is as it has been described. National Vehicle will also help you with the logistics of moving your purchase from the seller to your location if you happen to be in remote locations.
The staff at National Vehicle works with both the buyer and the seller to help with the transition of ownership, which can be a difficult thing to accomplish when the seller and buyer are both private parties. Most lenders don’t get that involved in the sale, so National Vehicle is a notch above and worth your consideration if you’re looking for RV financing, even if you have poor credit.
RV financing resources
Don’t even bother with Good Sam if you have poor credit since they require a minimum FICO score of 700 points. But you may be able to find RV financing even with poor credit at one of these other online resources.
Learn more about RV loans
To learn more about RV financing, check out our previous article, RV Loans Video Explains How Financing Works.
You may also like this Do It Yourself RV article on 5 Reasons Why You Should Never Finance Your RV.