How to Get RV Financing With Bad Credit

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Securing RV financing with bad credit can be tricky, but it’s not impossible.

A few financial mistakes in your past can make it challenging to loan money. However, taking the proper steps can increase your chances of getting approved.

Today, we’ll help you take steps toward financing your RV purchase if you have bad credit.

Let’s get started!

Is RV Financing Hard with Bad Credit?

Yes, RV financing is typically tough with lousy credit. Getting approved for an RV loan can be challenging, even with excellent credit.

Many lenders consider RV loans luxury purchases, which typically come with much stricter rules for approval.

Any time you’re financing a large purchase, it’s a good idea to prepare. It can take months or even years to get your finances and credit report in a place where a lender will approve you.

You don’t just want to get approved for a loan; you also want a low interest rate. Many banks will increase the loan’s APR to offset the risks they’re assuming.

We’ve heard many people with decent credit getting denied a loan for several reasons. It’s best to clean up your credit as much as possible before applying for an RV loan.

A paper that says bad credit in red with a red circle around it.

What Is the Minimum Credit Score for an RV Loan?

There’s no minimum credit score for an RV loan. However, applicants previously would typically need at least a 600 score to get approved. Unfortunately, due to economic changes, lenders have become stricter on the requirements lately.

Currently, your best shot at getting approved is to have a credit score of at least 680 to 700. While these are slightly below average credit scores, they’re willing to work or entertain loaning to borrowers in this range.

However, these loans may require larger down payments, increased interest rates, or for you to have a pretty and steady healthy income history.

What Is the Debt to Income Ratio for an RV Loan?

Most lenders like to see a debt-to-income ratio under 40 to 45%. This ensures you have rough monthly funds to help repay the borrowed money.

If you have a mortgage, car loan, or consumer or student loan debt, these can quickly increase your debt-to-income ratio.

Financial institutions are often skittish about lending to someone with a high debt-to-income ratio. If your ratio is higher than 40 to 45%, it’s a good idea to do whatever you can to reduce it.

Use the debt snowball method to pay off smaller balances and then apply the excess funds to the next lowest debt. This can be a great way to pay off debt quickly.

A sign that says good credit and points right and a sign that says bad credit and points left.

7 Tips for Getting RV Financing with Bad Credit

Getting RV financing can be frustrating and challenging if you have bad credit. We’ve compiled a list of several things you can do to help get yourself in the best position to get approved.

Understand Your Credit Score

One of the first things you must do is understand your credit score. You can use resources like Credit Karma and other online tools to estimate your current situation. These resources are great because they often provide further tips and advice on improving your score.

For better or worse, your credit score plays a significant role in banks determining whether they’ll finance you.

Late payments, bankruptcies, or accounts getting sent to collections can substantially impact your credit score. Do whatever you can to fix any issues you discover and watch your credit score climb.

Save for a Larger Down Payment

We mentioned earlier that some banks may require you to pay a larger down payment to get approved. Many consumers will put between 10 and 20% down when signing the papers. Lenders often require this because RVs depreciate incredibly quickly.

Whether the bank requires it or not, it’s a good idea to start saving up your money for a down payment. You want to be able to put as much as possible down, so you’re borrowing the least amount as possible.

This can lower your monthly payment and improve your chances of getting approved.

If you don’t have a large down payment, there’s a good chance you’re underwater on the loan the moment you haul or drive it off the lot.

This can be a significant risk to the bank and your finances, especially if you stop repaying the loan. They may be unable to sell it for what you owe on it, which can create a messy situation for everyone.

A person putting a dollar bill in a jar full of money that says "down payment". Save up a bigger down payment when you want to get RV financing with bad credit.

Pro Tip: Is Zero-Down RV Financing Possible? Click to find out.

Demonstrate Stability

One of the most essential things banks and lenders like to see is stability and consistency. When getting RV financing with bad credit, you can still show you’re reliable in other ways.

This includes making on-time payments and extended periods of employment. They won’t like it if you’ve significant gaps between jobs or regularly changing employers.

If you dream of owning an RV, your best bet is to do whatever you can to be consistent. Get a job and stick with it. You don’t want to give them any excuse or reason to worry or deny you.

Put yourself in their shoes. Would you like to loan someone money if there was a good chance they wouldn’t repay you? Probably not.

Consider a Co-Signer

Another option to improve your chances of getting approved is adding a co-signer. This person will financially support the loan should you default on it.

However, because this is a significant responsibility, it’s not something everyone will be willing to do. Doing so could jeopardize their financial situation if you decide to go rogue or disappear. 

A person co-signing a loan for their friend who is getting RV financing with bad credit.

Be Realistic About Loan Terms

The amount you finance, the length of the loan, and your interest rate all work together to form your monthly payment. Look at your budget and know how much you can afford when getting RV financing with bad credit.

However, don’t go into the deal telling the sales team how much you want to pay monthly. If you do, you can guarantee that it won’t be a penny less than that.

Additionally, be aware that there’s a good chance you won’t own the RV for 10 to 15 years. As a result, there will likely come a time when you want to sell it.

Financing for 20 or more years can keep your monthly payment low but will leave you paying very little towards the principal. This could result in you owing more than the rig is worth, making it hard to sell.

Pro Tip: Check out Everything You Need to Know About RV Loans before signing on the dotted line.

Rebuild Your Credit Before Applying

We mentioned Credit Karma earlier because it’s a powerful resource that you can use to rebuild your credit before applying. Using Credit Karma or other resources, you can view your credit report and see what issues lenders may see.

If you have delinquent accounts or errors in your credit history, you’ll want to address them as quickly as possible.

Additionally, lenders will run your credit each time you apply for financing. While there is typically a grace period when making a large purchase, doing this regularly can hugely impact your score.

Lenders will see it as a risk and that there’s a potential you’ll abuse your borrowing power and be unable to repay the loan.

Pro Tip: There’s more to RV loans than we’ve discussed here. Read Important Facts To Know To Secure RV Financing to learn more.

Use Specialized Lenders

Some specialized lenders make it their business to lend to individuals with bad credit.

These are worth considering in some instances, but you should proceed cautiously. Some companies charge massive interest rates, which can start a never-ending cycle.

If you get into one of these deals, you may only pay a few bucks each month towards the amount you owe. This can mean it’ll take you many more years, and you’ll pay much more in the long run than otherwise.

Ensure you read all the fine print and know what you’re getting into. It’s possible to get RV financing with bad credit through a specialized lender; just make sure you’re doing it through a reputable one.

A person handing a pile of cash to someone who is getting RV financing with bad credit.

Overcome Bad Credit Hurdles for RV Financing

The good thing about bad credit is that it doesn’t have to stay that way. If you dream of financing an RV and hitting the road, it’s possible.

However, you’ll have to take the time to clean up your credit history and finances.

Prove to lenders that you’re reliable and that they can trust you to repay however much they lend you for your fancy rig.

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