RV Financing Requirements

You can finance an RV.

Recreational Vehicle (RV) financing procedures often follow the same guidelines and requirements as traditional automobile financing. Your RV finance application will have to follow proper loan-to-value ratios and your debt-to-income ratio must prove satisfactory. Because of the wide price range of RVs, you might find that requirements differ by bank, cost and credit score. Whether you finance at an RV dealer, credit union or other lender, basic lending requirements remain consistent throughout the lending industry.

Credit Score

Your credit score is used to determine RV finance approval. The more expensive your RV is, the higher you can expect the required necessary credit score range. It is difficult to obtain an RV loan without credit history or an overall negative report. Ideal candidates will fall into the good to excellent credit range to obtain an approval, while more expensive RV lenders may require an excellent credit score–this is at discretion of the lender. Make sure your credit report is accurate before applying because your credit rating also determines your interest rate. Most lenders require credit history and a good score.

Stability

Besides your credit score, all lenders want proof of stability. Sufficient income is a requirement of RV lenders. You must state your income amount and where it comes from. Lenders also use time on the job for loan consideration. Most lenders will ask to see at least a two-year employment history. If you have been at your job for less than two-years, you can expect to provide previous employment information.

The time you've been at your address is also used in combination with credit score to determine approval. You can also expect to provide the lender with previous address history if you have not resided at your current address for long.

Values and Ratios

Proper loan-to-value ratios are strongly considered. Your RV must fall into appropriate lending ranges. For example, you cannot borrow $50,000 for an RV that is only worth $25,000–-this value is determined by the lender. If your RV is not in the proper range, you can expect to put money down toward the loan or your loan will be denied.

Your debt-to-income ratio, or the amount of debts you pay each month versus the money you have coming in, is required to fall into a certain range as determined by a lender. For example, you cannot have several car loans, credit cards at their limits and a high mortgage that equals $3,000 a month when you only make $3,500 per month. Expect to be required to provide proof of employment and all sources of income.

Paperwork and Insurance

You are required to provide full-coverage insurance on your RV for the entire length of your loan, as stated in your contract. To complete your loan, you must provide the bank with any required paperwork that it needs. These requirements can differ by lender or personal situation. You may have to provide proof of income or residency (usually by a utility or pay-stub statement) or prior tax year information. You are required to sign all of your contract paperwork to complete the RV loan.

References

• Bankrate: How to Finance a Recreational Vehicle