Traveling or living in an RV has gained positive feedback from people who personally experienced it. One reason is that RV travel gives them more freedom and convenience than the traditional one. As a result, more people are also considering hitting the road and spending vacation with their family in an RV.
But since owning an RV can be considerably expensive, most RVers go for financing to make their dream RV possible. Among the different types of RVs, many people find the motorhome most appealing. For one, it can be easier to drive than a truck with a travel trailer. A motorhome is an all-inclusive way to travel with all the comforts of home.
If you’re into outdoor adventures, getting your motorhome might be an exciting idea. But before diving right into it, there’s a lot that you need to consider. Purchasing or financing a motorhome or any RVs is a significant undertaking. But to help you make informed decisions, here’s an essential guide to financing your motorhome purchase.
Choosing the Type of Motorhome
Like all other types of RVs, motorhomes also come in all shapes, sizes, and amenities. Deciding which one is most suitable for you can be quite challenging. It should be noted that the type of motorhome you’re considering may affect the kind of financing you’ll get. Thus, it’s crucial to take the selection deliberately so you’ll make the most of your purchase.
Currently, there are four classes of motorhomes on the market, and you might want to go over them so you can choose which one is right for you.
Class A
Recognised as the top of the line among RVs, the cost of a Class A motorhome starts at around $85,000. Since it offers the largest area you’ll find in an RV, it often sleeps between six to eight people and has almost every amenity your home has. It is often in demand for retirees or adventurous families who prefer to sell their homes in favour of traveling.
Class B
As the smallest motorhome type, Class B motorhomes are also known as van campers, and their price usually starts around $50,000. Although small in size, it’s still equipped with home amenities and can sleep up to four people. If you’re traveling with a larger family or friends, Class B motorhomes may not give you a comfortable space.
Class B+
This motorhome type is similar to Class B motorhomes. However, they are bigger and offer different luxuries. Because of cabin size, this is a better option than Class B if you have a larger family. The price for Class B+ motorhome often starts between $50,000 and $65,000.
Class C
As the middle ground between Class A and Class B motorhomes, this type looks like a larger version of the van camper. But it has more space than Class B motorhomes and can sleep up to eight people. Class C motorhomes come with all the amenities you’ll find in Class A, and its cost typically starts around $65,000.
Overall, motorhomes will often be the most expensive RV option you can get. Besides choosing the one that will suit your travel needs, it’s also essential to consider how much you can afford. Once you sort out your preferences and resources for your dream motorhome, it’s about time to proceed with financing.
Understanding the Motorhome Financing Process
Financing a motorhome is almost the same as financing a car or a house. You get a loan from the lender of your choice, and they become the party that owns your loan. They will lend you the amount of money you’ll need to purchase your motorhome based on the agreed terms and conditions.
Thus, you’ll be signing an agreement with the lender, presenting the loan’s specific details. It typically includes the amount of time you have to repay the loan, the interest rate the lender is charging you, and your monthly payments.
In most cases, RV or motorhome loans are secured loans, which means that you would not need any collateral. The motorhome itself will serve as the collateral, and your lender owns it until you’re able to repay the loan plus the interest. They can take possession of your motorhome in case of a default or inability to pay back the loan.
Keep in mind that motorhome or RV loans are not equal and may not all work well on your needs and resources. Thus, you must get the right financing for your motorhome.
Determining the Right Financing Option for You
Getting financing for an RV or motorhome may not be easy since not all lenders will offer you the amount of money you’ll need for your motorhome purchase. It’s also essential to note that your loan options will likely depend on the size of the motorhome you’re financing. The larger the vehicle, the more costly it can be, and the higher the loan amount you’ll need.
The following are some of the financing options you can consider for your motorhome purchase.
Banks
You can get a competitive rate and term for your motorhome from banks. However, they can also be restrictive with loan amounts and terms if you have poor credit. There is less likely a room for negotiation if you’re getting a loan from a bank. You must have a good credit score if you want to get financing from a bank.
Credit Unions
Compared to many for-profit financial institutions, credit unions are known for offering loans with lower interest rates. Though it’s more flexible than banks, you can still have a hard time securing a motorhome loan if you have bad credit.
Personal Loans
Personal loans can be the right choice if you have bad credit. However, this is more likely an expensive option to purchase a motorhome since they typically have higher interest rates and shorter terms.
There are many other options that you can explore to finance your motorhomes, such as online lenders, dealership financing, and home equity loans. Determining the right motorhome financing option significantly depends on how much you can afford and the type of motorhome you’re financing.
One way or another, you might need to make adjustments on your preferences, needs, and resources to make the most of your motorhome purchase.
Getting the Best Financing Deal
There is no exact formula on how to get the best financing deal for your dream motorhome. But the first step is to get yourself educated about motorhome financing before committing to any lender. It’s also vital to choose a motorhome that is within your budget. You can consider purchasing a second-hand motorhome if you want to improve your financing options.
Also, shopping around and comparing different lenders is beneficial, so you’ll find the rate and term that will work best. It should be noted, though, that the repayment amount isn’t the only thing that matters when you’re considering getting finance for your motorhome. You might need to think of maintenance, insurance, and registration costs as well.
Above all, the best financing deal for your motorhome is the one you’re financially prepared for.
Takeaway
Owning a motorhome or any type of RV is a big financial decision. Thus, it’s very crucial to ensure that your motorhome financing plan fits within your budget. Otherwise, you may find it challenging to manage such financing, causing you financial troubles later on.
Author’s bio:
Lauren Cordell is an accomplished travel content marketer. RV trips and campings have always been her family’s weekend getaway since she’s younger. It’s a no-brainer why her current career is mostly all about travel and leisure.
