So, you’re ready to buy an RV, pack up the family and hit the open road! Becoming an RV owner is exciting but the average RV can cost between $10,000 and $300,000. Some can even reach a million dollars. Since RVs can come at the cost of another mortgage, they often involve a looming loan approval process that can leave anyone feeling uneasy.
Whether you have excellent credit or have made some credit mistakes in your past, being prepared for loan approval is essential. Here’s a look at seven ways to increase your chances of seeing a stamp of approval on your next RV loan application.
Check and Improve Your Credit Score
Going into any lending situation blind is a bad idea. Before you begin the loan process, always check your credit score. Knowing where your credit stands lets you shop for the best RV options and put yourself in the best position possible when filling out an application.
What To Look for in Your Credit Score
When reviewing your credit score, look for what lenders scrutinize:
- Your debt-to-income ratio
- Payment history
- Credit diversification
Aside from information in your credit report, lenders also evaluate:
- Income
- Current credit card balances
- Education history
- Employment history
If you realize that you have a rocky credit history and aren’t in the market for a bad credit loan or cosigner, it may be time to step back and work on getting your credit score higher. From regular credit report reviews to paying off debts and contacting creditors, there are several steps you can take to make a credit score appealing to lenders.
Research a Realistic Payment
Once you know you’re ready to take on RV financing, it’s time to establish a realistic payment plan. Repaying a new RV loan shouldn’t break your budget. So, take a step back, look at how much debt you can realistically add to your household per month. For example, if your mortgage plus utilities are around $3,000 a month and your household’s income is $6,000, it’s safe to say that if approved, you could afford a $900 monthly loan payment.
However, guessing what you can afford is far from knowing what you can afford. Utilizing a tool like a loan calculator can help you accurately estimate your monthly payments and their feasibility.
Save Money for a Larger Down Payment
Most RV lenders seek a 10 to 20 percent down payment on the recreational vehicle. However, if you want to boost your approval odds, save up for an even larger down payment to show the lender you are serious about obtaining the loan.
A large down payment not only increases your chances of loan approval but comes with the following benefits:
- Lower monthly payments
- Positive loan-to-value ratio
- Equity in your RV
- Avoiding necessary auto GAP Insurance
Look Into Pre-Qualifications
Getting prequalified for an RV loan is a great way to shop around for loan options without gaining multiple hard checks on your credit score. Pre-Qualifications are a soft inquiry from a lender that allows you to sit back, review potential loans, and make an informed decision before starting an official application.
Consider a Cosigner
Despite decent credit between 650 and 800, loan denial is always a risk. Some of the reasons behind loan denial beyond credit scores are:
- High debt-to-income ratio
- Inconsistent employment history
- Undisclosed debt
- Not enough income to qualify
If you have doubts about your chances at loan approval but want that RV, a cosigner can be an excellent way to secure funds.
Cosigners with excellent credit and financial circumstances put more strength behind an application and can be the element that convinces a lender to say yes.
Anyone from a parent to a sibling or friend can be your partner in your venture so long as they know the responsibilities they take on as a cosigner.
Once someone cosigns on an application, they are responsible for repayment if the person applying for the loan defaults.
So, make sure whoever you fill out the application with will be in your life for the remainder of your loan’s terms.
Work With an RV Loan Specialist
Getting a loan specialist involved with a loan application could be one of the biggest ways to get nearly instant approval.
A web-based financial service provider like Rec Loans 360 can provide numerous financing options at once without the stress of a hard credit check.
We have the experience to connect clients with the right lenders and ensure the application we help process brings RV dreamers one step closer to approval.
Financial specialists can alleviate the stress of doubt and make buying an RV the fun, exciting experience it’s meant to be.
Get Connected to the Right Loan with Rec Loans 360
Rec Loans 360 is a team of financial professionals that helps connect future RV and boat owners with the right lenders.
Your financial situation is personal, so we always put your needs first and ensure you find loan opportunities that match your needs.
Start your RV adventure with Rec Loans 360. Contact us to find your perfect loan match.
