How to Finance Used RV
Generally, the best way to finance an RV or motorhome if you can’t pay for it outright is a secured caravan loan.
It’s important to know how a secured caravan loan works before you either waste time looking for finance, or end up locked into the wrong offer. The interest rates, fees, and borrowing amounts may differ from lender to lender and even the vehicle you are planning on purchasing.
A secured loan uses the RV or mobile home you purchase as security
The security arrangement works like any other secured finance product, where, if you default on your payments, the lender has the power to repossess the vehicle to recoup their losses.
Secured loans are generally offered on later model vehicles and you may not qualify for one if you’re buying a vehicle over 15 years of age. In this instance you would normally be offered a typical personal loan.
A standard personal loan may come with more flexibility, however it will often come at a much higher interest rate.
Where to Apply
To find the best RV loans with the fastest approval, you’ll either want to consider working with a specialist vehicle lender - a good place to start is with a Google search.
Alternatively you could work with a vehicle finance broker to organise the loan and compare options on your behalf.
A vehicle loan broker will often charge you a fee for their service and that can be up to $900. For this fee they will take care of a lot of the hassle (including the paperwork) and carefully find you a loan offer that suits from a pool of lenders.
Although you can apply directly at a dealership, this is seldom the best deal. You really should consider leaving the dealership to do some independent shopping around.
What's Next?
Once you have your loan offers, it’s important to compare them by using the comparison rate. This is the true “effective rate” that you will be paying. It includes all the known fees and charges lenders (and a broker if you use one) ask you to pay.
Generally, the longer the loan term, the more interest you will pay. Obviously though, it’s important to find a repayment that meets your household budget.
What you’ll need to apply:
- Generally you will need to be employed and provide your two most recent payslips.
- You may need to provide a rental agreement or a rates notice if you’re a property owner.
- Valid Australian Drivers Licence or Proof of ID