You can buy a recreational vehicle without putting up the RV as collateral. This is via an unsecured loan which can be a specialized loan product, a personal loan, or one sourced from friends and family.
Together we shall explore the world of unsecured loans and how they could lead you to your future camper or trailer. Get financing for your RV.»
Unsecured Loans for Recreational Vehicles
There are two things that make unsecured loans appealing to prospective RV owners: (1) the lack of collateral and (2) the lack of down payment.
When you finance a motorhome in the normal course of things, you are required to put it up as a collateral. This serves as an assurance that not only will the amount borrowed be recovered by the lender but that you are willing to do everything to pay back your obligation.
It’s not just potential homeowners who have to put 20% of the home’s purchase price. Future travel trailer owners are also required to put 20% down on their RVs although there are lenders who’d accept less of that. Nevertheless, putting thousands of dollars in down payment is never an easy feat.
Qualifying for an Unsecured Loan
Interestingly, a loan without a collateral represents more risk for the lender. To mitigate the risk of lending without collateral, the lender will evaluate your creditworthiness, a gauge of your eligibility for an unsecured loan. Whether you will ace this test will depend on your character, capacity, collateral, conditions, and capital. Check with a lender here.
Another way that lenders protect themselves from risk is manifested in higher interest rates on unsecured loans than on their secured counterparts. Do note that the rate you’ll ultimately get and other loan terms will be based on your qualifications.
Examples of an Unsecured Loan
A noted albeit popular example of unsecured loans is a personal loan. Its use is far-ranging, from vacations to vehicles. You can use a personal loan to fund a portion or all of your camper’s purchase price. If your credit record is stellar, there is a higher chance of getting approved for a personal loan.
RV lenders also offer specialized unsecured RV loans. They may not have down payments, have shorter repayment lengths, and limited to purchase transactions only.
Lastly, our parents or friends usually lend money to us without conditions or collateral for that matter. These unsecured loans are pretty handy to buy your first RV.
