A recreational vehicle (aka an RV) is a home away from home for many families who take to the highways and byways for extended road trip journeys and cross-country vacations. But RVs can be a pricey expense each month, especially for owners who are still paying down the initial loan and/or a RV title loan.
While the initial price of a RV varies, as some models are luxe while others are a bit more basic, RVs might be considered more of a luxury item than a necessity. These vehicles are typically secondary modes of transportation, unless, of course, your RV also doubles as your home.
Those who purchase RVs, though, might find their monthly budget stretched as they try to make those sometimes pricey monthly payments. And if an owner also has used the RV to secure an RV title loan, the RV payments may be even higher.
So what do you do if you’re struggling to make those monthly RV payments? Before purchasing any automobile—including a RV—buyers should consider their:
- Monthly income
- Monthly expenses
- Interest rates that will affect the minimum payment
- Initial down payment (obviously, more money down typically means a lower loan value)
- Loan term (the length of the loan)
All of these factors figure into the big picture of RV ownership. Your budget determines how much you can (and should) spend on the purchase, and this is based on your monthly income and expenses.
You can’t and shouldn’t spend more than you can afford to pay each month. If you know that your budget only allows you to allocate $200 per month on payments, use this as your bottom line.
But interest rates also affect those monthly payments. If you have a low credit score, you may still qualify for a loan. However, the interest rate may be higher as a reflection of your credit risk. Interest rates can significantly boost monthly payment minimums.
The loan term also is important, because this is how long you will be responsible for the debt (in theory…you may pay it off sooner). Opting for a longer loan term may help lower your payments, but you will be committed to that loan for a longer period.
Bad Credit Camper Loans Tip #1: Try to Refinance the Original Loan
Those with a low credit score may find that their loan terms come with very high interest rates.
This may mean that monthly payments are seriously digging into their finances and keeping current with those payments might be challenging.
So what do you do if your low credit score has left you with a loan with high interest rates and a high monthly payment? Refinancing the loan may be an option to help lower those payments if you think your credit score has improved.
Bad Credit Camper Loans Tip #2: Increase Your Income
If you’re having trouble paying the loan, you may also look into taking on a second job. Or look at your budget to see if you can cut other monthly expenses somehow.
There could be monthly spending habits that you have that you don’t realize may be hurting the budget. Ask yourself:
- Do I eat out often?
- Do I splurge on wants?
- Am I shopping for deals?
- Could I clip coupons to save more at the stores?
Review your monthly expenses and get an idea as to how you spend your money. If you notice that you are eating out for lunch and dinner often, try to cut back on those costs.
Bad Credit Camper Loans Tip #3: Consider Refinancing RV Title Loans
RVs can be used for title loans during times of financial stress, and sometimes the monthly title loan payments may also be difficult for borrowers. Especially if the loan has a higher interest rate because of bad credit.
However, bad credit title loans that have higher interest rates can also be refinanced. If you think that your credit has improved, you could look into refinancing the loan.
Bad Credit Camper Loans Tip #4: Sell the RV
If your RV is keeping you deep in debt and you just can’t stay current on your payment obligations, you might consider selling the vehicle.
However, you have to be able to sell your RV at a price that covers your debt. So how do you know how much your RV is worth? These factors all affect the RV’s value:
Use NADA Guides as a resource to help you find the value of your RV. Research your options, but remember, you have to be able to sell it for a value high enough to pay back the debt owed to your lender. Check out Investopedia for all the details about doing this the right way.
Bad Credit Camper Loans Tip #5: Try to Work with the Lender
Sometimes bad things happen that we just cannot control. Maybe you lost a job or there was a major expense that you couldn’t control.
If a major life change or emergency has caused you to fall behind on payments, contact your lender. Sometimes a lender may be able to work with you. Communicating with your lender is important, so if you are getting calls about payments, don’t ignore them.
However, if your lender can’t work with you, then you may have to find other options.
Bad Credit Camper Loans: Get Current, Stay Current
Once you dig out of your payment dilemma, work on a plan to keep those loan payments current each month. Always include your loan payments in your monthly expense spreadsheet.
Remember that paying on time may also help boost your credit score. Before you apply for any loan, understand your budget and how much you can feasibly spend on payments each month.
Never commit to a loan if you are uncomfortable with the monthly payment or the interest rates.
Remember, once you sign the paperwork, you are agreeing to the terms. Read everything, know your budget and plan ahead to ensure that you