FAQ on RV Financing
Financing an RV purchase can be a daunting task. Because RV loan amounts are often significant, banks have very strict requirements that must be met before a loan is offered.
Should one apply for financing before or after selecting an RV to purchase?
This matter is really one of personal preference. Lenders can accommodate loans at any time, either before or after a model is chosen. Many shoppers, however, find that the negotiation process is easier when financing approval has already been obtained.
Banks can take your loan application and give you a pre-approval for a maximum loan amount. Then you can shop for an RV that meets the requirements. Dealers are more likely to accept offers when they know the funds needed to make the purchase are available.
Additionally, obtaining a loan pre-approval can alleviate headaches later. Many shoppers are disappointed when they have already fallen in love with a model, only to find that the bank will not grant the loan.
Does financing have to come from a bank?
RV financing does not have to come from a bank.
Dealers often have relationships with finance companies that can help you purchase an RV.
Can the interest on an RV loan be claimed as a tax deduction?
Most RVs qualify to be treated as second homes by the Internal Revenue Service.
In some cases, the loan interest paid may be able to be deducted. You should consult a tax professional for more information pertinent to your situation.
Most lenders require all vehicles that are used as collateral for loans to be tagged within 30 days of purchase.
Why does the bank want proof of insurance?
Lenders require that all vehicle loan collateral is insured so that they are protected in the event of a loss. The bank should be listed not only as the lien holder, but also as a loss payee on your policy. In addition, the bank may require that your policy adhere to specific coverage limits.
Your insurance company should forward a copy of your policy to the lender as soon as possible. If the policy information is not received within a specified amount of time, most lenders will purchase proper insurance on your behalf. The premium amount is then added to your loan balance due.
Some lenders, however, will not purchase insurance. Instead, they will “call the note.” “Calling the note” simply means that the bank rescinds the loan and demands immediate payment of the entire loan balance. To avoid this situation, read your loan contract carefully and adhere to its requirements.