In the last couple of weeks I have had three or four e-mails from blog readers asking about RV financing. Getting a loan for a big ticket item like an RV can be a challenge, and if you are a fulltimer it can be all but impossible through many lenders.
One e-mail was from a couple who said they have excellent credit and have never had a problem getting a loan for anything in the past, but now that they have become fulltimers they are running into a brick wall and have been rejected by the two banks they have always done business with in the past, including their home mortgage, automobile loans, home equity loans, and a loan for a boat. They said the branch manager told them that if they were still living in their sticks and bricks house their loan would have been approved, but as fulltimers they do not qualify.
It seems to be getting harder to find financial institutions that are willing to work with RVers all the time but it can be done.
One thing I would urge all of you to consider is joining a credit union. They are member owned and much easier to work with than banks. And these days you don’t have to belong to a union or work at a certain company to join one.
Even if you have excellent credit, fulltime RVers have a hard time getting a car or RV loan because we have no fixed address, just a mail forwarding service. So if we default, how do they find us to repo? Now throw in being self-employed, like Terry and me, and in our case, further complicate things with Terry’s cancer and the huge bills we were left with when our insurance company denied her claim, which wiped us out financially and took years to rebuild.
When we started shopping for an RV to replace our old worn out MCI bus conversion, banks would not even talk to us. At an RV rally I chatted with a rep from Alliant Credit Union and she said to open an account with them. Four months later they loaned us $85K to purchase our motorhome. A few months later we wanted to upgrade our computers and they upped our credit card limit from $5K to $10K to cover that purchase. A couple of years later we wanted to replace our van with a nice used Ford Explorer and I called them to ask about auto financing and they said to just go find what we wanted and fax them the paperwork. No problem with a $10K loan for the SUV purchase.
Of course, we pay them on or before our due dates religiously and have developed an excellent working relationship with them over the last few years. If any of you are interested in joining Alliant Credit Union, my contacts there are Richard Holke at rholke@alliantcreditunion.com and Jadwiga Goracnynski at jgoraczynski@alliantcreditunion.com. Tell them Nick Russell from the Gypsy Journal sent you. And for the record, I get no compensation for referring new members.
I seem to be hearing about more and more lately about individuals advertising “creative financing” for RVs on places like Craig’s List and even signs on telephone poles. From what I can figure out, they are hustlers who find somebody desperate to get out from under an RV loan and charge them a finders’ fee to locate somebody to take over the loan payment. Not the loan itself, just the payment. Then they find someone who cannot get conventional financing and draw up a contract whereby the new purchaser pays them the monthly payment plus an added fee they tack on to cover their services, and they forward the payment on to the bank.
A deal like this is full of dangers for both the buyer and the seller. The RV owner has no guarantee that the new buyer will make the payments, and if they do, there is no guarantee that the middleman will actually pay the bank the money received. On the other hand, the title to the RV remains in the original owner’s name and the buyer has no guarantee that the middleman will apply the money he pays toward the loan, or that he will ever get a clear title. What if the original owner declares bankruptcy? The RV is going to be seized, no matter what kind of private deal is in place between the individuals. And I can guarantee you that no bank in the world if going to let a deal like this go on if they find out about it. They don’t know the new buyer or the middleman, and are going to demand payment in full or that RV is going to get repossessed. If somebody offers you a deal like this, grab your wallet and run.
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Nick Russell
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Nick we are running into the same issues in obtaining RV financing. An excellent credit rating and a healthy investment portfolio and our bank has turned us down twice now. I used to buy and sell classic cars and motorcycles as a sideline and before we started fulltiming I could get a short term signature loan for $10,000 or even $15,000 if I found a car or bike I wanted. Now they won’t finance a new fifth wheel even with 30% down! But they did let me co-sign a note for my son’s house. Now explain that to me!!
We dealt with one of those “RV brokers” you wrote about Nick. Actually, a salesman at an RV dealership put us on to him. He wanted us to take over payments on a 2 year old Tiffin Phaeton with no contract. He would not tell us who the owner was or even what bank it was financed with. I asked him what kind of guarantee we had that we’d actually get a clear title when it was paid off and he said his word was his bond and that’s all we needed. Not for us it wasn’t!
We joined Alliant Credit Union last year after Escapees made a deal with them for all Escapees members to be eligible. We have never been happier. We were very unhappy with our bank for all kinds of reasons and were just looking for a better bank. The added benefits were the ability to refinance our RV loan with a much lower interest rate and shorter term. Then just this January decided to buy a car and they financed the whole thing with an incredible low interest rate. I highly recommend them to any RVers.
Nick…a new source of financing is “Prosper.com”. This is one of the two main forces in the new lending industry of bypassing regular banks and lending monies directly to the consumer by other consumers in the P2P industry, Peer to Peer Lending. They loan up to $35,000. Check out Prosper.com website.
By the way, I started investing some of our monies in P2P Lending with Prosper and the results are incredible in this period of low interest rates. I am getting over ten percent annually with little downside risk (because I have diversified my portfolio with over 400 loans). Something for seniors with fixed incomes to consider.
It wasn’t through one of the brokers you talked about but our son and his wife got burned in a similar deal on a house. It was owner financed with $7500 down and they lived in it for 3 years and made every payment on time. They also installed a deck and hot tub, added a bedroom, new carpet and other improvements. One day his wife came home from work to find an eviction notice stuck on the front door. The man who was carrying the paper on the house had defaulted and not made his payment to the bank in 15 months! They tried to work it out with the bank that held the mortgage and they would not even talk to him. There were also 2 other liens for money he had borrowed against the house. They lost everything they had in it.