Complete Guide to Campervan Financing:
Loan Options, Steps, and Tips

Imagine hitting the road for your next adventure but this time you’re in your very own van, with all your favorite gear, a cozy bed, a fully-stocked kitchen, and a hot shower. Whether you're looking to explore national parks or find epic hikes, live a nomadic lifestyle as a retiree or remote worker, or simply enjoy weekend getaways, Noovo vans offer the ultimate freedom and comfort for life on the road.

However, purchasing a converted van or recreational vehicle can be a significant financial investment. If you don't have the cash upfront, securing a loan might be the key to making your dream a reality. Campervan loans, also known as RV loans or motorhome loans, are specialized loans designed to help individuals purchase recreational vehicles. These loans can cover various types of campervans, from basic models to custom conversions.

In this blog, we'll discuss budgeting, types of loans, and how to navigate loan terms. We also offer a step-by-step guide through the loan process, and answers to your frequently asked questions. So keep reading for the inside scoop on how to get a campervan loan, and soon you’ll be on your way to owning your dream van!

Determine Your Budget

Before diving into the world of loans, it's crucial to have a clear understanding of your budget. Assess your financial situation, taking into account your income, expenses, and savings. Determine how much you can allocate to your monthly loan payments without jeopardizing your financial stability. Consider the total cost of the van, including taxes, registration fees, and any potential modifications or upgrades you plan to make, as well as gas prices and van fuel consumption.

Research Types of Loans

When it comes to financing your campervan, you have several loan options to choose from each with their own pros and cons, depending on your financial situation and personal preferences. It is also helpful to use an online loan calculator to estimate monthly payments based on different loan terms and interest rates. This step will help you determine how much you can comfortably afford to borrow and repay.

Personal Loan

A personal loan is an unsecured loan that doesn't require collateral. It's a versatile option that can be used for a variety of purposes, including purchasing a van. Personal loans typically have fixed interest rates and terms.

Auto Loan

Auto loans are specifically designed for vehicle purchases. They are secured loans, with the vehicle serving as collateral, meaning the bank will hold the title to the vehicle until it is paid off. Auto loans often come with competitive interest rates and various term lengths.

RV or Camper Loan

If you're purchasing a specialized campervan or RV, you might consider an RV or camper loan. These loans are tailored to the recreational vehicle market and can offer unique features, such as longer loan terms.

Home Equity Loan or Line of Credit

If you own a home and have built up equity, you might explore a home equity loan or line of credit to fund your van purchase. These options typically have lower interest rates, but they use your home as collateral. Along these lines, a loan for a campervan is not considered a mortgage, those are reserved specifically for homes.

Check Your Credit Score

Your credit score plays a significant role in your ability to secure a loan and the terms you'll be offered. Lenders use your credit score to assess your creditworthiness. The higher your credit score, the more favorable loan terms you can typically secure, such as lower interest rates. While there is no fixed credit score required to get approved for a campervan loan, most banks will look for a credit score of 600 or higher. More on this in the FAQs section!

Before applying for a loan, obtain a copy of your credit report and review it for any errors or discrepancies. If you have a lower credit score, consider taking steps to improve it, such as paying down outstanding debts, making on-time payments, and reducing your credit card balances.

Step-By-Step Guide for Loan Applications and Approvals

Shop Around for Lenders

Don't settle for the first loan offer that comes your way. Instead, shop around for lenders to find the best deal. You can explore traditional banks, credit unions, online lenders, and even dealership financing options. If you choose to finance through Noovo, we offer financing up to 20 years with a 20% minimum down payment. Get a quick estimate of your monthly payments within minutes!

Online lending platforms can be a convenient way to obtain quotes from multiple lenders in one place. Additionally, consider seeking recommendations from friends, family, or online communities dedicated to van life or campervan enthusiasts. They may offer insights into reputable lenders who specialize in financing vans and RVs. We also have a number of Noovo ambassadors who would be happy to speak with you regarding their experience with the campervan loan process. Contact us for more info!

Prequalify for a Loan

Before submitting a formal loan application, consider prequalifying with a few lenders. Prequalification involves providing some basic financial information, and the lender will assess your eligibility for a loan without performing a hard credit check. This can give you an idea of the loan amount and interest rate you might qualify for without affecting your credit score. Prequalifying can help you identify which lenders are likely to offer the most favorable terms, saving you time and potentially multiple credit inquiries.

Prepare Documentation

To complete your loan application, you'll need to gather a variety of documents. These typically include:

• Proof of income: Recent pay stubs, tax returns, or bank statements.
• Employment verification: Contact information for your employer or verification of self-employment.
• Personal identification: A driver's license, passport, or other government-issued ID.
• Vehicle information: Details about the van you plan to purchase, including its make, model, and VIN. The specific documentation required may vary depending on the lender and the type of loan you're applying for. Be sure to check with your chosen lender to ensure you have all the necessary paperwork ready!

Apply for the Loan

Once you've selected a lender and prepared the required documentation, it's time to submit your loan application. Many lenders offer online application processes that can make the process more convenient. Be prepared to provide accurate and truthful information during the application, as any discrepancies may affect your loan approval.

Review Loan Offers

After submitting your loan application, you'll receive loan offers from the lenders you've applied to. Carefully review each offer, paying attention to the following key factors:

• Interest rate: This is the cost of borrowing and will significantly impact your monthly payments.
• Loan term: The length of the loan can affect your monthly payments and the total cost of the loan.
• Monthly payment: Ensure the monthly payment aligns with your budget.
• Total cost: Calculate the total cost of the loan, including interest and fees.
• Fees: Watch out for origination fees, prepayment penalties, and other charges that can increase the overall cost of the loan.

Negotiate and Compare

Don't be afraid to negotiate with lenders to secure more favorable terms. Lenders may be willing to adjust interest rates or other aspects of the loan to win your business, especially if you have multiple offers. Be prepared to ask questions and seek clarification on any points that are unclear.

Comparing loan offers side by side can help you make an informed decision. Look beyond the interest rate to consider the overall affordability of the loan.

Choose Your Loan and Purchase Insurance

Once you’ve settled on the right loan for you, you now have the money available for your down payment on your dream van! To maintain and build your credit score, make sure to submit your monthly payments on time. Some banks can take up to 7 business days to post a transaction, so submit the payment ahead of time to avoid any late payments or penalities.

Regarding campervan insurance, in most cases lenders will require you to have comprehensive insurance coverage on your vehicle. This insurance protects the lender's interest in the vehicle in the event of an accident or other damage. Ensure that you have the necessary insurance in place and that it meets the lender's requirements.

Buy or Build Your Dream Van

Now for the FUN part! Finances are in order, your loan is approved, and now you get to actually buy the van! You can purchase a prebuilt campervan for sale, or you can design your own and make it exactly what you want. Want to learn more from other vanlife customers? Chat with a Noovo ambassador to hear about their process, or read more about life on the road in a Noovo van. With all the amenities of home in a modern aesthetic, Noovo vans give you the safety and comfort of traveling with ease.

Pros and Cons of Campervan Financing

Benefits of choosing the right financing plan

Campervan financing offers several advantages for aspiring van owners. One of the primary benefits is the ability to spread the cost of the campervan over time, making it more accessible to a broader range of individuals. Additionally, financing allows you to preserve your cash flow for other travel-related expenses or unexpected costs. Furthermore, if you choose a fixed-rate campervan loan, you can enjoy predictable monthly payments throughout the loan term.

Risks and how to mitigate them

While campervan financing provides a convenient way to own a recreational vehicle, it's essential to be aware of potential risks. One risk is the depreciation of the campervan's value over time, which may result in owing more than the vehicle is worth if you decide to sell or trade it in before the loan is paid off. To mitigate this risk, consider making a substantial down payment and selecting a loan term that aligns with the expected lifespan of the campervan.

The awesome part of owning a van is that you can always rent your van when not in use to offset costs!

Next Steps to Get Started

Now that you have a comprehensive understanding of campervan financing, you're well-equipped to take the next steps toward owning your dream home on wheels. Start by assessing your credit score, establishing a realistic budget through a loan calculator, and exploring different financing options. Once you've chosen the right loan terms, navigate the application process with confidence, and keep an eye out for quick loan approval tips.

Remember the pros and cons of campervan financing as you embark on this exciting journey. While financing opens the door to adventure, it's crucial to make informed decisions that align with your financial goals. With the right financing plan in place, now you can find a prebuilt campervan for sale or design your own dream van. Soon you’ll be hitting the road in your very own van, ready to explore new destinations and create lasting memories in comfort and style.