Camper Van Financing 101: How to Afford Your Dream Van

Essential Tips on How to Finance a Camper Van

Ready to hit the open road? Securing the right financing for a camper van can make or break your road trip adventure plans. To help remove some of the complexity, we’re breaking down the topic of how to finance a camper van to make it easier to understand your options, from cost-effective strategies to important lending criteria. The goal here is to give you the upfront knowledge so you can make informed decisions based on your personal finances.

Key Takeaways

• Potential loan options include traditional vehicle loans, RV loans with the potential for a long-term payoff, and unsecured personal loans.
• Financing choices are varied but include these possibilities: bundling conversion costs into the initial van loan and using platforms for DIY van conversion financing.
• Securing camper van financing should be done carefully while comparing funding based on individual budgets and needs.
• Financing is influenced by factors like credit score, down payment, insurance, and loan negotiation.

Reviewing Your Camper Van Financing Options

While you’re likely ready to hop in and buy your dream van, the financing aspect can be daunting. Thankfully, there are several camper van financing options available, including traditional vehicle loans, RV loans, and personal loans. While each has unique advantages and requirements, selecting a loan is a personal choice.

Whether you want a fancy Sprinter van conversion or a Ford Transit for a DIY van conversion, understanding your financing options is crucial. It’s one little step (okay, a big step) on your journey to camper van ownership.

Traditional Vehicle Loans

A typical way to finance a camper van is through a traditional vehicle loan. Unlike a regular car loan, these loans can offer longer terms for camper vans, extending to 15-20 years. This is good news for those camper vans priced similarly to a starter home.

Your loan eligibility is determined by several factors, including a comprehensive evaluation of your credit history.

Some financing options like credit unions, for example, may not be as strict about a minimum credit score for RV loan approval, but they can provide a more flexible funding option depending on your circumstances.

RV Loans

RV financing is a good option for financing your camper van purchase. An RV loans is tailored specifically for recreational vehicles, and understanding the nuances of that specific vehicle loan is essential. Also, if you obtain pre approval for the initial loan, you can walk into RV dealerships with substantial negotiating power.

An RV purchase is a significant investment, and an RV loan might be the best option. Factors that can influence the terms of your loan include the purchase price, model years, type of RV, whether it is a used camper or new, and whether you have a down payment.

The best way to finance your RV depends on individual financial circumstances and is dependent on whether you are looking for longer loan terms or the best rates. The two don’t always go hand in hand. However, longer loan terms are a great option for those looking for a lower payment and can be an especially good option if you don’t have a large lump sum for a down payment.

How Long Are RV Loan Terms?

The length of an RV loan (loan term) can vary substantially. Some financial institutions offer financing options that start with short-term loans of 24-72 months. Other financing options extend the loan term up to 15-20 years. Your financial standing impacts the types of loans you will be eligible for, so shopping around to identify the best option for your situation is recommended before committing to a camper van purchase.

Another factor to consider is that most RV loans require a 10-20% down payment.

What Interest Rates Are Typical for an RV Loan?

Current interest rates for RV loans range from 6.49% to 19.9%. These can vary based on several factors, including credit score and the individual financial institution. An RV loan is like any other loan in that a higher credit score typically indicates qualifying for a lower interest rate. In contrast, a bad credit score would result in a higher interest rate. However, when looking for the right loan, consideration should also be given to exploring rates offered by different lenders because they often have varied interest rate starting points.

Personal Loans

Another financing option is a personal loan. Personal loans are a flexible alternative but typically have higher interest rates than RV loans. However, they do not require collateral, which means you can finance your van conversion without securing the loan with your property.

This type of loan is suitable for someone who wants to keep a shorter-term loan (usually 2-7 years) or refinance with a different kind of loan later.

With an unsecured personal loan, the loan amount can be for the entire purchase of the new RV, eliminating the need for a down payment. This, of course, depends on the loan agreement and the loan amount qualified for.

Source online lenders to research the financial products they offer for unsecured personal loans to see if this is a good option for you.

Options for Bundling the Conversion With the Van Purchase

One thing to consider when financing your camper van is the conversion project cost. Van conversion costs can be considerable, and some conversion companies now offer financing options that include the conversion in the initial van loan. This helps simplify the financing process and has the potential to lower overall costs.

Considering your needs and budget is vital when selecting modifications for your conversion, where costs can add up.

What About DIY Conversion Van Financing Options?

If you’re pumped with the idea of building your own custom conversion project, DIY conversion financing is available and can provide a flexible, cost-effective solution. Whether you use a personal loan for financing through an online platform that connects customers with tailored financing options. An RV loan calculator can help figure out precise costs.

Choosing the Right Camper Van for Your Needs

Beyond financial aspects, there are other criteria for finding the perfect camper van that meets your lifestyle and travel needs.

• Size
• Model
• Fit

Determining which is right for you depends on a variety of factors. If living on the road full time, you might consider a large campervan, while if you’re using it for occasional weekend trips, a micro campervan might suffice. Another thing to consider is family size, or the number of people typically traveling on camping trips.

Popular Camper Van Models

Figuring out which camper van model is right for you can be a tough decision, and there are several popular conversion van models to choose from:

• Dodge Promasters
• Ford Transits
• VW Vanagons
• Mercedes Benz Sprinter Vans

These offer versatile benefits with the model that is right for you striking a balance between your budget, lifestyle and travel preferences.

New vs Used Camper Vans

Should you buy a new or a used camper van? There are pros and cons to each choice, so it needs to be a personal decision. The price will be lower with a used van conversion, but there could be unseen costs.

The pros of buying a new van include:

• Latest and greatest features
• Warranties
• No hidden issues

The pros of buying a used van:

• Cheaper, so lower entry point
• Depreciate at a slower rate

The cons of buying a used conversion van:

• They may come with hidden issues

Budgeting for Your Camper Van Conversion

Once you’ve selected your dream van, it is time to make a conversion van budget. Since van conversion costs vary widely, there are many factors to consider when creating a budget. The first thing needs to be if this will be a DIY project or a professional conversion.

A basic DIY project might cost as low as $4,000. However, a luxury professional conversion might cost upwards of $100,000. This is quite a range, which is why it is important to note your project requirements. If using a professional conversion company, get a breakdown of costs to understand what you are paying for and if there are aspects of the project that you’d like to remove or, alternatively add on to.

Budgeting appropriately helps you stay on track and stray away from potential hidden costs.

DIY vs. Professional Conversions

Wondering if you should do a DIY conversion? These can be a cost-effective way to create your dream camper, but that does require time, planning and technical expertise. It can also provide a huge amount of personal satisfaction and be done at a fraction of the cost of a professional conversion.

Things to keep in mind available with a professional conversion that a DIY conversion doesn’t offer: quality assurance and warranty. If the higher initial investment isn’t a decision breaker, this can be a less stressful and less time consuming avenue.

Hidden Costs to Consider

As with any large expense, it is important to think about hidden costs when making a budget. For a camper van conversion, these costs can include things like water systems, electrical setups, solar panels, and other exterior upgrades.

Factor in the costs of any upgrades you want upfront to avoid surprise expenses down the line. A good rule is to add cushion to your budget to ensure additional costs fit into your conversion budget.

Improving Your Chances of Securing Camper Van Financing

Before you start looking for financing options, it is a good idea to take inventory of your financial health. Obtaining secure financing for your camper van goes beyond just opting for the right loan. Things like improving your credit score, saving for a down payment (typically 10-20% on an RV loan), and negotiating loan terms can help improve your chances of approval and to inevitably help you get the best deal with competitive rates.

A great way to get an overall look at your financial health is to look at your debt-to-income ratio. The goal here is to be bringing in more money each month than what is going out in monthly payments, and to be able to show that you have room to take on an additional monthly payment.

Another factor to consider if you have a lower credit score (which will result in higher interest rates) is to take steps to improve that score, which we will talk about in more detail below.

Combined, reviewing this financial information can help identify any problem areas that need work prior to applying for financing. It’s best to be aware of any red flags before you begin the loan process rather than uncovering them during the financing process.

What Credit Score Do You Need for a Camper Van Loan?

One of the main factors to secure financing, whether a traditional vehicle loan or an RV loan, is your credit score. While a credit score of 700 is considered favorable, there are several lending options available for those with credit scores of 550 and above. Just keep in mind that lower credit scores will result in higher interest rates on your loan.

Building a relationship with a bank or credit union and seeking lending through them can potentially make your credit score less integral for loan approval.

Researching the Camper Van Insurance Policy Landscape

Having the right insurance lined up for your campervan is just as important as obtaining financing. From liability and comprehensive coverages to coverage for roadside assistance and more, it is essential to have RV insurance in place prior to driving your campervan off the lot. This might take some shopping around, as it is important to find an insurance policy that meets both your coverage needs and your budget.

Types of Insurance Policies

There are a few different types of coverage (insurance policies) that are available for camper vans:

• Liability coverage- this is mandatory
• Comprehensive coverage- this protects against non-collision related damages
• Collision coverage- as the name implies, this protects against collision-related damages

In addition to the typical vehicle insurance, there are other specialized insurance options like: sound system coverage, vacation liability and even trip insurance that can add a little cushion of protection for your conversion van adventures.

Ready, Get Set, It’s Camper Van Time

Take a deep breath and imagine you’re sitting outside your camper van in your dream location. You’re almost there. Financing a camper van doesn’t have to be excruciating. Like any other process, you just have to follow the steps to get there. From making sure your financial house is in order, to choosing the right financing and insurance carrier, and budgeting for your specific conversion project costs, your dream of the van life can become a reality. Take note, the freedom of the open road is worth it!