Canada's breathtaking landscapes beckon to RV enthusiasts, offering countless miles of scenic beauty to explore. However, the excitement of camping in Canada can sometimes be shadowed by the challenge of obtaining recreational financing, especially when your credit history is less than stellar. This blog post will guide you through the ins and outs of financing an RV with bad credit in Canada, illustrating how recreational loans may or may not be as unreachable as they might seem.
Understanding RV Financing and Trailer Loans in Canada
RV financing is often not as straightforward to secure as automobile loans. Major banks frequently view these as higher risk and tend to avoid them. As a result, bad credit RV loans are often handled by specialized asset lenders who primarily work with dealerships rather than directly with the public.
The structure of most recreational loans is similar to other asset loans where the RV acts as collateral. This mitigates some of the risk for lenders, as they can claim the asset if borrowers default on the loan. While this security element makes it feasible for these specialized lenders to provide poor credit camper loans, it's important to remember that the risk associated with lending to individuals with a troubled credit history is typically reflected in higher interest rates. It is also worth noting that some of these lenders report to credit which, in the long term if paid on time, can help to prove positive payment history and give a boost to your credit bureau.
One important thing to bear in mind is that asset lenders in Canada do not offer loans for those looking at living in an RV. This is due to many rules and restrictions involved with repossession when the RV is your primary residence.
Comparing RV Financing Rates
As of July 2023, the starting rates on RV financing stand at 9.9% and can reach as high as 29.9% in extreme cases. This might seem steep, especially compared to the more conventional bank loan rates that hover closer to 5%, and especially with manufacturers who offer their own financing buying the rate down to as low as 1-2%. We cover manufacturers financing in part in our guide to financing an RV in Canada. With all of this in mind, it's important to balance this higher cost against the opportunity of securing your dream RV and embracing the joy of camping in Canada.
Finding a Trustworthy Lender for Your Camper Loan
Finding a trustworthy lender is crucial in this process. Partners like Revival Powersports offer comprehensive travel trailer financing options, including for private sales found on platforms like KIJIJI, Facebook Marketplace, or even other dealerships. They operate with a transparent fee model and maintain full fee disclosure, which can help you understand and navigate the process more efficiently.
Preparing for Your RV Loan: Using an RV Loan Calculator
Before embarking on the journey of securing a bad credit RV loan, doing your homework is essential. Research the market, understand the terms of your loan agreement, and ensure you're getting a fair deal. Consider your ability to manage the repayments, as failure to do so could put your new RV at risk. Utilize tools like our RV loan calculator to gain accurate insights on loan costs and help you plan.
Embracing the Adventure with Recreational Financing
Even with less-than-perfect credit, RV loans in Canada are not unattainable. By working with specialized lenders and understanding the process, you can soon be driving through the stunning Canadian landscapes in your own RV, soaking in the freedom and allure of the great outdoors. If you can manage the payments at a higher interest rate, the joy of embarking on your dream camping trip in Canada may just make it all worthwhile. Of course, it is always best to temper your excitement and make responsible financial decisions at the end of the day, so ensure to use the tools and knowledge from this post to make an educated decision.
