Can You Get an RV Loan for Sprinter Vans? What People Never Talk About.

Photo by Siora Photography on Unsplash

Van life is alluring. The freedom you have with this lifestyle is amazing, but the number one concern that people have is the financial aspect of van life. Getting a loan to purchase a RV, van, or mobile home can be difficult. Can you get RV loan for sprinter van?

Well, the answer depends on a few things.

In the last month, I went through the process of applying for a RV loan. There were a lot of roadblocks. I scoured forums for answers, but there isn’t a lot out there.

I applied to around ten different credit unions / banks and was rejected for various reasons, which I’ll share with you in this article.

Two Paths: Auto Loan or RV Loan?

Before you go down a path of desperately trying to get a RV loan, ask yourself if you need to.

If your sprinter van is less expensive (<40k), try applying for an auto loan. Auto loans are easier to get if you’re a first time buyer (i.e., me). I’ve gotten the furthest by applying for an auto loan, not a RV loan.

A caveat:

It’s difficult to get an auto loan if the value of the built-out van is far off from the market price of the van. A lot of banks look at NADA Guides to determine the cost of the vehicle. For example, let’s say you want to buy a built-out van that’s 70k. The price of the van without the build is 40k. The lender will only fund you for the 40k, not the 70k.

Two Types of Lenders You Can Apply To: Credit Unions and Online Banks

The forums I’ve looked at applying with your local credit union. Because they’re not-for-profit, they want to work with you. There’s more flexibility there.

I prefer credit unions because I get to talk to a real person. You have a higher chance of getting an RV loan if you get to talk to someone. A lot of the bigger banks I applied to send an auto-rejection based on their algorithm. The algorithm can be quite mysterious, so it’s frustrating when you’re rejected, and you don’t know why. If you speak to a real person, they’ll give you a more direct answer and try to work with you.

You could find a smaller bank who you can talk to in person, but I’ve only had credit unions reach out after I applied.

Can You Get RV Loan for Sprinter Van If You Have Bad Credit?

If you have bad credit, there are certain lenders that can still finance your RV. Do some research on which lenders work with bad credit, and try applying to different ones. There are some lenders that are particularly lenient about credit, like Southeast Financial and My Financing USA which are reputable lenders.

Surprisingly, my credit score isn’t what kept me from getting approved. I have excellent credit (over 750). Despite that, I wasn’t able to get a RV loan at all the places I applied.

Are You a First-Time Buyer?

This has been one of the biggest things for me. I’m a first-time buyer, meaning I haven’t bought anything this large before. Multiple lenders turned me down because I had a “thin credit file” or a “lack of comparables”. It means I don’t have enough credit experience.

How Much Can You Afford to Put Down?

I didn’t know how it worked before this whole thing, but the more you put down, the less you have to loan.

For example, if the van you’re looking at is around 50k, and you can put down 20k, you’re only applying for a 30k loan. The bigger the down payment, the smaller your loan. That means lenders are more likely to approve you if you have a thin credit file like me.

Can Someone Co-Sign?

At one of the credit unions, I was told to get a qualified co-signer since my credit history wasn’t enough. So, if you’re finding that you’re not successful with an individual application, try applying with someone that has a good lending history + credit score.

Depending on the lender, they might require you to live at the same address as your co-signer. Not sure how this works if you’ll be living full-time in a RV since you don’t have a permanent address. A potential loophole is using someone else’s address if they agree to co-sign for you. (I don’t know if this works, but I also don’t see how they could find out you don’t actually live there).

NOTE: There’s a difference between a co-buyer and a co-signer. Clarify with your loan officer on which one is needed.

If You Get on the Phone With a Lender…

After you submit an application for a loan, a loan officer will sometimes follow up with you by phone.

They’ll gather additional information from you, which they send to the Underwriting Team. In my head, I picture the loan officer as the friendly advocate. The Underwriters are the party poopers—they ultimately decide if you get the loan or not based on the info they have.

Could be totally inaccurate, but it’s funny to think about!

When someone calls you from a bank or credit union, pick up.

I’m a millennial and I get social anxiety when I get calls from unknown numbers, so I get it. But think of it this way: They are taking into account multiple things when they consider extending a loan. This includes how easy you are to contact.

If you don’t pick up and end up calling them back a week later, that’s something that can be counted against you. Be prompt, be polite, and pick up. If you miss their call, call them back as soon as you can.

Don’t Be Afraid to Call Your Loan Officer for Updates

Most loan officers I talked to were some of the most friendly, professional folks I’ve spoken to on the phone. If they’re from a credit union, they want to help you.

But they’re busy. If they tell you they’ll call you, and they don’t, feel free to follow up with them and ask for an update.

I do this about once a day during the loan application process. It may seem like a lot, but Underwriting teams have a quick turnaround. I’ve never had a loan officer seem annoyed that I’m calling. Usually, they sound grateful, like Oh my god, I was meaning to get back to you!

I’m guessing they get slammed.

Be Honest, but Don’t Tell Them Everything

If the lender asks you a question, it’s okay to be vague.

Some questions you might get dinged on:

• What’s your reason for buying a van?

What NOT to say: It’s my primary residence!

Even if you do plan on living full-time in a RV, many banks do NOT accept full-timers. It’s okay to be vague and just say you’ll be traveling a lot. Most banks don’t want to know what you’re doing with it, as long as you make your payments on time. (This is a different case with insurance.)

• Does the van have seats?

This one is tricky.

Different credit unions have different policies. One credit union classified the van as a RV loan if it did not have seats. Another credit union classified it as an auto loan even if it didn’t have seats.

I think the goal of them asking you this question is to figure out whether it’s a “commercial vehicle” or not. Many banks don’t allow auto loans for commercial vehicles. Different credit unions define “commercial vehicle” differently, and it’s not always obvious on their website.

I’d highly recommend hopping on a call with your loan officer to get this information.

The Final Verdict on RV Loans for Sprinter Vans

So, can you get RV loan for sprinter van?

I hope my experience of what not to do has proven useful for you! I had a lot of things working against me. However, if you follow the guidelines in this article, you’ll likely increase your chances of getting a built-out sprinter van financed.

Full disclosure: I never successfully got a loan to buy a sprinter van.

Instead, when my lease is up in March 2022, I’ll be Airbnb-hopping across the country until I can save up enough. This article talks about how I plan to save up and buy my own sprinter van.

If you want to see where I am in the process, you can stay updated on IG @_chasingembers. If you’re reading this in the future, maybe I live in a van already! Fingers crossed.