Whether you want to buy a new or second-hand motorhome, there is no way around the fact that it is likely to set you back a fair sum of money.

So, the purchase of a motorhome is likely to be one of those larger items for which you may need to borrow money. With that in mind, let’s look at some of the most frequently asked questions (FAQs) about motorhome finance.

What is motorhome finance?

Motorhome finance is a type of loan or financing option designed specifically for purchasing a motorhome. It allows individuals to spread the cost of buying a motorhome over time, typically through monthly repayments.

How much can I borrow?

The amount you can borrow for a motorhome depends on various factors, including your credit history, income, expenses, and the lender’s lending criteria.

When determining how much you can borrow, lenders will assess your affordability by considering factors such as your income, employment status, existing debts, and monthly expenses. They will also evaluate the value of the motorhome you intend to purchase and may require a deposit, which could affect the amount you need to borrow.

To get an idea of how much you can borrow for a motorhome, you can use our free motorhome finance calculator.

Keep in mind that borrowing for a motorhome is typically done through a secured loan, where the motorhome serves as collateral for the loan. As such, the amount you can borrow may be influenced by the value of the motorhome and the lender’s loan-to-value (LTV) ratio requirements.

Ultimately, it’s essential to carefully consider your financial situation and budget constraints before taking out a loan for a motorhome to ensure that you can comfortably afford the repayments and enjoy your motorhome without financial strain.

How does a finance company calculate that affordability?

As we touched on above, the motorhome finance company will consider the amount you are putting down as a deposit, your regular earnings and expenditure and – perhaps most important of all will examine your credit rating.

Any finance company is obliged to check your credit history – which illustrates how well, or otherwise, you have managed borrowing and credit in the past and, so, provides the lender some confidence in your maintaining the agreed repayment schedule on any new borrowing.

Don’t be misled by those advertisements suggesting that there is any such thing as “no credit check credit”.

How can I trust any lender to offer a fair deal?

Lenders providing motorhome finance advice need to be authorised and regulated by the Financial Conduct Authority (FCA) – and you may review the FCA register to confirm that here at Derby Motorhomes we have just such authorisation, trading as Motor Plus Derby Limited.

Not only is our motorhome finance business regulated by the FCA but it also means that if you subsequently have any complaint or dispute about your finance, you may refer the matter to the Financial Ombudsman Service.

Do I need a deposit for motorhome finance?

Some motorhome finance options may require a deposit, while others may offer 100% financing. The deposit amount required can vary depending on factors such as your creditworthiness, the value of the motorhome, and the lender’s requirements.

What types of motorhome finance are available?

There are various types of motorhome finance available in the UK, including Hire Purchase (HP), Personal Contract Purchase (PCP), Personal Loans, and secured motorhome loans. Each type of finance has its own terms, conditions, and repayment structures.

What is hire purchase (HP)?

Perhaps the most familiar form of motorhome finance is hire purchase. If your application is approved, you typically need to find a deposit of around 10% of the purchase price of the motorhome you have chosen.

The balance of the purchase price is then repaid in equal monthly instalments over the agreed term of the hire purchase agreement. In some instances, you may be able to opt for monthly repayments followed by a larger, final, “balloon” payment.

It is worth remembering that legal ownership of the motorhome does not pass to you until the final instalment has been paid and that if you default on the repayments, your motorhome may be repossessed.

What happens if I can’t keep up with repayments?

If you’re struggling to keep up with repayments on your motorhome finance, it’s essential to contact your lender as soon as possible to discuss your options. Depending on your circumstances, your lender may be able to offer temporary payment arrangements or alternative solutions to help you manage your repayments.

Can I pay off my motorhome finance early?

In most cases, you can pay off your motorhome finance early by making additional payments or settling the outstanding balance in full. However, early repayment terms and fees may apply, so it’s essential to check with your lender before making any early payments.

How can we help?

For more information on how we can help you with motorhome finance, please visit our dedicated page here or please give us a call on 01332 360222 – we’d be delighted to help.