6 Steps to Take Over an RV Loan Without a Credit Check
Updated on March 4, 2024 / 4 min read
Since RVs are expensive, people often apply for loans to cover the cost. But, after a few months, they realize they can no longer afford to repay the borrowed money. In such a situation, someone else can consider taking over their auto payments through the loan assumption process. Since taking over payments is a complex procedure, one must be cautious. Thorough research will help determine if taking over an RV loan is the right option.
Understanding a vehicle loan takeover
The process of taking over loan payments is called loan assumption. It means someone else will be responsible for repaying the outstanding loan balance. In the case of auto or RV loans, this also means the new individual will become the vehicle’s owner.
Several lenders in the country offer assumable loans, which allow others to take over an automobile buyer’s outstanding payments. That said, one should have a loan assumption written into the paperwork. If not, one might be unable to sell the RV to another individual and let them take over the pending payments.
Taking over an RV loan without a credit check
Taking over someone else’s RV loan can unlock several benefits, such as lower monthly payments. But, banks may not allow people to take over a loan if they do not have a good credit score. They usually perform a credit check and only then let the individual take over RV payments. That said, there is a way to avoid a credit check before taking over RV payments.
1. Find a co-signer
To take over RV payments without a credit check, one will first need to enlist a co-signer with a good credit score. The co-signer could be a family member, a friend, or anyone who can assume responsibility for the loan if one fails to repay the amount after the loan takeover.
2. Meet the seller
Taking over an RV loan might be time-consuming and challenging. While enlisting a co-signer with a good credit score can help make things easier, it is still important to meet with the seller first. A face-to-face meeting will help ensure the seller is legitimate and trustworthy. It will also provide one with an opportunity to inspect the vehicle with the help of a mechanic. Confirming seller information and learning more about the loan being taken over is essential to making an informed decision.
3. Have the RV owner speak to the lender
Before discussing any details of the loan assumption, one must ensure the seller speaks to the lender and confirms that a loan takeover is possible. If the lender allows it, the co-signer will need to apply and complete a few formalities.
4. Ask for a copy of the original loan contract
The current RV owner must produce the original loan contract or request a copy from the lender. The new buyer must then read it thoroughly to ensure all the details are fully understood. One should also look for fees and other potential costs associated with assuming the loan. If any terms are unclear, one could contact the lender directly to seek clarification.
5. Prepare supporting documents
The individual taking over the loan will need to provide proof of income and information about themselves with other common documents required for automobile loans. They must also coordinate with the seller ahead of time to ensure a letter of assignment (or a bill of sale) is ready.
6. Apply with the lender
To take over the auto loan, the co-signer has to apply with the seller’s lender. This process typically works like any other new or used RV loan application. It involves the co-signer undergoing a credit check to determine their credit score and financial standing. After the credit check, the lender or bank may draw a new contract stating the revised loan repayment schedule and rates. If the person interested in the RV or the co-signer is unsatisfied with the terms, one can always try to get a loan from a different lender.
Things to remember before the purchase
If one decides to take over an RV loan with the help of a co-signer, one must keep a few things in mind.
- The individual should ensure they can afford the payments. For instance, if the seller owes $20,000 and is selling the RV for $30,000, one will be taking over the full balance plus $10,000.
- The buyer must ensure the automobile is worth the money. Checking online market prices will help determine the current value of the RV. One can also check the features of the vehicle to ensure they meet one’s expectations.
- The buyer should ensure they can repay the loan within a set period, as the original contract specifies. In some cases, the repayment term could be more than five years.
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