“How much can I borrow for a motorhome?” is one of the first questions most buyers ask, and it’s a sensible place to start. Knowing your likely budget before you visit a dealer or private seller helps you focus on the right vehicles and shop with confidence.
There isn’t a single answer, because the amount a lender will offer depends on your circumstances and the motorhome you choose. The good news is that the factors are fairly straightforward once you know what lenders look for.
This guide explains how lenders decide how much you can borrow, how to work out a comfortable budget, and the simple tools that can help you plan.
How lenders decide how much you can borrow
Affordability: your income and outgoings
Affordability is the most important factor. Lenders must be satisfied that you can comfortably manage the monthly payments alongside your other commitments, both now and for the length of the agreement.
They’ll look at your income, your existing credit commitments such as loans and credit cards, and your regular outgoings. What matters is how much is genuinely left over each month, not simply how much you earn.
If you’re self employed or retired, you can still apply. You may just be asked for different evidence, such as accounts, tax returns or pension statements.
Your credit history
Your credit file shows how you’ve handled borrowing before. A strong record can open up a wider choice of lenders and larger amounts. Past problems don’t automatically rule you out, but they may mean a lender offers a smaller amount or a higher rate. Our guide to bad credit motorhome finance explains more.
The value and age of the motorhome
With most motorhome finance, the vehicle itself acts as security. Lenders therefore look at how much you want to borrow compared with the motorhome’s value, often called loan to value.
Borrowing close to the full value of an older motorhome is usually harder than borrowing the same proportion against a newer one. Lenders also consider age, mileage and condition, as these affect what the vehicle is likely to be worth during the agreement.
Your deposit or part exchange
You don’t always need a deposit. However, putting money down or part exchanging your current vehicle reduces the amount you need to borrow. That can make an application more straightforward and reduces the total you repay.
The length of the agreement
Spreading the cost over a longer term lowers the monthly payment, which can make a larger amount affordable on a monthly basis. The trade off is that you pay interest for longer, so the total cost of the finance is usually higher. Find out more in how long can you finance a motorhome for.
Is there a minimum or maximum amount?
Each lender sets its own limits, so the range available depends on who you’re matched with. Through our panel of lenders, Pegasus Finance can arrange motorhome finance from £10,000 up to £350,000, with terms from 1 to 15 years.
That covers everything from an older coachbuilt motorhome to a brand new luxury A class. For larger amounts, lenders will usually look more closely at income evidence and the vehicle itself, so it helps to have your paperwork ready. You can read more about how it works on our motorhome finance page.
Working back from a comfortable monthly budget
Rather than starting with the most you could borrow, many buyers find it more useful to start with the monthly payment they’d be happy with.
- Look at your monthly budget. Work out what you can comfortably set aside each month after your essential bills and existing commitments.
- Allow for running costs. Insurance, road tax, servicing, storage and fuel all need a place in your budget too, alongside the finance payment.
- Try different terms. Use our finance calculator to see how the monthly payment changes over different lengths of agreement.
- Factor in your deposit. If you have a deposit or a part exchange, take it off the vehicle price to see how much you would actually need to borrow.
This gives you a realistic price range to search within, and helps you avoid falling for a motorhome that stretches you further than you’d like.
Tools that can help you plan
A few simple tools make the planning much easier:
- A finance calculator gives an illustration of monthly payments for different amounts and terms. Remember that it’s a guide, and the rate you’re offered depends on your circumstances.
- Your credit report shows what lenders will see. You’re entitled to a free copy from each credit reference agency, and MoneyHelper’s credit guides explain how to check it and correct any mistakes before you apply.
- A household budget planner such as the free MoneyHelper budget planner helps you see clearly what you have left each month once everything else is paid.
- Price checks on similar vehicles help you judge whether an asking price is fair. Compare motorhomes of a similar age, layout and mileage from the same manufacturer.
- Insurance quotes are worth getting early, as premiums vary between vehicles and can affect your overall budget.
Borrow what’s comfortable, not the maximum
The amount a lender is willing to offer and the amount that suits you aren’t always the same. A slightly smaller loan can leave room in your budget for trips, upgrades and the unexpected, which is what owning a motorhome should be about.
If your circumstances change during the agreement, talk to your lender early. Many have options to help, and it’s always easier to find a solution before payments are missed.
Tips to strengthen your application
- Register on the electoral roll at your current address.
- Pay down existing balances where you can, as lower commitments improve affordability.
- Avoid lots of credit applications in the months before you apply. Our initial check is a soft search, which won’t affect your credit score.
- Consider applying jointly with a partner if both incomes will support the payments. Remember that you’d both be responsible for them.
- Get your documents ready, such as recent payslips or accounts, bank statements and proof of address.
How Pegasus Finance can help
At Pegasus Finance, your dedicated personal advisor will listen to understand your exact circumstances and help you find an amount and term that feel comfortable. We’re a broker, not a lender, so we can match your application with lenders whose criteria suit you, whether you’re buying new, used or from a private seller.
We can also help you get approved before you start shopping, so you know your budget before you fall in love with a particular motorhome. Our service is free to use, with no obligation, and you can apply online in just a few minutes.
Conclusion
How much you can borrow for a motorhome comes down to affordability, your credit history, the vehicle and the agreement you choose. Starting with a comfortable monthly budget, rather than the maximum on offer, is a sensible way to enjoy your motorhome without financial worries.
When you’re ready to find out what’s possible, our friendly team is here to demystify the whole process and help you get on the road in the vehicle you’ve always dreamed of owning.
Finance is subject to status and affordability. Terms and conditions apply.
