Can you finance a Skoolie? (3 options)

In this blog post, we will discuss the following topic: Can you finance a Skoolie? We will explain how you can get money for a Skoolie and give you a few tips on how to increase your chances of getting credit for converting a school bus. 

Can you finance a Skoolie?

The financing of Skoolies poses a problem.  In fact, in the US, it is unfortunately not possible to finance this type of housing with a mortgage. Currently, banks are not inclined to grant this type of loan.

This is why in the absence of the necessary funds available to build a Skoolie, it will then be necessary to resort to the conventional loan. The problem is that in this second scenario the interest rates are unfortunately much higher.

In fact, for a mortgage loan, the interest rate is around 2% while for a line of credit the loan will be around 10%. That is almost five times more expensive.

This is why before embarking on the project of building or buying a Skoolie, it is essential to raise as much money as possible in order to take out the smallest possible line of credit.

The best is still to manage to pay for your Skoolie in cash. It takes saving for a while, the best way to do this is to save every month. The best thing is to manage to save enough so that you can get rid of the financial burden of loans and mortgages. By freeing yourself from this stress, you will be able to fully enjoy your Skoolie.

It is also possible to provoke fate a little … Whoever tries nothing has nothing, which is why I recommend that you try everything for everything! Make an appointment with your banker and ask him what is your financial capacity to buy a property.

Thinking that you are talking to him about a conventional home, this one goes according to your job, you quite easily grant a loan of $100,000. Once he has told you how much he would be willing to give you, explain to him that this is not for a conventional house but that it is for the purchase of a Skoolie. Then see how he reacts.

If their reaction is negative, well you can always take comfort in telling yourself that the rate the cost of borrowing is lower, then you can pay them off faster!

How to finance a Skoolie?

Since most converted school buses cost between $ 25,000 and $ 40,000, it’s possible to buy one with a personal loan if you have a property that could serve as collateral. Otherwise, you have two other options:

  1.  Financing from the seller: If you don’t plan to build from scratch Skoolie yourself, you can pay a seller to do it for you. The advantage of this option is that most sellers offer the option of financing. 

Usually, you have to pay a third of the price upfront, as a kind of deposit, then you pay another third when the amenities are up, and the rest when the Skoolie is fully built. You should still use this time to save your money, but you don’t have to have the full amount when buying the Skoolie. 

  1. Save/pay for your Skoolie in cash: This option lets you choose to buy the materials and build it yourself or buy it from a retailer. This is not the most popular option, but think about it: The price of the Skoolie is the equivalent of a down payment, which you would have to save anyway if you wanted to buy a house or a condo, isn’t it? 

How much relief would it be to save and shell out the full sum of your Skoolie with cash and never own a mortgage (even if you have to shell out a monthly amount for the rent of the land you have landed on your house.)

One of the philosophies of the Skoolie movement is to take the clutter and stress out of your life. By paying for your Skoolie with cash, you are getting rid of the biggest financial burden that most people face for many years to come. By freeing yourself from this stress, you can make the most of your home and invest your money elsewhere. If you love to travel, a Skoolie on wheels means the world is at your fingertips.

Some advice to reduce Skoolie costs

  • Become a minimalist. It’s the famous open door … But when we think about our personal contribution and the amount to ask the bank, we sometimes forget to take into account that we will not be able to take everything in our Skoolie. 

If you are cluttered for years, you will probably need to get rid of several bulky items. Sell ​​them in advance to get the best price and increase your personal contribution. One or two thousand euros can easily be reached with a little effort!

  • Consider whether you are going to travel with your Skoolie. Do you want to move to a different state but you want to do business with a manufacturer from your current state because it is cheaper? Remember to take into account the cost of the trip, your bill may quickly increase. The ideal is therefore to choose a manufacturer close to your place of installation, the planet and your wallet will thank you.
  • Ask multiple banks for finance. Before committing, ask for several loan quotes. Be careful to select them from the start because this task quickly becomes time-consuming. If you are not averse to online banking, some of the banks often have fairly accurate online quotes. 
  • Use sustainable materials. This is an option that we find particularly interesting. By recycling materials, or by recovering surplus from conversion sites, you can not only not waste resources, but also optimize your bus conversion costs. 

Because the reductions are far from negligible, some range from -50 to -80% and concern joineries such as windows, wood flooring or even exterior cladding! Depending on the stocks of our supplier, we will suggest that you use his services during the conversion of your Skoolie. If you prefer brand new materials, that is possible of course as well.

  • Buy a second hand. Prices vary greatly and this has the advantage of making your Skoolie immediately available! Great for shopping on a thoughtful whim!

To finance a Skoolie, approve it as an RV

The easiest way to finance a Skoolie is to homologate and approve it as a reactionary vehicle. We have left this option to the end because it is necessary to take some extra steps in order to have your converted bus approved as an RV. 

Here is a concise summary of all the steps you will need to follow in order to have a converted bus approved in the US:

  1. Apply to the manufacturer for authorization to decommission the vehicle;
  2. Make a plan of the layout of the vehicle, noting everything that will be changed in the specifications;
  3. Carry out work on the bus to standards by following the steps of approval;
  4. Present the vehicle to an approved inspection body: they will check all gas-related installations, electrical installations, ventilation, and heating in order to obtain the certificate required for the file;
  5. Weigh the vehicle with all the fittings, the water tanks, the full tank of diesel, the driver in 3 steps, the front axle, the rear axle, and both axles at the same time in order to obtain another certificate required for the file;
  6. Submit the complete file to the prefecture, attach all the documents and wait to be summoned by the mining department. The mining engineer performs several checks, then declares the vehicle compliant with a report. This report is itself transmitted to the Prefecture;
  7. Apply for a vehicle registration certificate for the approved vehicle.

Conclusions

As you can see, although difficult, if you go through different ways it is possible to finance a Skoolie. As a final piece of advice, when negotiating a bank loan, consider the amount of the monthly payment or instalment. If you want, you can use this monthly spending plan worksheet as a guide.

The only appropriate time to consider taking on additional debt is when you spend less than you earn. The extra burden of debt you decide to take on shouldn’t affect how much you set out to save for emergencies or other overriding life goals or priorities. 

If you have more questions or comments about the content, please let us know.

FAQ on Can you finance a Skoolie?

Is a Skoolie considered an RV?

Yes, A Skoolie is considered an RV. They have become popular recently and are nothing more than converted school buses. They are spacious and offer plenty of room to decorate and furnish as you may please. 

How long does it take to build a Skoolie?

Building a Skoolie can take anywhere from a few months to a few years, depending on your level of training, the time you have, whether you will have help or not, and of course, your resources.

Is it important to get pre-approved for financing before I start buying?

Pre-approval gives you the confidence to negotiate with a seller or private broker knowing you have a pre-approved limit.

How can interest rates vary from lender to lender?

Interest rates can vary widely. A rate of 5.99% for a specialized secured trailer loan for new utilities and those less than six years old could be increased to 12.95% by an unsecured bank loan for the same vehicle, or to 17.95% by a non-bank lender for a personal loan.

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