App version: 0.1.0

Guide to Getting a Personal Loan for a Mobile Home

Can You Use a Personal Loan for a Mobile Home?
Jason Steele
Jason SteeleUpdated March 15, 2023
Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Mobile homes are fairly common these days, and they’re typically less expensive than buying a traditional house. However, securing financing to buy a mobile home can be difficult. For instance, you often can’t use a regular mortgage to purchase a mobile home.Fortunately, personal loans are an option you can turn to instead. If you’ve been wondering, can you buy a mobile home with a personal loan?, the answer is yes. Read on for more information about using a personal loan for a mobile home.

The Cost of Buying a Mobile Home

Mobile homes, also sometimes called manufactured homes, are usually built in a factory and then transported to their destination. Mobile homes are available at a variety of price points, but they’re typically much cheaper than traditional homes. The average price of a mobile home in late 2021 was $111,900, according to the U.S. Census Bureau. By comparison, the average price of a traditional home is about $407,700, the National Association of Realtors says. Mobile homes are less expensive because the materials to make them are procured in bulk and the homes are produced on an assembly line at a central location. However, owning a mobile home typically comes with other fees. For example, unless you own the land your mobile home is on, you’ll have to pay a monthly rental fee for the lot. You may also have to buy mobile home insurance, which functions like traditional homeowners insurance to protect you in case of fire, natural disaster, or theft. 

One Financing Option: A Personal Loan for a Mobile Home 

When it comes to funding the cost of a mobile home, one option you can use is a personal loan. One of the benefits of personal loans is that they’re available in many different amounts, ranging from several hundred dollars to more than $100,000. A large personal loan could help you finance a mobile home. The way personal loans work is that a bank, online lender, or credit union lends you a lump sum that you repay with interest in installments over time. The higher your credit score, the lower the interest rate you may get. Once you’re approved for a personal loan, you may expect to receive funds quickly, typically within one to five days. 

Pros of Using a Personal Loan for a Mobile Home

Before you apply for a personal loan for a mobile home, it’s wise to weigh the pros and cons. Some of the advantages of personal loans include:

Less Expensive

Personal loans typically have fewer fees than some other sources of financing, like mortgages. With a personal loan for a mobile home, there are no closing costs or appraisal fees. 

Land Ownership Isn’t Required

Unlike some other financing options for mobile homes, personal loans don’t require you to own the land the mobile home is on. Nor do they require the home to be installed on a permanent foundation. 

Faster Approval Process

When you apply for a personal loan, the approval process can be fairly quick. You’ll need to provide certain information, like your name, income, and Social Security number, as well as  documents that offer proof of income and employment, like pay stubs. Once you’re approved, you can typically get the funds within a few days.

No Collateral Required

You can choose an unsecured personal loan, which doesn’t require you to put up collateral. That means the lender can’t foreclose on your mobile home if you default on the loan.

Cons of Using a Personal Loan for a Mobile Home

Before taking out a personal loan to buy a mobile home, you should also consider the drawbacks. 

Loan Terms

The term, or length of time you have to repay a personal loan, is typically about two to five years. This is much shorter than the repayment term for a mortgage, which can be several decades long. This means that you’ll have less time to pay off your personal loan, which could make your monthly payments higher.

Interest Rates

Unsecured personal loans can have higher interest rates than secured loans because there is no collateral for the lender to seize if you default on the loan. Because the lender is taking on more risk by lending to you with an unsecured personal loan, they will generally charge more in interest. You’ll also likely have to meet a minimum income and credit score to be approved for a personal loan. Some lenders do offer a personal loan for low income, but this type of loan may have a higher interest rate.Recommended: 6 Ways to Avoid Home Improvement Fraud

Does It Make Sense to Use a Personal Loan for a Mobile Home?

Personal loans can be used for almost any purpose, including financing a mobile home or even as loans for home improvement. This flexibility means that purchasing a mobile home with a personal loan could make sense for you. However, if your manufactured home qualifies as real property — meaning it sits on a foundation, has no wheels, and you own the land under it — you may be better off with other financing options. If your mobile home meets the definition of real property, you can apply for a home loan with some conventional mortgage programs, like Fannie Mae or Freddie Mac, or agency-backed mortgage programs, such as those from the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs, or the U.S. Department of Agriculture. Another financing option you could explore for a mobile home is a chattel loan. This is a type of personal property loan that can be used for movable property, such as when the mobile home is located in a manufactured home community and you rent the property the mobile is on. The loan does not include the land, so the closing process is easier and less expensive than it is with a conventional mortgage loan. However, chattel loans are typically for smaller amounts of money than mortgages are, and they have shorter repayment terms. That means the interest rates on chattel loans are generally higher, which could result in higher monthly loan payments. 

Getting a Personal Loan for a Mobile Home

If you’ve decided a personal loan is the right choice for your mobile home purchase, there are several steps in the process. Here’s what to do.

1. Compare Lenders

When shopping for a personal loan for a mobile home, you should compare lenders to see what rates and terms they might offer. You can explore options from banks and credit unions, as well as those from online lenders. When choosing an online lender, beware of any red flags that signal the lender might not be reputable. Watch out for things like unrealistic promises, discrepancies in the loan terms and conditions, and requests for upfront application fees. Recommended: What Is a Community Bank?

2. Apply Online

Once you find a lender, you can apply for a personal loan. Applying online is often the fastest and easiest method. As you get started, be aware that there are a number of personal loan requirements you’ll need to meet. For instance, you’ll have to fill out an application and  provide a few documents, such as proof of income, employment, and identity. Gather these documents beforehand and have them ready.

3. Receive Funds

Once you’re approved for a personal loan, you’ll receive the funds in a lump sum, usually within several days. Some lenders even offer same-day funding. You’ll then repay the money you borrowed with interest over time in monthly installments. 

The Takeaway

Mobile homes may be challenging to finance, but personal loans could be a good option for getting the funds you need for the purchase. Just be sure to consider the pros and cons of a personal loan first, and make sure you can afford to repay the loan in the specified time frame. When you’re ready to explore personal loan options, Lantern can help. By filling out one simple form, you’ll get offers from multiple lenders at once, making it easy to compare them. That way, you can quickly and conveniently find the personal loan option with the best rates and terms for your needs.

Frequently Asked Questions

How can you get a personal loan for a mobile home?
Is using a personal loan for a mobile home a good idea?
Can you buy a mobile home with a personal loan?
Photo credit: iStock/Marje

About the Author

Jason Steele

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
Share this article: