Personal Loans

How To Finance An RV

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 6 minute read

An RV loan can ease the financial burden of purchasing an RV, which is a substantial investment. For those looking for funding, here’s what you should know. More than 25 million people go RVing each year, according to the Recreational Vehicle Industry Association. An RV can take you wherever you want to go, whether it’s for a family holiday or a single adventure.

However, purchasing an RV is a significant financial commitment. If you don’t have enough money saved up to buy an RV outright, you may need to seek a loan. Finding a reliable lender and understanding your options for an RV loan should be easy now that you’ve read our guide.

RV Loans: The Basics

Your recreational vehicle purchase might cost you tens of thousands of dollars or more, depending on the model you choose. According to the RVIA’s 2017 survey of lenders, the average loan amount for a new RV was $45,368 and the borrowers provided a 13.4% down payment.

You may be eligible for a secured or an unsecured loan, depending on how you plan to pay for your RV. As long as you have an excellent credit rating, unsecured loans can be taken out without a credit check. The lender’s risk is minimized if you default on a secured loan by providing additional assurance or “collateral” to the lender. In some cases, RVs can be used as collateral for loans. You might lose your RV if you don’t pay your loan on time, since the lender could take it to recuperate their losses.

When you apply for an RV loan, your interest rate will be determined by your credit score, just like it is for other consumer loans like a car or a house. Because RVs are considered a “luxury” item, they often have a higher interest rate than other types of vehicles. Your debt-to-income ratio and the RV’s age and worth are also important considerations when applying for an RV loan.

Thus, those in the market for an RV loan now have several alternative possibilities from which to pick. There are several factors to consider when deciding which financing option is ideal for you.

For an RV loan, these are the finest possibilities

Banks

Wells Fargo and U.S. Bank are two of the most common banks that offer RV financing for new and used RVs. Despite the fact that bank lenders may advertise competitive interest rates for these loans, these prices are often reserved for individuals with a solid credit score. Candidates with a credit score over 690, for example, maybe preferred by some financial institutions. For RV loans, maturities might range from 48 months to 20 years, depending on the bank you choose to work with.

Banks may have a harder time financing an older or lower-value RV than a newer one that has a greater market value. When you take out an RV loan, banks want to make sure that the RV you’ll be using as collateral is worth enough money to pay their fees in the event that you default on the loan.

Getting an RV loan from a bank may be a good option if you’ve already shown creditworthiness and have a high credit score to back it up. There are a few things you’ll need to do before applying for a loan like this. Information like your SSN, the specifics of any prospective collateral, documentation of your earnings, and a list of your current debts are all examples of this.

A bank loan is ideal for those who need extra cash: Many RV loan applicants, especially those who require money to buy a high-end RV, and those with good credit.

Credit unions

Because they are not-for-profit financial organizations owned by their members, credit unions are able to provide their customers with affordable borrowing choices. You’ll need to join a credit union before you can get a loan for an RV (or shareholder). Credit unions have different criteria for membership, with some need you to live in a specified location and others requiring you to work for a specific firm or sector. Many of these organizations, on the other hand, are quite easy to join.

In most cases, you may join a credit union by depositing a certain amount of money into a checking or savings account. A $5 deposit can be made into share savings account at some credit unions, for example, to become a stakeholder of the institution.

You may be able to get better interest rates than you would with a typical bank after you join. For those searching for the lowest monthly payment feasible, some credit unions provide financing for up to 20 years, much like a bank lender. There are several credit unions in your region, and whether or not you’re currently a member of one, it’s always a good idea to check whether you’re eligible for membership and see what their RV loan possibilities are. 

Comparing rates and terms amongst credit unions can help you locate the best RV loan, just as it can with regular banks. Who can benefit from a credit union loan: Members of a local or national credit union who match the qualifying conditions and are searching for better rates of return.

Online lenders

Online lenders can also be used to obtain an RV loan. If you need money for a significant purchase, such as a recreational vehicle, you may get it through online lenders.

Personal Loan Pro and LendingTree make it simple to compare a wide range of personal loan products online. These loan marketplaces present you with precise information from a wide range of partner lenders so that you may choose the best personal loan for your financial needs. First, you’ll need to fill out a form with your name, address, and other personal information. Using this information, the site will do a mild credit check and present you with a list of personal loan options.

While some internet lenders provide personal loans that are secured, the majority of them only offer unsecured ones. An unsecured loan has the advantage that your RV can’t be seized if you default. Personal loans, on the other hand, often have higher APRs.

Who can benefit from an online lender: If you’re a tech-savvy borrower who likes to compare many offers in one sitting, an online lender marketplace could be right for you. Keep in mind that the mentioned interest rates are only for people with excellent credit.

Full-time RVers have another option: The Good Sam

There are financing alternatives available via Bank of the West for Good Sam members who want to use their RVs on a regular basis or perhaps live on the road full time.

If you’re in the market for a new or used recreational vehicle, Good Sam has a variety of financing alternatives. Borrowing quantities range from $10,000 to $250,000 and interest rates are based on your loan period and the amount of money you’re borrowing. If you want to get a loan for a recreational vehicle, it must be no older than the model year 2008. Your RV is used as security for the loan, therefore this is to be expected.

Good Sam offers specific financing rates based on how you intend to use your recreational vehicle. Borrowers who plan to live in their RVs full-time, for example, maybe eligible for discounted rates through Good Sam. Individuals who are wanting to get a loan for an RV that satisfies the minimal standards for a loan or those who plan to live in their RV full-time are suitable candidates for Good Sam.

Bottom Line

An RV dealer can assist you secure financing through a credit union or bank if convenience is your primary concern while looking for an RV loan. You may, of course, contact any bank or credit union to see what they have to offer you on your own. Doing this in advance might help you determine the pricing range of RVs you should be looking at.

To that end, if you’re planning on financing your RV with a personal loan, it’s a good idea to research around for the best rates and terms before going RV shopping. Find out in a matter of minutes whether or not you’ve been pre-approved for an RV loan by an internet lender, and in what amount.

The cost of RV ownership should be taken into account when deciding on financing for an RV. You’ll also have to pay for your RV’s license, insurance, and registration fees. If you want to finance these charges, you’ll need to factor them into your monthly budget or the RV loan amount itself. Taking out an RV loan is a huge financial obligation, but with the appropriate information, it may be a useful financial instrument to move one step closer to an exciting and adventurous road trip!

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