How Do RV Loans and Financing Work? 

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The price tag on new RVs can be intimidating especially when RV prices can soar well into the hundreds of thousands. But don’t let that deter you. We financed our Class A RV so we hope to share some of what we learned in the process.

RV financing is a common practice among potential RV owners to help them manage the cost of their new home-on-wheels. It involves lending institutions, interest rates, and monthly payments, much like financing a house or a car. 

However, lending institutions offer customized financing options to suit the specific needs of recreational vehicles. The process might seem overwhelming but fear not. 

This guide demystifies RV financing, breaking it down through dealer financing and exploring other viable options. 

We provide the information needed to make an informed decision that aligns with your lifestyle and financial capabilities.

Can You Finance RVs?

Yes, you can finance RVs. Financing is a widely used method for purchasing an RV.

Because of the high cost of RVs, many people turn to financing to make their purchase more manageable. Financing applies not only to high-end models but also to more affordable ones.

Dealerships often provide financing options, but they’re not the only source. Banks, credit unions, specialized RV lenders, and other financial institutions offer loans tailored for RV purchases.

One great option is to use a home equity loan to finance your RV. This is a great way to secure some of the lowest rates possible.

Whether you’re buying a luxury motorhome or a budget-friendly camper, there’s a financing solution to suit your needs.

How Does RV Financing Work?

How does RV financing work?

RV financing operates on a principle similar to auto financing. When you finance an RV, you take out a loan to purchase the vehicle. You then repay the loan over a specified period with interest. 

The repayment period can vary widely depending on the lender and the amount borrowed, but it typically ranges from a few years to as long as ten years for a new RV.

One key aspect of RV financing is that the RV itself often serves as collateral for the loan. These types of loans may be considered personal loans or unsecured loans. If you cannot make payments, the lender can repossess the RV.

It’s also important to note that different lenders have different rates and requirements for down payments. Some may offer lower interest rates but require a larger down payment, while others may have higher rates but more flexible down payment options.

Before finalizing with a specific lender, comparing offers and shopping around is crucial to finding the best RV loan terms with competitive rates.

The loan process and loan approval are fairly quick. It actually takes more time to gather all of your important financial documents and fill out the loan application than it does for the lender to perform a hard credit check and approve your loan. ( and yes there will be application fees)

Will Your Bank Give You A Loan To Buy An RV?

Yes, many banks will offer you a loan to buy an RV. However, the type of loan you receive and the conditions attached to it may vary between different financial institutions.

Banks often treat RV loans like auto loans, allowing you to finance your RV purchase over an extended period with regular monthly payments.

The terms of these loans can range from a few years to over a decade, depending on the cost of the RV and your ability to repay the loan.

Sometimes, you can secure a personal loan or line of credit from your bank to fund your RV purchase. These loans provide more flexibility in how you use the funds but may come with higher interest rates and shorter repayment periods than traditional vehicle loans.

Interest rates for RV loans can vary widely based on various factors, including your credit score, loan amount, and loan term. 

Getting an RV loan typically requires a down payment, usually between 10 and 20 percent. Some lenders may also require RV inspections, which can add additional costs to the purchasing process.

What Are The Interest Rates On RV Financing?

What Are The Interest Rates On RV loans?

Interest rates on RV financing can vary widely based on a range of factors, including your credit score, the loan term, the type of RV, and whether it’s new or used.

In general, newer model years will receive lower rates and a longer loan term. But newer RVs have a higher price and larger loans may receive a slightly higher interest rate. It’s hard to beat the finance companies.

As of September 2023, current average RV loan rates range from 4.49 percent to 11.89 percent for borrowers with excellent credit.

However, you might expect higher rates if your credit is less than stellar.

The type of RV can also impact the interest rate. For instance, rates for new campers range from 5.24%-9.74%, while used RVs have slightly higher rates, ranging from 6.49%-10.24%.

If you’re considering RV financing, comparing rates from different lenders, including your bank and the dealership, is essential. Most banks have online loan calculators that will give you an idea of what you’ll be paying.

Should You Finance An RV?

Deciding whether to finance an RV is a personal decision that depends mainly on your financial situation and lifestyle. 

If you can afford to purchase an RV outright, this can save you from paying interest over the long term. However, financing may be the only workable way to afford an RV for many people.

Before deciding to finance an RV, shopping around for the best rates is crucial. Different lenders offer different terms and conditions, so comparing offers can help you find the most favorable deal.

Being realistic about what RV you can afford is important. 

While financing a brand-new or luxury model might be tempting, these options can be significantly more expensive. Choosing a less expensive model or a used RV could save you thousands of dollars.

Beware of financing deals that seem too good to be true, such as zero down payments or extended loan terms. These offers can sometimes lead to paying more than the RV is worth due to accumulated interest.

Do You Need A Down Payment To Buy An RV?

Do You Need A Down Payment?

In most cases, when you plan to buy an RV and finance it, lenders require a down payment. This initial payment typically ranges from 10% to 20% of the RV’s purchase price.

However, some lenders may offer zero-down financing options. These programs allow you to finance the entire purchase price of the RV, requiring no money upfront. 

While this might sound attractive, it’s crucial to understand such deals could lead to higher monthly payments and more interest paid over the life of the loan.

A larger down payment often results in a better interest rate and lower monthly payments. 

By reducing the amount you need to borrow, a substantial down payment can decrease the lender’s risk, which may cause a lower interest rate. 

The less the financed price, the less overall interest you pay.

Is Now A Good Time To Buy An RV?

Whether now is a good time to buy an RV depends on various factors, including market conditions, your circumstances, and the specific type of RV you are interested in.

As for the current market scenario, there are varying opinions. Some sources suggest the RV lifestyle may experience a downturn in 2023, which might not be the best time to buy.

However, other sources argue better deals are becoming available with price correcting, making it a potentially good time to purchase an RV.

We often recommend buying an RV during the off-season, typically around late fall or early winter, as dealerships may offer special promotions or discounts.

This is usually the time of year when dealerships may offer special promotions or discounts to clear their inventory before the new year’s models arrive. 

It’s also worth noting while some fear a “bubble” in the used RV market that could plummet prices, others believe the market will remain a solid seller’s market.

If you do decide to buy your dream RV, you’ll also want to look at RV warranties to protect your purchase.

4 FAQs About RV Financing

FAQs About RV Financing

Understanding RV financing can often be confusing, particularly for first-time buyers. 

Here, we clarify four common RV financing questions to make the process easier. 

1. Can you finance RVs if you have bad credit?

Yes, you can finance an RV with mediocre credit. If you have bad credit you will have a tough time finding an RV loan.

Financing arrangements for RVs are typically available through dealerships, banks, credit unions, and online lenders and they will do their best to find you a loan.

This may sound weird, but you may actually have an easier time finding an RV loan if you intend to live in your rig full-time. Why? Because the lender knows your RV is your home. Therefore, the lender assumes you will be less likely to default because you would have nowhere to live.

One of the best dealerships in the country for finding a loan if you are considering the full time RV lifestyle is RV Depot in Texas. They privately fund full-time RV loans for folks with less-than-perfect credit. This means you don’t need a minimum credit score to get a loan.

We have lots of folks who email us about financing with poor credit, and RV Depot has one of the best financing options available. They are a family business with years of experience selling and financing drivable motorhomes like class A and class c motorhomes. They also sell towable trailers like travel trailers, fifth wheels, and destination trailers.

Some other good RV Loan lenders to consider are My Financing USA, Southeast Financial Credit Union, Truist Bank, and the Good Sam Finance Center.

I would recommend contacting several RV loan lenders to find the best RV loans. And loan terms are just as important as lower rates. A longer loan term, a higher maximum loan amount, and fewer fees are all important, too.

2. How high are interest rates on RV financing?

Interest rates on RV financing can vary significantly based on several factors, including your creditworthiness, the loan term, and the type of RV you plan to purchase.

As of September 2023, the best RV loan rates for RV loans range from as low as 4.25% to as high as 19.95%. Obviously, your interest rate is lower if you have a good credit score.

The current average RV loan rate ranges from around 4.54% to 11.94% for borrowers with excellent credit or a good credit score.

However, you might face higher interest rates with a lower credit score.

For instance, LendingTree mentions that Annual Percentage Rates (APRs) can range between 6.99% and 19.95%, with loans from $10,000 to $10,000,000.

It’s essential to shop around and compare rates from different lenders before deciding on the best option.

3. Can the bank or dealer take your RV?

Yes, the bank or dealer can take your RV if you cannot make your loan payments on time. This process is known as repossession.

When you finance an RV with a loan, the lender (whether it’s a bank, credit union, or dealership) typically holds the title of the RV until you fully pay off the loan.

If you default on your payments, the lender has the legal right to repossess the RV to recoup their loss. The terms and conditions of repossession vary depending on your loan agreement.

Some agreements may allow repossession after just one missed payment, while others may require multiple missed payments before repossession proceedings begin.

It’s essential to understand the terms of your loan agreement and make regular payments to avoid repossession.

4. What fees and taxes will I pay when financing an RV?

There are some fees and taxes to be aware of when financing a new RV. Since these fees differ by state and RV loan lenders we will just list them out for you.

Some fees and taxes to be aware of are sales tax, origination fees, loan application fees, and advertising fees. You can negotiate any fees, so it’s a good idea to try to ask for these fees to be waived or partially waived.

Final Thoughts About RV Financing

RV financing can be an exciting avenue to owning your dream recreational vehicle. 

It offers the convenience of spreading the cost over time, making it more affordable for many individuals. However, it’s not a decision to be taken lightly. Like any financial commitment, it’s crucial to approach it with careful consideration and planning.

When considering RV financing, paying attention to the loan details, such as the interest rates, down payment, and loan terms, is crucial. Interest rates vary significantly depending on various factors, so shopping for the best rate is essential.  

While RV financing can make owning an RV more accessible, you must understand and prepare for the financial commitment. 

With careful planning and consideration, you can embark on your RV adventures without the stress of financial worries.


Related Reading:

Motorhome Leasing vs. Buying: Which Is Best?
12 Questions To Ask When Buying A New Camper
How Does RV Consignment Really Work?
How To Buy A Used RV From A Private Seller In Or Out Of State


About the Author:

Mike Scarpignato is an avid RVer and outdoorsman. He travels with his wife Susan in their Class A 2021 Thor Challenger and their Class C 2008 Gulf Stream Conquest. Mike is the owner of RVBlogger.com, TravelTrailerPro.com, MotorhomeFAQs.com, the RVBlogger YouTube Channel, and the private Facebook group called RV Camping for Newbies.

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