Loan for an RV (Recreational Vehicles) comes in several folds for financing the purchase of a new or old recreational vehicle, motorhome, travel trailer or camper. Many might compare an RV to an auto loan but the two are different as one has a long term and comes with high purchase.
Certain banks, online lenders, and credit unions offer both secured and unsecured RV loans to their clients. With secured RV loans are backed up collateral, subsequently your vehicle is enough for that. Unsecured RV loans comes at a high risk and for such matter, most lenders do not offer them.
Depending on the loan type and lender, RV loan terms varies but it usually takes between 6-20 years.
Factors that determines RV financing terms and interest rate
- The type of loan (secured or unsecured)
- Credit score
- Total cost of financing recreational vehicle
How RV loan works
As every loan, RV loan requires borrowers to apply either online or visit any of their offices. Lenders review your loan application and send you back their terms if they are interested.
Reviews are based of certain criteria of which credit score is very important, aside other factors. Note that a good credit score above 600 will earn you a low interest rate. Although bad credit borrowers can obtain loans for RV financing, there is possibility of having a high interest rate.
You can get this form of loan from either an RV dealership or financial institutions like banks, credit union and online lenders. Dealership RV loans comes with certain benefits that most borrowers can capture on. Thus, they get to provide you different financing option to suit you with flexible terms.
On the other hand, RV loans from financial institutions can help you determine how much you can get to finance your RV based on your credit and other factors. You can apply and get pre-approved before visit a dealership.
When you apply for an RV loan, you are always expected to make a downpayment which stands between 10% and 20%. Thus making initial payment for the RV.
Interest rate varies based on the lender and loan type but the current rate starts from 4.29 based on a good credit score.
How to apply for loan for an RV
To successfully apply and get approval for an RV loan, borrowers should consider the following factors.
1. Set your budget
Based on your financial strength, make a list of available RV you can afford, compare and choose the best among them. Also, you can decide on the purpose of the RV you want to purchase.
2. Check your credit score
Most importantly, a good credit will surely earn you a good and low rate. As a vital factor to borrowers of RV loans, they must take into consideration their credit score if they want a good loan amount with low rate. Have a fair to good credit score of 600 and above.
3. Prepare your downpayment
Since RV loans require a downpayment between 10% and 20% of the car price at the dealership, borrowers can start working towards that if they know their budget and their credit score worthiness.
4. Look for a lender
Determine whether to finance your RV through a dealership or financial institution. Compare their terms and decide on the best. One interesting factor is that RV dealerships provide you with several financing options to choose from.
5. Agree on the best terms
When you submit an RV loan request to lenders, they review based on their criteria and get back to you. At the point where you have several lenders interested in servicing you, review, negotiate and agree on the best terms.
List of some lender that offer loans for an RV
Here is a compiled list of RV loan lenders in the US. It’s a mixture of Banks, credit union and online lenders.
- Bank of West
- Alliant Credit Union
- First Tech Federal Credit Union
- U.S. Bank
- SunTrust Banks (Truist Bank)
- Southeast Financial
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