A recreational vehicle (RV) loan can help you finance this large purchase, which may run you anywhere from a few thousand dollars to over $400,000, depending on the type of RV you purchase.
Fortunately, you have many RV loan options, including online lenders, banks, credit unions, and dealers.
RV loans can be specifically designed for purchasing new or used RVs, or they can be personal loans that you can use to finance an RV. The RV itself secures some RV loans, while others are unsecured and don’t require collateral.
Before taking out a personal loan, find out if the lender will allow you to use the funds for this purpose and if you can get a high enough loan amount. Many personal loans have a maximum loan amount of $100,000 or less.
Since many RVs are considered luxury vehicles, the funding process is usually more complex than it is with traditional personal loans. In addition, repayment terms can be longer and often range from one to 20 years.
To get approved for an RV loan, you’ll likely need good to excellent credit, meaning a FICO score of 670 or higher. This is particularly true if you hope to lock in a high borrowing amount and a low-interest rate with favorable terms.
Related: Learn more about getting a personal loan on Credible.com
RV loans are installment loans and work a lot like car loans. You borrow money from a lender and agree to pay it back, plus interest (and potentially fees), over a set period of time.
Depending on the lender, you may need a down payment of 10% to 20% of the RV price. Your RV may also serve as collateral. If you don’t repay your loan according to its terms, the lender may seize your RV to recoup its losses.
There are a number of places you can turn to for an RV loan, including:
If you’re interested in an RV loan, follow these steps:
Related: Learn more about getting a personal loan on Credible.com
While eligibility requirements vary from lender to lender, many of them look for the following:
Before you move forward with an RV loan, it’s a good idea to consider the benefits and drawbacks.
RV loan terms depend on the lender you choose and your specific financial situation. Most repayment terms range up to 15 or 20 years. Remember that while a longer term means lower monthly payments, it’ll also cost you more in interest over the life of the loan.
Some lenders will let you apply for an RV loan with a cosigner or co-applicant. While a cosigner agrees to repay the loan if you can’t, a co-applicant applies for the loan with you and is typically equally responsible for it. This is great news if you don’t have the best credit. But if you go this route, ensure that you can make all your payments and repay your loan as agreed. Otherwise, your cosigner will have to take over and repay what you borrowed.
If you decide that an RV loan isn’t right for you, you might want to explore these alternatives: