RV loans provide the money to purchase a recreational van. You have to pay back the money according to specific terms with some interest. But getting an RV loan is not so easy. You need a solid financial plan to be qualified for the loan including steady job, down payment, and credit score over 700.
How To Get An RV Loan?
Getting an RV loan is not so simple. You have to be qualified to get the RV loan with the best interest rate from a bank. For that, you also need to prepare an organized plan and application.
- Make a Budget
First, you have to make an elaborated budget for your recreational vehicle. It should include everything from the down payment to the monthly installment you will pay for the RV.
Start with the size and age of your RV. Are you going to buy a small RV? Is it going to be new or previously used? Once you decide on these things, think about the features you want in your mobile home. If it is going to be your main home, you must furnish it well. Make a budget for all of these things.
When you have decided on the type and features of your RV, search for vehicles that fulfil your requirements. The RVs you are looking up should be within your budget. Moreover, you should be sure that you can maintain the RV in the future. Keep searching for RVs that match your current financial status.
You should also plan a budget for the down payment, monthly installments with interest, fuel cost, and RV insurance. Borrowers are given a time frame to pay the loan. So, the budget must be well planned. For example, A 5-year loan means paying a high amount per month with low interest, and a ten years loan means low payments with high interest.
- Choose a Type of RV Loan
Now that you have a rough idea about your financial plan, you have to decide on a type of loan. Think carefully about both secured and unsecured loans.
With unsecured loans, you will get financial backup faster. You do not have to pledge your RV as collateral; hence, it will not be repossessed by the lender if you fail to pay the installment on time.
It will be helpful for people who use an RV as their main home. But unsecured loans are hard to get approved. It is often rejected by lenders. Besides, lenders charge a high-interest rate for this type of loan.
Secured loans are for people who want a loan at low interest for a long time. It is also easier to get a secured loan compared to unsecured loans because your lender will prefer to guarantee that they will get the money back. However, the approval for a secured loan may take longer than an unsecured loan.
- Select an RV Loan Lender
Either you can decide on a loan type and then select a lender, or you can see what different lenders are offering and then choose a loan plan. It is totally up to your choice. As I have mentioned before, you can take loans from various places. It can be a bank, an online bank, your RV dealership, or a personal loan.
Before you choose a lender, you should see which one offers the best for you. By choosing the right lender, it is possible to save thousands of dollars!
Some people prefer to finance their RVs with the dealers. They will take care of all the paperwork. So, you do not have to spend time looking for a bank and applying for a loan. Make sure the dealers are transparent and showing you the actual interest rate because it can be is too high.
But people who are ready to take matters into their own hands can contact banks for a low rate of RV finance and save a good amount of money. Then again, you should choose a bank according to your plans, like the time frame and interest rate. Once you get a loan, the bank will send the money to the dealers.
- Check Credit Score
Getting an RV loan from the lenders depends a great deal on your credit score. Banks are often reluctant to give loans to people who do not have a high credit score (mid-700 or higher). The score is the indication that you can pay the money according to the terms. Furthermore, a good credit card can also ensure a low-interest rate.
Therefore, you have to smartly handle your credit card. Before you apply for a loan, check your credit score. Try to improve the score to 700 to higher as it will increase the possibility of getting a loan. A score of 800+ will get you the best rate. Make sure to pay all the bills regularly and clear all the dues.
However, a bad credit score does not mean that you can never get RV finance support from any bank. Many lenders are willing to lend loans even if you have a bad credit score. But for these loans, you can be charged with a high interest rate.
- Having a Down Payment
Usually, RV companies will ask you to pay 10% to 20% as a down payment for the RV. So, when you select an RV, find out how much you have to pay as a down payment. Try to save a good amount of money to pay for the RV to get more advantages.
Furthermore, paying a large amount of down payment will qualify you to get a low-interest rate starting from 4.29 percent per month. Also, having a large down payment can help you to cover your bad credit score. A large payment means you have to have a low interest rate and less money to pay for the RV. Thus, the overall cost of the loan also decreases.
- Negotiate
Do extensive research on RV prices and RV companies that are offering deals on buying RV from their company. The sticker prices you see on the RVs are not the exact prices. So, do not hesitate to haggle with the RV dealers.
If you have good negotiation skills, you can save 10% to 30% from the price tag of the RV. For that, you should have plenty of ideas about the current price of recreational vehicles. You should ask the dealers about extra facilities like free maintenance and upgrades for your new RV.
Your negotiation skills will come in handy when you are deciding on a time frame and interest rate for the RV loan. You may ask the lender to adjust their plans according to your budget and plans. Many RV loan lenders consider these requests.
What Are the Best RV Loan Companies?
One thing you must understand is that not all banks lend money to finance your RV. Although there are many banks that offer loans for RV, they have strict rules and requirements.
To make the search easy for you, we have selected five RV loans lenders. You can check these lenders to find the best RV loan. These lenders are selected based on finance amount, interest rate, and permissible RV use.
What is An RV Loan?
The loan you take from a loan company or bank to finance buying a new or used recreational van like a mobile home, camper, or trailer is known as an RV loan.
An RV can cost you $10,000 to one million dollars which is a lot of money. It is nearly as expensive as buying a small home.
Fortunately, there are RV loan lenders who offer secure financial support to people who want to own RVs. You can also take financial support from banks, online lenders, and credit card unions. Moreover, some RV companies also provide loans when you buy an RV from the company.
How Does RV Loan work?
After selecting an RV loan support, you have to submit an application for the loan. The lender will approve your application if you fit their requirements. Then, you have to sign a contract with the company where you have to agree on the terms or time of payment, the annual loan interest, and the use of the RV.
You can pay a partial amount of the RV right away and the rest on interest over a long period of time. There is also the Zero-Down payment system where you do not have to pay any money during the purchase and pay all of the money over time. But not so many lenders offer this option.
RV Loan Terms
RVs cost a lot. Thus, you will be taking a lot of money from the lenders. Obviously, they understand it will take a long time to pay the money with interest. The lenders consider a few facts before setting the terms for payment.
Typically, you will get 120 months or 10 years to pay back the loan with interest. However, expensive and luxurious campers can have 240 months or 20 years. This is the biggest difference between RV loans and automobile loans.
Automobile loans offer loans for only 12 to 84 months. Again, you can pay for an RV loan at a similar time frame if you are financially confident about paying in such a short time.
Interest Rate
If you have a good credit score, you will get a low interest rate for taking a loan to buy an RV. For a high credit card score holder, the interest rate starts from 4% in many companies. The interest rate also depends on the type of RV you are buoying.
On the other hand, if you do not have a high credit score or FICO score, the interest rate will be higher. Before you apply for an RV loan, make sure your credit card has a high score. So, if you want to borrow money on low interest, you have to work hard to improve your credit card score.
Moreover, your credit score will also influence the interest rate you are going to pay. The lender will discuss the instalments and interest money with you to set an affordable monthly and yearly payment based on your credit score.
A Secured Loan
Most of the RV loans are secured loans, meaning the borrowers have to pledge any asset or some of their assets to the lenders. In the case of an RV loan, the RV itself is the collateral.
If a borrower fails to pay the monthly installment, the lender will take away the recreational van as the payment. Some RV loan lenders offer unsecured loans. They are ready to finance your RV without any assets as collateral, but this type of loan is difficult to get if you have a poor credit score. Moreover, the loan interest is high.
On the contrary, secure loans are easier to get, and it has a low-interest charge. The RV loan Dealers also offer more financial support if you choose a secured loan.
Where Can You Get An RV Loan?
To get the best RV finance, you have to do a little bit of research on the lender. You can take the support of the RV dealership, but sometimes it can be costly. You will see various types of RV loan lenders these days. Find out which of them offers the best interest rate and discounts.
Here are some options that you can consider:
RV Dealership
The easiest and fastest option is the RV dealership. The companies of recreational vehicles or vacation home wheels often give financial support to the customers. You do not have to apply to do extra paperwork for any other institute. However, the interest rates are high, and you may have to pay some charges for the service of the RV Company.
Banks
If you want a better rate, you should check the bank where you have an account or credit card. As you will directly deal with the bank, you can get a lower interest rate.
But it will take some time for the application to get approved. It depends on your credit score and the amount of loan. Besides, you have to agree with most of the terms set by the band.
Personal Loan
It is not always possible to get loans from a bank. You may not have a good credit score; hence the banks will not finance your RV. In this case, you can take a personal loan.
You should keep in mind that personal loans have a much higher interest rate, and you will not have long terms to pay the loan. Again, if you take unsecured personal loans, it becomes very risky and expensive.
- LightStream
Can’t wait to get in your RV? Then you should get a loan from LightStream. LightStream offers the quickest RV finance, and you will get your funding just the day you applied for the loan. It provides $10,000 to $100,000, and the interest rate is 4.29% to 12.39%. However, the repayment term is limited only to 24 to 84 months.
LightStream also has various programs that can save some more money. It is the best RV loan lender for small vehicles and affordable recreational vehicles. But it is not limited to specific RVs. Moreover, the bank gives unsecured loans, which means there is no need for any collateral. Thus, you do not have to give any papers of your RV as a guarantee.
- Max Loan Amount: $5,000 to $100,000
- Credit Score: Good to Excellent credit score
- Loan Term: 2 to 7 years
- Interest Rate (APR): 4.29% to 12.39%
- Permissible RV: Both recreational and full-time
- RV Age: No limits
- Loan Approval Speed: Same Day approval available
Pros
- No collateral
- Same-day approval
- No extra charges for prepayment
Cons
- Very short term for repayment
- Limited finance
- Alliant
Established in 1935, Alliant is one of the best RV loaners in the current market. The company offers $300,000 as an RV loan to the borrowers. The interest rate low and refinance loans are also available. You can get same-day funding if you fulfil their conditions.
Alliant does not show the minimum credit score requirement, but it can be guessed they prefer a high score. Many people like Alliant because it offers loans for both old and new RVs. Besides, it supports both recreational and full-time recreational vehicles.
However, to get a loan from this bank, you have to become a member. You just have to become a part of their business or charity work to get the membership. Therefore, those who were not members in the past will get the loan after they get a membership.
- Max Loan Amount: Up to $300,000
- Credit Score: Excellent credit score
- Loan Term: 10 years to 20 years
- Interest Rate (APR): From 4.24% to 5.24%
- Permissible RV: Both recreational and full-time
- RV Age: Up to 15 years old.
- Loan Approval Speed: Same Day approval available
Pros
- Low-rate interest
- Loans for recreational and full-time RVs
- Different loan terms
- Refinancing
- Same-day founding
Cons
- Limited information on credit card score requirement
- Only lends to borrowers with membership
- Bank of the West
Do you want to purchase a luxurious recreational vehicle at low interest? Then, Bank of the West is the perfect RV loan render for you. You must have a 700 or above credit score to apply for a loan from this bank. If your application is approved, you will get from $10,000 to $2 million for buying your dream RV. Plus, you only have to give 4.29% to 9.99% interest.
Typically, big loan providers offer loans for only full-time luxurious RVs. But the Bank of the West is different. It approves both part-time and full-time RVs. You can choose between 4 to 20 years to pay back the loan. You should know that the down payment requirement is 10% to 30%If you face financial difficulties, you can add a co-signer.
- Max Loan Amount: $10,000 to $2 million
- Credit Score: 700 or above credit score
- Loan Term: 4 years to 20 years
- Interest Rate (APR): From 4.29% to 9.99%
- Permissible RV: Both recreational and full-time
- RV Age: No older than 2009 model
- Loan Approval Speed: 1-2 days
Pros
- Huge amount of financial support
- Available in 50 states
- 4 to 20 years to pay the loan
- RV loan for Non-American Citizens
- Interest rate starting from 3.59%
Cons
- No option for pre-approval
- High credit score
- Loan fees
- Does not provide support for par RV models
- Depends on collateral
- South East Financial
What if you do not have a high score credit card? Does it mean your dreams of traveling around the county on your own RV will never come true? No, you can still afford your recreational vehicle. South East Financial will help you with its Credit Challenge Program.
Even if the borrower has only a 550-credit score, they can apply for an RV loan through the credit challenge program. The bank also considers past bankruptcies if they are paid. All you need to have is a stable income of $20,000 to $30,000. There is also no penalty for paying early loans.
The bank will provide up to $75,000 for 5 to 15 years on a 4.29% starting interest rate. The South East Bank finances only part-time RVs. So, if you are looking for loans for motorhomes and park in model RVs, the loan is not for you.
- Max Loan Amount: Up to $75,000
- Credit Score: low credit score
- Loan Term: 5 to 15 years
- Interest Rate (APR): Starting from 4.29%
- Permissible RV: Only for part-time RVs
- RV Age: Up to 15 years old.
- Loan Approval Speed: 24 hours
Pros
- Best for bad credit score holders (only 550)
- Ignores bankrupts (approved after due is paid)
- Low-income borrowers are allowed to apply
- Low-Interest Rate
Cons
- Not for full-time and park in RVs
- The maximum loan is only $75,000
- Requires positive loan history
- Good Sam Club
Now, are you looking for an RV Finance provider specializing in full-time RVs and offers a great discount? Then, you should know about Good Sam Club. It has amazing offers like insurance, warranty plans, roadside assistance, etc. for you. It provides a good amount of financial support for full-time motorhome. The range is between $10,000 to $2 million.
However, you must have a high credit score of 700 and above. The higher your credit score, the lower your interest rate that is 4.39% to 9.99%. As you will get a huge loan, you will get a long time to repay the loan. You can extend the time up to 20 years.
- Max Loan Amount: $10,000 to $2 million
- Credit Score: Excellent credit score (700+)
- Loan Term: Up to 20 years
- Interest Rate (APR): From 4.39% to 9.99%
- Permissible RV: Only for full-time RVs
- RV Age: Not Older than 2010 models
- Loan Approval Speed: 1-2 days
Pros
- Provides great finance support
- Great discounts and benefits
- Same interest rates for old and new RVs
- Low-interest rate
Cons
- High credit score
- Not for vehicles older than 2010
- Only for fulltime RVs
How Much Does RV Loan Cost?
It is really hard to tell exactly how much it will cost you to get a loan for your recreational vehicle. It depends on the interest rate and the years you are spending on the RV.
If you can secure a low-interest rate RV loan and manage to pay in 5 to 10 years, then the cost is comparatively low. But loans at a high rate and too many years will definitely cost a lot of money.
For example, you are going to buy an RV worth $50,000 at a 6.5% interest rate. Suppose you have managed to pay $10,000 as a down payment. Now, you have to pay back the $40,000 in 10 years. So, the total interest will be $14,000, and in 20 years, it will be $31,500. Therefore, it is important to get an RV loan at the lowest interest rate possible.
Moreover, some lenders charge a good amount of fees on loans. So, you have to be prepared to spend a good amount of money on the RV.
Make sure to get RV insurance for your new RV. Most of the lenders want to see proof of insurance. So, manage insurance that can cover your lender’s demands. Insurance can strengthen your application for getting a loan for RV. Lenders speed up the approval process if they see the borrower has the strong financial support to pay the loan in the future.
An RV loan can be costly in the long run, but it is also a great support to buy a recreational vehicle. It is not possible for many people to buy an RV without any financial help. So, the RV loan is a great initiative to let people have an adventure on their own trailers and campers.
