Personal Loans

What are your RV loan options?

By
Anna Baluch,
edited by
Kelly Larsen
Updated June 27, 2023, 4:33 p.m. ET
Woman sits outside her RV after financing it with a loan
Shutterstock

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.

Fortuna🌊tely, you have many RV loan options, including online lenders, banks, credit unions, and dealers. 

What is an RV loan?

RV loans can be specifically designed for purchasing ne✨w 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 o♉ut 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.

How do RV loans work?

RV loans are installment loans and work a lot like car loans. You borrow money from a lender andꩵ 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. 

Where can you get an RV loan?

There are a number of places you can tu🦹r🌠n to for an RV loan, including:

  • Online lenders: If you choose an online lender, you can apply for an RV loan and get your funds without ever leaving your home. An online loan is typically the quickest way to fund an RV purchase. You can often get a personal loan funded within one business day.
  • Banks: Some traditional banks offer RV loans. If you already have an account with a certain bank, you might land a rate discount if you take out an RV loan with them.
  • Credit unions: Compared to banks, credit unions tend to have lower rates and fees, since they’re not-for-profit financial institutions. If you’re a member of one, you might want to explore its RV loan options.
  • Dealer financing: You may be able to secure financing directly through a dealer or via a partnership they have with a lender. A dealer may allow you to negotiate the price of the RV or interest rate.

How to get an RV loan

☂If you’re interested in an RV loan, fol🅠low these steps:

  • Determine your budget. Before you look for an RV or RV loan, look at the numbers and your budget to understand what you can afford. This can help you avoid overspending and defaulting on your loan. 
  • Save for a down payment. Most RV loans require down payments of 10% to 20%. The more money you can put down, the lower your monthly payments will be. Plus, you might qualify for a lower rate and better terms.
  • Review your credit: You can get a free weekly copy of your credit report from each of the three major credit bureaus via through the end of 2023. Dispute any errors or inaccuracies since these can take a toll on your credit and interfere with your ability to lock in an affordable RV loan.
  • Shop around. Not all RV loans are created equal. Shop around and compare your options with various types of lenders so you can find the right RV loan for your unique situation. Once you narrow it down, get pre-approved to get an idea of the terms you qualify for.
  • Apply for the loan. Depending on the lender, you can apply online or in person. Be prepared to share your income and employment history. You might also need to submit documents like a government-issued ID or your pay stubs.
  • Get your funds. Upon approval, you’ll sign a loan agreement. The lender will either release the funds to you or send them directly to the RV dealer.

RV loan eligibility requirements

While eligibility requirements🌜 vary from lender to lender, many of them look for the following:

  • Good to excellent credit: Most lenders want borrowers with a solid credit score. Some are more lenient, however, and may be willing to lend to you even if you have fair or poor credit. Just remember that you won’t qualify for the lowest rates with a lower credit score.
  • Steady income: Lenders want to know that you’ll be able to repay what you borrow. That’s why they’ll often ask you to prove your income in the form of pay stubs or tax documents.
  • Collateral: Depending on the lender, you might need to back your loan with the RV itself. This reduces lender risk and can help you qualify for a larger loan amount or potentially a lower interest rate. 

What are the pros and cons of an RV loan?

Before you mov𝓡e forward with an RV loan, it’s a go♏od idea to consider the benefits and drawbacks.

Pros

  • Can finance a new or used RV: Most lenders will let you take out an RV loan for either a new or used RV. This can make the process of shopping for an RV easier.
  • Many loan options available: RV loans are available through banks, credit unions, online lenders, and dealers. You should be able to find the ideal option for your particular budget and needs.
  • Longer repayment terms: Compared to other types of loans, RV loans come with lengthy repayment terms of 15 or even 20 years. You can take your time repaying your loan.

Cons

  • May need to use the RV as collateral: Just like auto loans, many RV loans are tied to the RV itself. If you fail to make your monthly payments, the lender may repossess the RV.
  • Good credit is often required: Lenders usually prefer borrowers with good to excellent credit. If you have a lower credit score, you might find it difficult to get approved for an RV loan.
  • Down payment may be necessary: Depending on the lender, you may need to come up with a down payment of 10% to 20% of the RV’s purchase price. This may be a challenge, especially if the RV is expensive. 

What are standard RV loan terms?

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 mo🌼nthly paym𒁃ents, it’ll also cost you more in interest over the life of the loan. 

Can you have a cosigner on an RV loan?

Some lenders will let you apply for an RV loan with a cosigner or co-applicant. Wꩵhile 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. 

RV loan alternatives 

If you decide that an RV loan isn’t right for you, yo🐻u might want to explore these alternatives:

  • Personal loans: You can opt for a traditional personal loan, instead of a loan that’s specifically geared toward RV purchases. Some lenders offer loans of up to $100,000, which may be enough to cover your RV.
  • Home equity loans: If you have equity in your home, you may want to consider a home equity loan. This is a second mortgage, and your home serves as collateral. You’ll receive a lump sum of money based on the equity you have — you can generally borrow up to 80% of the equity in your home. 
  • Credit cards: A credit card may be a viable option if you only need to borrow a small amount of money to fund your RV. You might be able to earn cash back or travel points, depending on the card you use. However, you may not always be able to use a credit card for this purpose, and there’s a risk of getting trapped in a cycle of debt if you can’t repay what you borrow on time.