Are you dreaming of hitting the open road with a home on wheels? With the help of recreational vehicle (RV) financing, you can bring that dream to life sooner rather than later. But how do RV loans work, where can you get one, and will you qualify? Here’s what you need to know.
What is an RV loan?
An RV loan is an installment loan that covers the cost of a recreational vehicle. Similar to an auto or personal loan, you repay the loan amount (plus interest and fees) through monthly payments over a set term. You can find RV loans from a variety of companies, including banks, credit unions, RV dealers, and online lenders.
How do RV loans work?
The cost of a new RV ranges from around $14,000 to well over $750,000 — a large amount to pay out of pocket. RV loans provide you with a lump sum of funds upfront so you can purchase your RV of choice. You then repay the amount through installment payments over a set term, such as 10 to 15 years.
RV loan costs
RV loans have an annual percentage rate (APR), which accounts for the loan’s interest and upfront fees, and indicates the percentage of the balance you’ll pay in borrowing costs each year.
For example, if you request a $50,000 RV loan with a 10-year term, and the loan has a 10% APR, you’d be looking at a total of $29,290 in interest charges over the life of the loan with a $661 monthly payment.
Keep in mind, you may need to pay fees for state tax, title, registration, Uniform Commercial Code filing, and loan processing.
Related: Personal Loan Term Length
Tip:
Plug an RV loan amount, term, and APR into our personal loan calculator to see your estimated monthly payment amount and total loan cost.
Learn More: APR vs. Interest Rate
Down payments and collateral requirements
Beyond the basics, the way an RV loan works varies depending on the lender and loan type you choose. For example:
- Down payments: Some lenders require down payments on RVs, while others offer 100% financing. A down payment can reduce your loan amount and borrowing costs, but requires you to pay more upfront.
- Collateral: Lenders might require you to use the RV as collateral for the loan. If you opt for a secured loan, you may be able to get a lower APR and higher loan amount, but the loan origination process can take longer and your RV can be repossessed if you fail to make payments.
Where to get an RV loan
You can find RV financing from a variety of organizations. Here’s what you should know about each.
Banks
You may be able to get an RV loan from certain traditional banks. However, many of the largest banks either don’t offer RV loans or don’t provide them directly to consumers.
For example, Chase doesn’t provide RV loans at all, while U.S. Bank and Bank of America only offer RV financing through their networks of RV dealers. You may have better luck with smaller community banks.
Check Out: Best Banks for Personal Loans
Credit unions
RV loans are more common among credit unions. They often have competitive loan offerings and flexible eligibility requirements. Many credit unions operate on a regional basis and require members to meet certain requirements to become members. However, credit unions have become more accessible thanks to online banking.
Check Out: Best Credit Unions for Personal Loans
Online lenders
Another option is online lenders. Many online financial service organizations offer RV loans and/or personal loans that can be used to purchase an RV. In most cases, you can apply online and get an approval decision within a few minutes. While often unsecured, some lenders also offer secured options.
A perk of going this route is the sheer amount of online lenders in the market. You can prequalify with several lenders without hurting your credit score, and compare rate estimates side by side to find the best deal. Just note that prequalification is not an offer of credit, and your score may temporarily drop when you formally apply for a loan.
