Buying an RV is a big decision. It can take weeks or months to find the perfect RV and the perfect RV financing option. However, knowing where to look for good RV financing can help you weed out the bad options and speed up the process. But before you jump into RV loan shopping, it’s best to understand exactly what you’re getting into and know what all of your options are.
- 1 Check Multiple Finance Companies
- 2 Consider Depreciation
- 3 Negotiate the Best Price at the Dealer
- 4 Consider the Cost
- 5 New vs Used
- 6 Making Money with Your RV
- 7 Price can Determine Loan Options
- 8 Check Your Credit Score
- 9 Downpayments
- 10 Types of Financing
- 11 1. RV loans
- 12 2. Personal loans
- 13 3. Home equity loans
- 14 8 of the Best RV Financing Companies Worth Trying
- 15 1. Bank of America
- 16 2. Good Sam RV Loans
- 17 3. Wells Fargo Home Mortgage
- 18 4. Lending Tree
- 19 5. Suntrust Bank
- 20 6. No Credit Campers
- 21 7. Wells Fargo RV loans
- 22 8. Your local credit union
- 23 The Best RV Financing Option for You
Check Multiple Finance Companies
Don’t say yes to the first offer that comes your way until you’ve made sure it’s the best offer available. Many dealers will help you find financing or offer in-house financing. However, it’s best to do your own research to know all of the options you have available. This could literally save you thousands upon thousands of dollars. As we’ll talk about later on, there are websites which will allow you to quickly and easily compare several RV loan options.
RVs can have a similar price tag to a decent sized home. However, they don’t hold their value quite like home. In fact, they depreciate similar to a car. You should consider this when picking out a loan. You don’t want your RV to be worth less than you owe on it. For instance, if in two years your loan is down to $43,000 and your RV is only worth $32,000, this would be considered being upside down on your loan.
If you were to want to sell your RV at this point or trade up for a different RV (family expansion, not enough room, want to try another type, etc.), you would have to pay off the difference of $11,000. This can really restrict your options.
Negotiate the Best Price at the Dealer
Ignore the MSRP or sticker price. RVs are listed at outrageous prices to get you to pay more. When you see the sticker price, you tend to negotiate closer to that number. It makes the salesperson’s first offer seem better than it really is, and your offers will tend to be higher than they should be.
If you can’t get the dealer to budge, don’t feel like you should take their offer. You have the power in this situation. Shop around at other dealers until you get the deal you’re looking for. If a dealer really wants your business, they’ll give you a good deal.
It’s not uncommon for an RV to be marked up $20k-30k over what they can sell it for and still profit. RV prices are often inflated by 30%-35%, and most dealers expect you to haggle the price down—though they aren’t going to budge easily. It’ll take some persistence.
Consider the Cost
Most new RVers consider only the cost of the monthly payments when budgeting for their first RV. However, there are many other costs to consider which add up quickly. With enough bad luck or poor planning, this can put you behind on payments or even end in repossession if you’re not careful.
New RVs are known to have maintenance issues right off the bat. After all, an RV can have thousands of components, and some of them are likely to be faulty or installed incorrectly. New RVs have to be taken on a shakedown trip soon after they drive off the lot. The goal of a shakedown trip is to find all of the problems with the RV by rigorously testing every component. This way you can have the dealer fix any issues (if you have a warranty). Even after the shakedown trip, your new RV will likely spend a lot of time in the shop during the first year.
One upside with used RVs is that the kinks have been worked out by the previous owner. That way the money has already been put into it and you don’t have to fork over extra cash for repairs. Plus, you don’t have to worry about canceling your vacation because your RV is in the shop.
General maintenance and supplies also add to your monthly RV costs. For motorhomes, you can expect 7-10 MPG—which can add up very quickly. Moreover, you have propane gas fill-ups, oil changes, chassis greasing, and many other regular maintenance items that will increase the monthly costs.
Insurance is another expense that some don’t consider right away. RV insurance premiums can vary drastically from state to state and based on your driving history. With minimum coverage on older RVs, you may only pay a couple hundred dollars every year. However, new RVs with full coverage can drive those rates way up. Be sure to get a quote from multiple insurance companies for the RV you have your eye on. This will give you a good idea of how much to add to your RV budget.
If the RV payments, insurance, and maintenance costs max out your budget, consider other options. You want to have a bit of padding in your budget to take care of unexpected expenses. If you don’t have any room in your budget, consider looking at more inexpensive RV options or seek out a longer loan term to lower your monthly payments.
New vs Used
While on the topic of used RVs, it’s important to note that both new and used RVs have their benefits. New RVs are appealing since they have never been used before. You won’t have to worry about wear and tear, stains, or funky smells that take weeks to clear. But, new comes at a cost—and a big one. Used RVs can cost significantly less than new RVs and, if the RV has been taken care of, you won’t have to sacrifice the quality of camping.
Even an RV that is only a couple years old can be thousands less than a brand new one. New RVs tend to lose a sizeable chunk of their value the moment you drive off of the lot—and even more after the first couple of years. Keep this in mind when choosing an RV.
In most cases, buying a new or used RV is not an investment. Both new and used RVs depreciate in value every year. You can see this best by looking at an old RV from the 90s. An RV that once cost tens of thousands of dollars is now listed on craigslist for a few grand. If you plan on securing a 20-year loan, know that the RV will be worth practically nothing by the time it is paid off unless you pay it off very early.
Making Money with Your RV
Although buying an RV is seldom an investment—meaning you’re not going to make money off of it or even break even on the purchase price—there are exceptions. You may be able to rent out your RV to help cover the monthly payments. While this won’t work for full-timers, if you only use your RV for weekend getaways or for heading south to avoid cold weather, then you can rent out your RV while you’re not using it. If done in just the right conditions, you may even be able to cover the monthly payment and make a profit—maybe even enough to pay it off early.
Price can Determine Loan Options
The price of the RV will determine the finance options you have available. For instance, even with perfect credit, you will have a difficult time finding an RV-specific loan for a small amount such as $5,000. In fact, it’s easier to find an RV loan for $200,000 than it is to find an RV loan for $5,000. If you plan on buying an older used RV with an inexpensive price tag, your options may be restricted to paying cash outright.
Check Your Credit Score
Before you begin loan shopping, it’s essential to check your credit score. Don’t assume your credit score is good just because you’ve paid everything on time. Many factors can affect your scores such as the number of accounts open and the amount of time since you opened those accounts. You may even find a fraudulent activity which can negatively impact your score; it’s not uncommon for someone to fraudulently open an account with your name on it and rack up a bill.
Your score will largely determine the options you have available. You don’t want to apply for a loan which requires a high credit score if your score is at or below average. Not only will you waste your time, but the more times that your credit score is requested by financial institutions, the lower your credit score will be—in turn making it more difficult to find good RV financing. Of course, you want to shop around and find the best loan possible. You just want to make sure the options are viable first.
Unless you get lucky with a promotional offer, you will likely have to put a down payment on your new RV. Save up enough for at least a 10%-15% down payment, though 20% may be the better option. The larger the down payment, the more likely you will be able to drive down the interest rate.
Make sure you have the down payment ready for when it’s time to purchase your RV. In some cases, you can put the down payment on a credit card. However, it’s recommended that you pay it off as soon as possible since credit cards typically have much higher interest rates.
Types of Financing
There are three common ways that you might finance your RV. Each will have it’s own benefits and drawbacks. Let’s take a look at them.
1. RV loans
An RV loan is similar to a car loan. Like a car loan, an RV loan is secure. This means your RV is collateral if you happen to default on the loan. This is both a good and bad thing. Secure loans typically have better interest rates than unsecured loans.
This is because the bank takes on less risk since they can auction your RV to cover what you owe on the loan. However, this puts you at risk for losing your RV if financial hardship strikes.
- Lower interest rates
- Long-term financing
- Doesn’t always require good credit
- Possibility of losing RV in case of financial trouble
- Bad credit can skyrocket interest rates
- High minimum loan amounts
2. Personal loans
A personal loan is a loan of a fixed amount given to you in a lump sum. These tend to have high-interest rates compared to other types of loans. This is large because they are not secure. This means that in the case of a default, your RV is not collateral.
Personal loans can be used on anything, not just RVs. However, they are often for a much smaller amount of money because, without collateral, they are a higher risk to the financing company. Personal loans should always be paid off as quickly as possible as the interest rates can be extremely high—comparable to a credit card.
- Instant funds
- No collateral
- May work with low credit
- Smaller loan amounts
- High-interest rates
- Shorter repayment periods
3. Home equity loans
If your home is valued over the amount of the mortgage on it, you may be eligible for a home equity loan. Home equity loans can help you gain access to a large sum of money for purchases—including RVs. However, this is a secured form of loan in which your home is the collateral.
This is both a good and bad thing. On the one hand, if you don’t have the best credit score, you can still likely find a good home equity loan for financing your RV. This is because the bank has essentially no risk because of the value of your home. On the other hand, if you were to hit financial hardship and not be able to pay back the loan, your home would be at risk for foreclosure. You may also have the possibility of a longer repayment period. This can help make an RV more affordable by lowering the monthly payments.
Overall, home equity loans can be a great option because they often have much lower interest rates than other loans. Just be sure your budget can handle the extra monthly expenses, so you don’t end up in a bad financial situation.
- Easy to get with bad credit
- Low-interest rates
- Long-term loans
- Possibility of foreclosure
- Requires a home with plenty of equity
8 of the Best RV Financing Companies Worth Trying
Bank of America may be one of the best companies worth trying for RV financing. Many RVers report good interest rates, easy loan processes, and great customer support. There seem to be very few RVers who haven’t enjoyed their experience with Bank of America’s services.
- Potential for large loan amounts
- Low-interest rates
- Great customer support
- Requires good credit
- No RV-specific loan options
- Little information online about RV loans
Unlike Bank of America, there are some mixed reviews about Good Sam RV Loans. Some RVers report a great experience with low-interest rates, while others say they would never go back. However, since Good Sam specializes in RV loans, it’s worth giving this RV financing company a try.
- RV-specific company
- Finance up to $2,000,000
- RV loans in all 50 states
- Mixed reviews
- Requires a credit score of 690 or higher
- Can require a large down payment
See Some Good Sam Comparisons here:
If you are an eligible homeowner with little, no, or bad credit, a Wells Fargo home equity loan may help you get the RV of your dreams. Since home equity loans don’t require down payments or a substantial credit rating, this is a perfect option for those who aren’t able to secure a standard RV or auto loan.
Keep in mind that home equity loans do come with some risk because your home is put up as collateral in case of a default. Those with good credit may want to consider a home equity loan as well since they may offer substantially lower interest rates.
- Works with bad or no credit
- Low interest rates
- Fast application process
- Only works with homes worth more than the amount owed
- The small risk with your home being collateral in case of a default
- Limited on loan amount
Lending Tree doesn’t actually offer RV financing directly. Instead, this internet-based company helps you find the best possible financing options by comparing lenders. You can apply online and have lenders compete for your business. They also offer a wide variety of loan application options—home equity loans, RV/auto loans, and personal loans. This allows you to explore all of your options before making a final decision.
- Options for good, average, and bad credit
- Wide variety of loan types
- Compare options side-by-side
- Doesn’t compare all lenders (think, local banks and credit unions)
- Requires a lot of personal information
- Can be a long application process
Suntrust has not one, but two RV-specific loan options: Motorhome and RV Loan and LightStream RV Loan. For those with average to good credit, their Motorhome and RV Loan may be a great choice—especially for those who already have an account with Suntrust. If you’ve got excellent credit, their LightSteam RV Loan option may offer you exceptional interest rates.
- Low interest RV-specific loans
- A well-trusted US bank
- Finance up to $1,500,000
- LighStream RV Loans don’t require collateral
- Requires good or excellent credit
- Minimum loan amount of 55,801
- Limited options for towable campers
6. No Credit Campers
Similar to Lending Tree, No Credit Campers allow you to compare your options. However, they specialize in RV loans for those with no credit or bad credit. This may be a great option for those who want to finance a travel trailer on the less expensive side since their financing offers are limited to $35,000.
- No collateral
- Bad credit options
- Compare rates
- Higher interest rates
- Only personal loan options
- Low loan amounts
Yes, we mentioned Wells Fargo once before. However, this is a different type of Wells Fargo loan. While we talked about Wells Fargo’s home equity loans, this is an RV-specific financing option. There have been mixed reviews on this loan option as well among both new and experienced RVers. Some RVers have reported very low-interest rates and great customer service.
- Funds can arrive in as little as 1-2 days
- Low interest options
- Trusted US bank
- Requires good credit
- Mixed reviews
- May require an in-person application
8. Your local credit union
If none of these options help you find the loan you’re looking for, you may have luck if you talk with your local credit union. Many RVers have found that smaller credit unions offer the absolute best rates on RV loans—and often without having the best credit score.
Often times, local credit unions are willing to work with you to put together the perfect RV financing package. Of course, every credit union will be different so it may take some time and energy to find the right one.
- Relaxed lending requirements (sometimes)
- May not need good credit
- Possibility of low-interest rates
- Typically don’t have online applications
- Time-consuming to shop around
- Limited to the options around your area
The Best RV Financing Option for You
These financing options should give you a solid start on your mission to find the best RV financing company for you. As you seek out RV financing, keep in mind the points mentioned in the article. This is a big commitment, so be sure you’re prepared to take it on. If you don’t need RV financing, it’s not a bad idea to pay outright for your RV. This can save you a lot of stress in the long-term.
*As a parting note, always check the fine print when shopping for an RV loan.