RV loan refinancing: Everything you need to know

Refinancing a major asset like an RV can help you get a more competitive interest rate and free up some monthly funds. If your financial situation has changed since you secured your loan, it's always wise to look into RV refinancing options. This will help you make sure that you're getting the best deal available.

What happens when you refinance an RV?

Refinancing an RV loan is similar to refinancing a home or auto loan. An RV loan refinance pays off your existing loan and gives you new financing. This resets the loan and may potentially offer a new interest rate, fees and other terms. In most cases, refinancing gives you more time to pay off the RV. 

Even if you refinance with very similar terms, you'll find that the loan starts over when you secure refinancing. For example, if you originally purchased your RV with a 10-year loan and refinance five years in with a second 10-year loan, you'll ultimately have 15 years in which you're paying off the RV. 

When should I get an RV loan refinanced?

There are two primary reasons to consider refinancing an RV loan:

• To lower the monthly payments
• To get better terms, such as a lower interest rate, on the loan

If you initially financed your RV with a high interest rate loan, it's never a bad idea to explore the possibility of refinancing. Economic factors may become more favorable for loans with low interest rates. Your own financial situation can make it easier to secure a better loan as well. If your credit score or income has increased since you initially took out the loan, you're more likely to get favorable RV loan refinance terms that weren't available to you when you took out your first RV loan.

Refinancing an RV loan can also help you secure lower payments. Whether you're struggling to keep up with your RV payments or you simply want to free up more money for other monthly purchases, refinancing can serve you well. In most instances, your RV loan refinance will result in lower payments each month. For many people, this may make a drastic difference in their day-to-day lifestyle. Look for a loan that does not have a penalty for early repayment so you can make larger payments now or in the future if it's comfortable.

When should I not refinance an RV loan?

In some instances, it's not a good idea to refinance your RV loan, even if you can. You should avoid loans that will ultimately make you pay more for your RV than you will if you don't refinance. Look out for refinancing fees, loan fees, and potential penalty charges. Compare the difference in interest rate with the total cost of these fees to make sure you're still coming out ahead. If you can't secure a significantly lower interest rate, the fees may amount to more than you're saving.

Who can handle an RV refinancing?

Shop around to compare rates, so you know you’re getting the best RV rate deal. You'll find a variety of banks and credit unions willing to offer RV financing. Take the time to compare a variety of loans so you can get the best terms for your needs.

Can I refinance my RV as a primary residence?

In many cases, you can refinance your RV as your primary residence. This is an option for individuals who do not have any other primary residence and who do, in fact, live in their RV the majority of the time. The RV must have a functioning kitchen, toilet facilities, and sleeping quarters. Refinancing an RV as a primary residence may allow you to claim certain tax deductions, such as homeowner's tax. Alternately, you may choose to claim your RV as business headquarters or a home office. A tax professional can help you decide which route is best financially.*

What do I need to refinance an RV?

When evaluating you for a loan, the lender will consider factors like:

• Your credit history
• Your monthly or annual income
• Your employment history
• Your debt-to-income ratio
• Your fixed expenses, such as a mortgage
• Available collateral for the loan, such as another vehicle or home
• Liquid assets like stocks and bonds

You may need to get an inspection to verify the condition of your RV. Ask your lender if they have a recommended inspector that they work with. If not, you can often have this service done at an RV supplier.

How do I choose the best lender?

Carefully evaluate your budget to determine what you can afford to pay for your RV loan. Look for a loan refinance option that keeps your monthly payments within this range while still offering a term that's shorter than the RV's expected life span. If you can hit this careful balance, you'll know that you've found the best RV loan for your situation.

Make your open road dreams a reality with a great RV loan

A great rate on an RV loan from Alliant will ensure you can spend more of your money on memorable weekend adventures.

Want to learn more about securing the right loan for your RV? Read these articles:

• How much does a camper cost and how to get an RV loan
• How to finance an RV and get out on the open road

* While the information provided is based on our understanding of current tax laws, and has been gathered from sources believed to be reliable, it cannot be guaranteed. Federal tax laws are complex and subject to change. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.