RV loans: Where, when and who should apply?

RV loans: Where, when and who should apply?
June 04, 2024 | Alliant Credit Union

If you plan to purchase a recreational vehicle (RV), you will need a loan if you don't have the cash to pay in full when buying. RVs can cost upward of $1 million, so many potential buyers will need to look for financing. Doing research on available RV loans is essential to get the best rate and terms for you. So, let’s learn all about RV loans.

Basics of RV loans

Not all RV loans are created equal. Each lender offering an RV loan has specific criteria and terms that may differ significantly from other lenders. Looking for a competitive interest rate when shopping around is only a small part of the process. Lenders may offer loans for smaller purchases that you repay over a few years, but you can also find loans that rival a mortgage payment with loan terms of approximately 20 years.

Unsurprisingly, the more you plan to borrow, the stricter the requirements may be. Lenders will often require you to have a down payment, typically between 10% and 20%. Many lenders also require used RVs to undergo an RV inspection, which can cost several hundred dollars. Lenders that offer RV loans without a significant down payment might have higher interest rates and less-favorable terms.

RV loans could have strict terms regarding your use of the vehicle. For example, some lenders will not allow you to live in the RV part time or full time. The lender might only offer RV loans designed for recreational users. As such, these lenders may not finance park model RVs. Park model RVs require electricity hookups, and you must tow them to a seasonal RV park for occasional use.

Be sure to check the approval process timeline. Some lenders offer same-day funding, while other lenders can take weeks to give you a decision.

Where to apply for an RV loan

Not all lenders offer RV loan financing, but you can find RV loans from traditional lenders to online-only financial institutions. Credit unions such as Alliant are an excellent place to start. One benefit of applying for an RV loan before shopping for your RV is that you can be preapproved. No one wants to go in and find the recreational vehicle of their dreams only to find out afterward they can't qualify for financing. You can limit your shopping to RVs within your loan approval amount by having a preapproved loan.

Another option is to apply for financing through the RV dealer. RV dealers may offer in-house financing or loans through various partners. This option could provide you with some negotiating power if you intend to purchase one vehicle. You might be able to get the dealer to lower the purchase price or the APR. However, be advised that some RV dealerships may have higher interest rates and fees than you would find with a credit union or another lender that offers RV loans.

When to apply for an RV loan

If you are in the market for an RV, look at an RV loan calculator to help you understand what your monthly payments could be. Then, start saving up for a down payment. Putting more money down on an RV will decrease the amount you need to borrow, which can be significant with a purchase as large as an RV. Plus, the additional down payment might help you qualify for an RV loan with better terms.

Be sure to check your credit report before applying. If there is an inaccuracy on the report or other things you need to address, handle them before applying for RV loan financing. Remember, an RV can be a big financial investment. You want your credit to be in the best condition it can be. Paying down some outstanding accounts to improve your debt-to-income ratio can help you secure a more attractive interest rate.

It's also beneficial to research insurance rates before buying an RV. You might opt to purchase a smaller RV once you find out the ongoing maintenance costs and insurance premiums.

Who should get an RV loan?

Many families who enjoy the RV lifestyle think about owning one. if you plan to take a few weekend road trips or live in your RV part time or full time, purchasing an RV makes sense. If you want to own an RV but don’t have the cash to pay for all of it now, an RV loan may help make your open road dreams a reality.

As with any major purchase, there are several guidelines to follow to make sure you’re able to afford your RV before committing to a purchase:

  • Ensure you have a fully-funded emergency fund of at least six months’ living expenses. An RV is a luxury purchase, so building your savings should come first.
  • Create a budget that has your estimated RV payments included. For added confidence, take your estimated RV payment and put it away in a high-yield savings account every month to test how realistic your budget is.
  • Consider how your RV payments will impact other financial goals. If you’re saving for a down payment on a home or retirement, the RV loan shouldn’t get in the way of those.

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.


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