Purchasing an RV is an exciting prospect, but with prices ranging from $10,000 to over $500,000, it’s a significant financial commitment that often requires financing.
For many buyers, securing an RV loan is a practical step toward achieving the dream of road trips, adventures, and a mobile lifestyle. Whether you’re a first-time buyer or an RV enthusiast looking to upgrade to a newer model, understanding how to get an RV loan and navigate the process is crucial.
At Rec Loans 360, our goal is to simplify the RV financing process by connecting our clients with nationwide lenders who can meet their financial needs.
This guide is designed to start at the beginning and help you through the steps of obtaining an RV loan. You can view reading this as the first informed decision that helps align you with your budget and goals.
By understanding the steps and options available, you’ll be better equipped to secure the best loan terms and hit the road with confidence.
What to Know Before Applying for RV Financing
Before applying for an RV loan, one of the most important steps you can take is checking your credit score. Most RV lenders require a credit score of at least 670 to qualify for an RV loan, and a higher score can make a significant difference when securing a lower interest rate. Even a small reduction in your interest rate can save you thousands of dollars over the life of the loan, making it worthwhile to take the time to understand your credit standing before submitting your application.
A proactive approach to improving your credit score can pay off in the long run. Start by checking your credit report through free services like AnnualCreditReport.com to identify any inaccuracies or areas for improvement.
Paying off existing debts and keeping your credit utilization low can boost your score, increasing your chances of securing favorable loan terms. By taking these steps in advance, you can improve your financial profile and position yourself for a smoother loan approval process.
Understand Your RV Loan Price Range
When considering an RV loan, it’s essential to understand your price range, as RV costs can vary significantly depending on whether you’re buying new or used, the RV class, and any custom features.
For instance, a Class A motorhome, known for its size and luxury, can range from $60,000 to over $500,000, while a more compact Class B van might start at $40,000 and go up to $150,000. Meanwhile, Class C models typically fall in between, offering affordable prices ranging from $50,000 to $150,000. These differences in cost highlight the importance of selecting an RV that fits both your lifestyle and your budget.
To help you get started, it’s crucial to estimate how much you’ll need to borrow. Consider the price of the RV, the potential interest rate, and the loan term to get a clear picture of your monthly payments and overall cost. Choosing an RV model within your budget will make the loan process smoother and help ensure you’re financially comfortable with your purchase in the long run.
Save for a Down Payment
Saving for a down payment is a crucial step in the process of securing an RV loan. Most lenders typically require a down payment of 10-30% of the RV’s purchase price, though some may offer loans without this requirement. However, making a substantial down payment can work to your advantage by reducing the overall amount you need to borrow, potentially lowering your monthly payments and making loan approval easier.
For instance, on a $100,000 RV, a 20% down payment of $20,000 would leave you with an $80,000 loan, reducing the interest you’d pay over the life of the loan.
While it might be tempting to opt for a smaller or no down payment, aiming for a higher one can save you more in the long run. A larger down payment lowers your principal balance and reduces the interest accrued, meaning you’ll pay less over the life of the loan. By planning ahead and saving as much as possible, you’ll put yourself in a better financial position and ultimately enjoy your RV with more peace of mind.
How to Get an RV Loan: Step-By-Step
Step 1: Prequalify With Multiple RV Lenders
Prequalifying with multiple lenders is a smart first step in the RV loan process, allowing you to explore your financing options without impacting your credit score. Prequalification gives you a clear understanding of the loan amounts, interest rates, and terms that may be available to you based on your financial profile. By comparing offers from various sources, such as banks, credit unions, and RV-specific lenders, you can identify the most competitive rates and choose the loan that best suits your needs.
To make the process easier, consider using an online comparison tool to gather prequalification offers, toggle with an RV loan calculator, or meet directly with us to find out where your needs lie.
Prequalification helps you gain a broader perspective on available financing options before you begin shopping for your RV, ensuring that you find a loan that fits your budget and provides the best possible terms for your purchase.
Step 2: Complete the Loan Application
Completing the loan application is a critical step in securing financing for your RV, and being prepared can make the process much smoother.
The application typically requires basic personal and financial information, including income verification, credit history, and personal identification. Lenders will ask for your full name, date of birth, and Social Security number, along with proof of income like pay stubs, tax returns, or W-2 forms. Additionally, you’ll need to provide your employer’s contact information and proof of identity and address, such as a driver’s license and utility bill.
Gathering this documentation in advance streamlines the application process. Having everything ready before you start will save time and reduce the chances of delays or missed opportunities as you work toward securing your RV loan. Proper preparation ensures a smoother approval process and helps you get one step closer to owning your dream RV.
Step 3: Sign the Loan Agreement
Once your RV loan is approved, the next step is signing the loan agreement, but it’s essential to carefully review the document before putting pen to paper. Key elements to look for include the interest rate, loan term, payment schedule, and any potential hidden fees or penalties. Make sure you understand how much you’ll be paying each month, how long your repayment period is, and what the total cost of the loan will be over time. Reading the fine print is crucial to avoid any surprises down the road.
Before signing, don’t hesitate to negotiate with the lender if necessary. You might be able to adjust the terms to suit your financial situation better. Important questions include whether there are penalties for early repayment, if flexible repayment options are available, and how changes to your payment schedule might impact the loan.
By taking the time to fully understand the terms, you can sign with confidence and enjoy your new RV knowing you’ve made a sound financial decision.
RV Loan Requirements: What Lenders Consider
When applying for an RV loan, lenders evaluate several key factors to determine your eligibility and the terms of your loan. Understanding these requirements can help you prepare and increase your chances of securing the best possible financing.
Credit Score and Credit History
Your credit score is one of the most significant factors in determining RV loan approval. A score above 700 typically qualifies you for the most favorable interest rates, while scores below 600 may result in higher interest rates or even loan denial. Lenders use your credit score and history to gauge how likely you are to repay the loan.
If your score is lower than desired, it may be worth taking steps to improve it before applying. Paying off small debts, keeping credit utilization low, and disputing any errors on your credit report can help raise your score and improve your loan prospects.
Income Verification
Lenders also require proof of income to ensure you can manage the monthly loan payments. They typically ask for recent pay stubs, tax returns, or proof of business income if you are self-employed.
This documentation helps them determine whether your income is stable enough to support the loan. Gathering these documents early can help streamline the approval process, giving you more confidence as you approach lenders.
Debt-to-Income Ratio (DTI)
Your debt-to-income ratio is another critical factor lenders consider. This ratio compares your monthly debt payments to your gross monthly income, and lenders generally prefer a DTI under 36%. A lower DTI indicates that you’re not overburdened with debt, making it more likely that you’ll be able to take on a new loan. To calculate your DTI, divide your total monthly debt payments by your gross monthly income. Knowing your DTI in advance can help you assess whether you’re in a strong financial position before applying for an RV loan.
Loan Amount and RV Value
The loan amount you’re eligible for depends largely on the RV value you’re purchasing. Lenders assess whether you’re buying a new or used RV, which can influence the loan amount and interest rate. Newer models may come with higher interest rates because they depreciate more quickly, while older models might cost less upfront but could require repairs or upgrades. Balancing the RV’s cost with its value over time is essential in determining how much to borrow and what loan terms are most favorable for your financial situation.
Understanding these requirements allows you to better position yourself for RV loan approval and make informed decisions.
New Vs Used RV Loans: What’s Best for You?
When deciding between financing a new or used RV, it’s essential to weigh the benefits and drawbacks of each option. Both new and used RVs come with their own set of financial considerations, which can impact your loan terms, overall costs, and future maintenance needs.
New RVs: The Benefits and Drawbacks
Financing a new RV offers several advantages, including modern features and technology. New RVs often come equipped with the latest conveniences, from energy-efficient systems to advanced safety features.
Additionally, new RVs usually come with comprehensive warranties, reducing the chances of unexpected repair costs in the early years of ownership. New models generally lower maintenance costs since parts are fresh and less likely to need replacement. However, one significant drawback of financing a new RV is depreciation. New vehicles lose value quickly, with RVs depreciating around 20% to 30% in the first few years. This could leave you owing more on the loan than the RV is worth, known as being “upside down” on your loan.
Used RVs: Lower Cost, Higher Risk?
On the other hand, used RVs are appealing for their lower purchase prices and slower depreciation. A used RV holds its value better over time, meaning you may be able to sell it for closer to what you paid, reducing financial risk. Additionally, with a lower purchase price, you could get more RV for your money—such as a larger or higher-end model—than you might afford new. However, the main concern with used RVs is potential maintenance costs. Older models may require repairs sooner and may not have warranties, meaning out-of-pocket expenses could accumulate over time.
New vs. Used: Side-by-Side Comparison
When financing a new RV, interest rates tend to be slightly higher due to the risk of depreciation, and loan terms are often longer—Just how long are RV loans? You could be looking up to 20 years—allowing for lower monthly payments. In contrast, financing a used RV may come with a shorter loan term and lower interest rates, though this varies depending on the RV’s age and condition. Here’s a quick comparison to help you decide:
| Factor | New RV | Used RV |
| Purchase Price | $60,000 – $500,000 | $10,000 – $100,000 |
| Depreciation | High (20-30% in first few years) | Slower depreciation |
| Interest Rates | Slightly higher | Lower – Depending on age and condition |
| Loan Term | Up to 20 years | 10-15 years |
| Maintenance Costs | Low (With Warranty) | Higher-May need repairs sooner |
Ultimately, the decision between new and used depends on your budget, preferences, and long-term financial goals. By considering both options carefully, you’ll be in a stronger position to make the right choice for your RV lifestyle.
RV Loan FAQs
What are the best RV loan providers?
Banks, credit unions, and online lenders are the best RV loan providers. It’s important to compare rates and terms from multiple lenders to find the one that best suits your financial needs.
How long does it take to get an RV loan?
The time to secure an RV loan varies by lender, but it typically takes anywhere from a few days to two weeks. This includes the time for pre-approval, application submission, and final loan approval.
Are RV loans similar to car loans?
RV loans and car loans are similar in that they both require monthly payments with interest, but RV loans tend to have longer terms (up to 20 years) and may have higher interest rates due to the size of the loan and depreciation concerns.
Can you get an RV loan with bad credit?
It is possible to get an RV loan with bad credit, but you may face higher interest rates or require a larger down payment. Working to improve your credit score before applying can help secure better loan terms.
Start The RV Financing Process Today With Rec Loans 360
Securing the best RV loan requires careful planning and preparation. From understanding your credit score to comparing lender offers and calculating your budget, being well-prepared ensures that you’ll get the best terms for your RV purchase. Whether you’re financing a new or used RV, the key is to assess your financial situation, improve your credit score if necessary, and gather all necessary documentation to streamline the application process.
Ready to start your RV journey? Explore your financing options with REC Loans 360 today! Contact us to begin the application process and take the first step toward owning the RV of your dreams.
