"Follow these steps and you will come out ahead"
RV loans and financing are the trickiest part of purchasing an rv, especially if you are buying a used rv. Financing is typically where many dealerships make extra profits at your expense, often through special add-ons, higher rates, or special dealer fees, they pass on to you at inflated costs. Many of the larger RV dealers offer good rv financing in-house and should at least be compared and considered. They often have such a large volume of applications that are specially targeted to RV's, that they can compete with typical banks and credit unions.
Follow these steps and you will come out ahead. First, settle on an rv that you want without discussing financing, settle on a price, agree to a trade in value (if you have one), then tell the salesman you are willing to discuss any financing options they have but do NOT tell them or show them the terms you have already gotten approval for from your bank or other rv loan financing source. Spend a little time now seeing what they offer BEFORE you visit the rv lot and get an rv loan.
RV loan interest rate - Your interest rate will vary because it depends on many factors, which include your loan total, expected down payment, credit profile and the value of your RV. Most companies will want to process your rv loan application BEFORE discussing terms. This is normal and since most companies can complete your application in less than an hour, it shouldn't be an issue.
Down payment - Most rv loans require a 20% down payment. People with great credit however often qualify for special programs that have no minimum down requirements. Mostly your credit score will determine this.
Minimum rv loan amount - I rarely see loans processed in amounts less than $10,000. The value of the rv is just not worth the risk to the bank if they have to repossess it. It costs the bank the same amount to repossess your $9,000 pop-up trailer as it does to repossess a $400,000 class A diesel coach. With the big coach they have something that is easy to sell. With the pop-up, they do not.
Loan term length - most companies will not loan on an RV for less than 5 years. Most larger companies will loan for as long as 20 years since they see the bigger coaches as investments and many times as primary residences.
RV loan application fee - many companies charge to find out if they can loan you money. Do not pay it! INSIST on a free application approval process. If they are not willing to take this small risk on you then they are less likely to be perfect to work with. Don't waste your time.
RV makes that can be financed - Many banks only want to loan on large, expensive Class A motorhomes or buses. If you are buying a class B, class C motorhome, travel trailer, 5th wheel, park model, truck camper or van conversion, ask up front, before you get into the lengthy application, if they loan on that kind of vehicle. If they just stare at you when you say 5th wheel, or if filling out an online application there is not "drop down" box that contains the word "5th wheel" for vehicle type, then move on.
Financing older rv's - It can be quite difficult without perfect credit to finance an older rv. Some companies will go back 12-15 years on a real solid class A with a serious legitimate survey or appraisal on it. Other companies will not touch anything older than 7 years regardless of value or credit score. The point is ask FIRST if they loan on your year rv so you don't waste time filling out an application for an rv loan that will lead nowhere.
Credit score - the better companies that will finance you on an rv loan without up front application fees or credit check fees, who have good interest rates, and can get it done in an hour or two, will require a credit score of 600 - 640 and sometimes higher. If you don't have a credit score in that range you will need to be more flexible in your approach and in the interest rates you will be willing to accept.
Getting an rv loan AFTER you bought the rv - Some banks have a cash recapture program that allows you to buy an rv using your cash, like when you stumble on a great incredible deal or distress sale and need to by it that day, then they give you the loan later and take possession of your title until payoff. This can typically be done up to 4-6 months after the rv purchase.
RV Loan calculation - Make sure the loan you get is a simple interest loan. This way you only pay interest on the principal you owe, and that amount gets reduced every payment you make on the rv loan.
Jason Odom has chronicled full time motorhome living since 2003, traveling over 40,000 miles, exploring and reporting on the most incredible secret places to camp, and virtually every aspect of rv ownership and travel.
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