How You Can Get the Best RV Loan Rates

When you’re ready to hit the road in your dream motorhome, fifth wheel, or travel trailer, understanding RV financing is the first step toward making it a reality. An RV loan is a specialized type of financing designed specifically for purchasing or refinancing a recreational vehicle. Whether you’re looking at a brand-new RV or considering refinancing your current one, RV loans are available from a variety of lenders, including banks, credit unions, and online lenders.

As you explore your RV financing options, it’s important to consider several factors: the loan interest rate, the total loan amount you’ll need, and the loan term that best fits your budget. Many equal housing lenders offer competitive rates and flexible terms, making it easier to find a loan that matches your needs. Whether you’re interested in a travel trailer for weekend getaways or a motorhome for full-time adventures, understanding the basics of RV loans can help you secure the best deal and get on the road faster. And if you already own an RV, refinancing your existing loan could help you lower your interest rate or adjust your monthly payments to better suit your financial goals.

The term RV stands for “recreational vehicle”, and while you may have an image in mind of what an RV looks like, in reality, there are a variety of vehicles that fall under the category of an RV. These vehicles often feature living areas, sleeping spaces, cooking facilities, and even bathroom facilities.

RVs range from ultra-luxurious to utilitarian with only the essentials. However, it’s important to note that truck campers and tow vehicles are typically excluded from most recreational vehicle financing options. Different types of recreational vehicles may qualify for different RV rates, so be sure to compare your options to secure great rates. In order to get the best RV loan rates for your new vehicle, it’s important to understand which type of RV you plan to buy, what the RV loan rates today look like, and even to consider the best-used RV loan rates to get a great deal on your new recreational vehicle.

What Qualifies as an RV?

When it comes to getting an RV loan, it’s important to know which vehicles qualify as RVs and are eligible for the best RV loan rates or best used RV loan rates. Not all recreational vehicles can be financed, and eligibility is subject to lender approval and specific criteria, including the type, age, and condition of the vehicle. While the general term for an RV can include a variety of vehicles, RVs are usually separated into four main types: class A, class B, class C, and travel trailers. It’s important to know which type you are considering so you can qualify for the best RV loan rates.

Class A

These RVs are at the high end of the price range but also offer the most amenities and spacious living areas. They usually include a large living space, dining areas, sleeping areas, and bathroom facilities; some offer towing capabilities to haul smaller vehicles. Class A RVs are bus-sized, great for living on the road, and make long-term travel very comfortable.

Class B

These RVs are about the same length as your average van which makes them easier to drive than longer Class A vehicles. They are often referred to as campervans, have raised roofs to increase interior living space, and offer cooking and sleeping amenities but usually have smaller bathroom facilities.

Class C

These RVs are smaller than Class A RVs and usually include a simple cooking and sleeping area, living space, and bathroom facilities. You can think of them as a cross between A and B class vehicles. These RVs save space by positioning the sleeping area over the cockpit of the vehicle.

Travel Trailers

The last type of RV on our list includes RVs you hitch up and pull behind your vehicle, such as:

• 5th Wheel Trailers
• Tent Trailers
• Folding Trailers
• Travel Trailers

These vehicles require you to have a truck with enough towing capacity to haul the type of RV you purchase. However, travel trailers range from very small and basic to large and luxurious. Travel trailers are smaller than other classes of RVs, are less expensive, and more versatile because you can detach your vehicle from your truck for day trips when you’re on the road.

While travel trailers require tow vehicles, most RV financing options do not cover the purchase of tow vehicles themselves.

What Are Typical RV Loan Terms?

Getting the best RV loan rates or the best used RV loan rates lowers the amount you’ll need to pay on your RV over the life of your loan. Typical RV loan terms vary depending on your credit history and score and the lender you choose to borrow from. While RV loans may seem similar to car loans, they usually fall under recreational or specialty loans and may have stricter borrowing requirements than a car loan, because they are considered a luxury vehicle.

Annual percentage rates (APRs) for RV loans can vary based on your credit profile, loan term, and whether the loan is secured by collateral.

In general, RV loans are secured loans that use the RV as collateral. Typical RV loan terms range from 6 to 20 years and usually require a 10%-20% downpayment to purchase. At Southeast Financial, we typically offer loans with 0% down and rarely require more than 15% down and specialize in recreational vehicle financing to help you get the best RV loan rates and best used RV loan rates. The actual APR offered will depend on verification of your income and other documents, and approval is subject to meeting the lender’s requirements.

What Is the Average RV Interest Rate?

Interest rates vary but typically range between 4%-20%. Your credit score plays a large role in determining what interest rate you are eligible for, and improving your credit score before making a big purchase can help you save money in the long run. Applicants with good credit are more likely to qualify for the lowest rates and a lower interest rate on their RV loans, making financing more affordable. The lower your rate, the less money you will need to pay your lender over the lifetime of your loan.

Be sure to review any potential fee that may be associated with your loan, as this can affect the overall cost.

Current Market Conditions

Right now, the market for RV loans is highly competitive, with many lenders—including credit unions and banks—offering attractive rates and flexible loan terms. This is great news for buyers, as it means you have more options to choose from and a better chance of securing a low annual percentage rate (APR) on your loan. However, it’s essential to do your homework: compare offers from multiple lenders, review the loan agreement carefully, and pay close attention to any prepayment penalties or fees that could affect your total cost.

Eligibility requirements can vary from lender to lender, so make sure you understand what’s needed before you apply. Some lenders may offer fixed rate loans with stable monthly payments, while others might have variable rates or stricter credit requirements. By shopping around and comparing APRs, loan terms, and fees, you can find the RV loan that best fits your needs and budget, ensuring you get the most value from your financing.

Benefits of Preapproval

Getting preapproved for an RV loan is a smart move that can make your RV buying experience smoother and more successful. With preapproval, you’ll know exactly how much you can afford to spend on a recreational vehicle, which helps you set a realistic budget and focus your search. Preapproval also gives you added leverage when negotiating with RV dealers, as it shows you’re a serious buyer with financing already in place.

Many credit unions and banks offer preapproval for RV loans, making it easy to get started before you even visit a dealership. Having your financing lined up in advance can save you time and reduce stress, allowing you to act quickly when you find the perfect RV. Plus, preapproval can help you avoid surprises during the loan process, so you can focus on finding the right vehicle for your next adventure.

Credit Union Options

Credit unions are a popular choice for RV financing, and for good reason. As a member of a credit union, you may have access to lower interest rates, more flexible loan options, and personalized service that can make the financing process easier. Credit unions often have more lenient eligibility requirements compared to other lenders, which can be especially helpful if you’re new to RV ownership or have unique financial needs.

When considering a credit union for your RV loan, be sure to compare their loan rates, terms, and fees with other lenders. Many credit unions offer specialized products like camper financing or motorhome financing, so you can find a loan tailored to your specific needs. Whether you’re looking for a low rate, flexible repayment terms, or a lender that understands the RV lifestyle, a credit union could be the perfect partner for your next purchase.

Calculating Your Monthly Payment

Before you commit to an RV loan, it’s important to know what your monthly payment will look like. Using a loan calculator, you can estimate your monthly payment based on the loan amount, interest rate, and loan term you’re considering. Don’t forget to factor in your down payment, as a larger down payment can reduce your loan amount and lower your monthly payment.

It’s also wise to consider any prepayment penalties or additional fees that could affect your total cost. Many lenders provide online loan calculators to help you compare different scenarios and find the best fit for your budget. By carefully calculating your estimated monthly payment, you can ensure your RV loan is affordable and aligns with your financial goals. Comparing offers from multiple lenders will help you secure the best rate and terms, so you can enjoy your new RV without financial stress.

How to Get Lower Interest Rates

Getting the best RV loan rates and best used RV loan rates depends largely on your credit score. In general, the higher your credit score, the lower your interest rate will be. You may also be able to get the best RV loan rates and best used RV loan rates by offering a bigger down payment on your vehicle. This will help you reduce your monthly payments and may help you get a better interest rate on your vehicle.

Another good rule of thumb for finding a great RV loan rate is to pay attention to current car loan rates. RV loans and car loans tend to follow the same trends. If car loan rates are down, it’s likely RV loan rates are lower as well and it may be time to snatch that RV you’ve had your eye on.

What Credit Score Is Needed to Buy an RV?

If you have a lower credit score, getting approved for an RV loan will be more difficult and it’s likely you will have a higher interest rate. Applicants with higher credit scores are more likely to be approved and receive better loan terms.

There are other factors, aside from your credit score, that lenders take into account when determining your RV loan eligibility including:

• Debt to Income Ratio
• Income
• Employment History
• Down Payment Amount

Each of these factors can help you get approved for an RV loan. If you’re still struggling to get approved even after taking additional steps and providing additional information, don’t stress. Taking the time to improve your credit so you can qualify will help you save money over the term of your RV loan and get the best RV loan rates and best used RV loan rates.

How Many Years Can You Finance an RV for?

Most lenders offer loans for 10-15 years but some offer loans up to 20 years or more. Longer terms may be used for loans over $50,000 but are often not offered for less expensive RVs. Some lenders provide fixed rates for RV loans, giving you predictable monthly payments, while others may offer unsecured loans as an alternative financing option.

Can you finance an RV like a house?

RV financing is more like car financing than home financing; however, the terms of RV loans can be nearly as long as home financing with terms up to 20 years. Like a mortgage, a specialty loan for an RV often uses the vehicle as collateral to back the loan should you fall through on your payments.

Can You Get a Mortgage On an RV?

RV loans aren’t eligible for a mortgage. They also vary slightly from car loans. RV loans usually fall under their own category for recreational or specialty loans because they are considered luxury vehicles. Despite not being eligible for home loans, RVs can act as a second home when it comes time to file your taxes.

What Qualifies an RV as a Second Home?

Generally, an RV only qualifies as a second home if it has all the facilities you need to fully live in your RV. This means it must have a sleeping area, cooking area, and toilet facilities. All classes of RV and 5th wheels can qualify if they have these features. Full timer RV users, who live in their vehicles year-round, may have different requirements or considerations when qualifying their RV as a second home.

Are RV Loans Tax Deductible?

If your RV meets the above requirements, you can get a tax deduction with a home mortgage interest deduction on your RV as a second home. Trailers or towed vehicles are generally not permitted to use a home mortgage interest deduction unless they contain permanent eating, sleeping, and bathroom facilities. Check with your tax professional to see if your vehicle allows for a tax deduction.

Can You Depreciate a Motorhome?

If you use your motorhome for business purposes, you can claim it as a business asset and depreciate any of your expenses like insurance, gas, and maintenance on your RV over a five year period. This can be a great way to save money if you plan to purchase your RV for business purposes.

What Is the Best Month to Buy an RV?

The price of an RV can vary widely depending on when you purchase your vehicle, and buying during the right time of year can help you save thousands of dollars on your RV purchase and get the best RV loan rates and best used RV loan rates. The best months to purchase your new RV are during the winter. This is because it’s the off-season and people aren’t looking to hit the road for some outdoor adventures while the weather is freezing. When paying for an RV during these months, it’s important to know the fair market value to avoid overpaying and ensure you get the best deal.

Purchasing a used RV from a private seller is also a good decision during fall and winter because many people don’t want to cover the expense of storing their RV during the winter. Alternatively, buying your new RV in the spring or summer will cost you more because it’s peak season and more people are looking to buy an RV so they can hit the road.

Top Mistakes to Avoid When Buying Your RV

It’s easy to get caught up in the excitement when it’s time to buy your new RV. You can’t wait to get the best RV loan rates or best used RV loan rates, get behind the wheel, and hit the road on a new adventure. But before you hit the road, there are some important things to keep in mind.

1. Do Your Homework: Getting the best RV loan rates and best RV for your family requires a little research on your part. Doing your research ensures you’ll get the features you want without overpaying.
2. Check Storage Space: Be realistic about the amount of gear you’ll be taking with you on trips. You don’t want to purchase an RV only to discover you can’t fit everything you need.
3. Find the Perfect Size: You don’t need an RV that’s too big, but also don’t want to be stuck in one that’s too small. Consider your needs and purchase accordingly.
4. Plan for Parking: Before you move or stay in any park, make sure you are aware of all the rules and regulations.
5. Bring a Generator: You’ll need your own energy source while you’re on the road, generators or solar panels can make this part of your life much smoother.
6. Purchase for Purpose: That RV might look beautiful, but you should always consider needs before appearances. Research the features that are available and determine what you need.

If you’re ready to get started, you can apply online or visit a branch to secure your RV loan today. Already have an RV loan? Consider whether you can refinance to lower your monthly payments or get better loan terms.

Getting the Perfect RV

If you already have an RV, RV refinancing can help you save money and free up your monthly budget for more time on the road. After loan approval, funds are typically paid directly to the dealer or deposited into your bank account, with funding usually completed within a business day. Some lenders may require you to set up direct deposit or meet the lender’s insurance requirements before finalizing the loan. Visit Southeast Financial to find out our RV loan rates today.