Before hitting the gas in your dream rig, you must consider how you’re financing an RV. New or used, RVs can be a significant investment, and financing options are crucial to making your dream a reality.
Here are your primary loan options, recommended lenders specializing in financing used RVs, and tips before you sign any loan paperwork.
1. Financing an RV with an RV loan
This is the most common option offered by dealerships, banks, credit unions, and online lenders. Secured loans use the RV as collateral, often resulting in lower interest rates. Terms typically range from 10 to 20 years, with some lenders even offering longer terms to lower your monthly payments.
Many dealers offer financing options through partnerships with lenders. This can be convenient, but compare rates and terms against other options before committing. Knowing you have financing options from other lenders strengthens your negotiating position at the dealership. That means you might be able to secure a better deal on the RV price or financing terms.
Banks and credit unions often offer competitive rates and longer loan terms than dealerships. Your existing relationship with them also can be an advantage.
But what if you’re buying a used RV online, like from our renovated RV marketplace? That’s when you’ll need to do your research to find lending options for you.
Online lenders can offer a quick and convenient application process, but rates might be higher than those of traditional lenders. If you don’t want to finance with your bank or a local credit union, here are a few online lenders for quotes.
1. Lightstream.
We recommend Lightstream for ease and transparency when financing an RV.Lightstream is a good first place to look for a used RV loan for a few reasons:
- Rate transparency. Lightstream tells you exactly what your rates & monthly payments arebeforeyou even apply.
- Simple.Lightstream’s online loan application takes minutes and customers can get funds fast.
- Finance smaller loans. Lightstream processes RV loans for as low as $5,000 and up to $100,000
2. Lending Tree
You can find competitive options and rates for RV loans on Lending Tree. You input your purchase price, desired loan payment, loan term, and more in the application process. You will be required to create a free account to get your quote.
3. Trident Funding
Trident Funding boasts that they are the #1 option for financing RV purchases. They will fund larger RV purchases (up to $2,000,000) and offer resources for learning more about how financing an RV works.
Financing an RV with a personal loan
Consider a personal loan if your credit score shines and the RV isn’t too expensive. While they may have slightly higher interest rates than RV loans, they are unsecured, meaning your RV will not be used as collateral. With personal loans, you don’t risk losing the RV if you miss payments.
These are suitable for used RVs below the minimum amount for dedicated RV loans.
Don’t settle for the first offer you receive. Get pre-approved for loans from various lenders, including your bank, credit union, and online lenders, to compare interest rates and terms. Exercise caution and ensure you can comfortably afford the repayments. Also, be sure to shop around for the best interest rates.
You also can use your savings for a down payment. This can significantly reduce your loan amount and interest payments. The larger the down payment, the lower the loan amount and, consequently, the total interest you pay over the loan term. Aim for a higher down payment to save money in the long run.
In addition, consider a staggered approach: save for a down payment and take out a loan for the remaining amount.
If you own a home, consider unlocking the equity, which can be used to finance an RV. However, this comes with significant risks, including jeopardizing your homeownership. Explore this option only after exhausting other avenues and carefully considering the implications.
Read Next: Our Best Guide for Buying an RV
Financing an RV: 5 Tips for Choosing the Right Option
- Build up your savings. Putting a larger down payment on a rig means financing a smaller amount.
- Shop around. Compare rates, terms, and fees from different lenders.
- Consider your credit score. A good credit score qualifies you for better rates. If your score is low, find ways to increase your credit score before you apply for loans.
- Calculate the total cost of ownership, including insurance, maintenance, storage, and campsite fees. Also, factor in potential maintenance costs and unexpected repairs into your budget. Owning an RV is an enjoyable experience, but responsible planning is crucial to ensure your adventure stays smooth and financially secure.
Related: Plan for these 11 hidden costs of RV ownership - Read the fine print. Review loan terms and conditions carefully before signing anything. Understand the interest rate, repayment term, prepayment penalties (if any), and any additional fees involved.
Financing a Used RV
Financing a used RV shouldn’t derail your adventure. By carefully considering these options and planning your finances effectively, you can turn your dream of hitting the open road into a reality. Remember, responsible borrowing is key to a happy and stress-free journey!
