According to a Mordor Intelligence report, there were more than 10 million US households that owned an RV in 2017.
The report also found that a further 17 million American households expressed an interest in buying an RV in the future. RVing can be a great way to travel and spend time with your family and friends.
However, if you're buying an RV for the first time, there's a lot of research you need to do and information to take in. That's why we've created a guide on RV loans to help you make the right choice when it comes to buying your ideal RV.
Buying an RV for the First Time: RV Loans
First-time buyers often have to take out loans for RVs. That's because an RV can cost anywhere between $6,000 and $500,000, depending on the size and model. The initial cost of an RV might seem steep, however, in the long run, it could save you up to 60% on travel costs compared to traditional vacations.
Things to Consider Before Choosing an RV Loan
Before choosing a loan that is right for you and your ideal RV, you need to think about your credit score, RV loan rates, and repayment options.
The first thing to consider before choosing an RV loan is your credit score. Those with good credit scores should be able to get a loan with ease. However, if you have a poor credit score, then you might need to do additional research into bad credit RV loans to find a lender that'll accept you.
The second thing to consider is the RV loan interest rates. Loan rates differ depending on your credit score and the lender, so it's important to shop around and find one that suits your budget.
For those who have a good credit score, you'll be able to find RV financing rates that start at just above 4%. However, those with poor credit scores might only be able to find high finance rates, such as 20% or higher. One way to avoid high-interest rates is by offering a larger down payment or by trying to improve your credit score.
And the third thing you need to consider before choosing an RV loan is the cost of monthly repayments. How much money can you afford to pay off each month?
Typically, RV financing repayment terms offer between 10 and 15 years, but some lenders may allow longer terms of up to 20 years. Remember that the longer the repayment plan, the more interest you'll pay and the more expensive the RV will be in the long run.
What Are the Best RV Loans?
There are lenders who offer a variety of different RV loans, for both new and used motorhomes. Banks, online lenders, RV dealerships, or credit unions might all be loan options for you. But how do you tell which ones are right for you?
1. Bank Loans
Banks offer competitive loan rates and all come with different loan terms. Bank loans for RVs are a good option for those with good credit scores. Most banks don't offer pre-qualification and some also require that you go in-store to apply for their loans.
Not all banks offer loans for RVs, but there are a few who do, including U.S. Bank, Wells Fargo, and USAA.
The U.S. Bank has two options when it comes to RV loans, you can either get a secured loan between $5,000 to $150,000 for new or used RVs or you can get a secured RV loan through the dealership between $10,000 and $500,000.
The $5,000 to $150,000 U.S. Bank loan can be applied for online, on the phone, or in-store. It covers RVs, travel trailers, truck campers, and pop-up campers.
While the RV loan through the dealership offers higher financing options and repayment terms of up to 20 years. However, this loan requires a down payment of at least 10%.
Wells Fargo is another bank RV loan option. This bank offers loans of up to $100,000 for RVs, motorhomes, campers, and travel trailers. With Wells Fargo, you can expect to have the funds within one to two business days.
USAA is a financial services company exclusively serving military members and their families. The company provides RV loans for campers, trailers, fifth-wheel RVs, motorhomes, and pop-up campers. For those with good credit, USAA's APR starts at 5.49%.
2. Online Lender Loans
If you can't get accepted for a bank loan, or you can't find an interest rate that's right for you, you can always look into online lender loans. These loans are often unsecured, quick to fund and you're able to pre-qualify by checking your rate without it impacting your credit score.
Personal online lenders can offer loans of up to $100,000, as is seen with LightStream and this company can also provide funding on the same day. The APR of LightStream for those with excellent credit (720 to 850 FICO) starts at 4.29%.
There are also other online lenders, such as Marcus personal loans. This lending company has a maximum loan amount of $40,000, which comes with an APR of 6% for those with good credit.
3. RV Dealership Loans
Elsewhere, you might be able to find an RV dealership that offers loans, regardless of your financial circumstances. As is the case with No Credit Campers, who help those with bad credit out. No Credit Campers offer funding of up to $35,000 to help you get the camper or motorhome of your dreams.
If you want to shop locally, be sure to go in-store and ask your local dealership about their financing options. The chances are they might offer RV loans to help you pay for the vehicle and if not, there are plenty of online RV dealerships that do.
4. Credit Union
Another option when it comes to financing your RV dream is a credit union. Credit unions are nonprofit organizations that help the members in their community or within a certain group. Credit unions might be able to help you get lower rates on your loans and get you accepted for loans, regardless of your credit score.
An example of a credit union that might be able to help you is First Tech Federal Credit Union. This organization offers secured loans of up to $300,000 for new and used RVs. APR rates start at 5.34% but are often higher for older models.
Find an RV Loan That Works for You
There is a lot to research and decisions that go into buying an RV for the first time, however, financing should never be an issue. If you've always wanted an RV, follow our guide on the types of RV loans and find the right one for you.
Get in touch with our team to start discussing your RV financing options now so you can get on the road quicker.
