Getting an RV Loan: What You Should Expect
An RV's steep price tag means lenders may have stricter requirements, such as a higher credit score and additional documentation, for borrowers.
An RV’s steep price tag means owners rely heavily on financing. Lenders include online and traditional banks, credit unions and RV dealerships. Here’s what you should keep in mind about RV loans.
Loan terms are longer. Some RV loans rival home mortgages, with repayment periods ranging from 10 to 20 years for amounts that can sometimes top $500,000. Aim for a loan with the shortest possible term that you can manage.
Lenders are more stringent. The more you need to borrow, the more a lender will require of you, says Gary Ocallaghan, finance director at Gerzeny’s RV World, a dealership with four locations in Florida. “Once you go over the $150,000 mark, you will need to provide additional documentation,” he says, including credit information, tax returns and personal financial statements. The buyer’s debt-to-income ratio, including the projected RV loan payment, must be under 50%, he adds.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Down payments are bigger. Most lenders require a minimum down payment of 10% of the sales price, says Ocallaghan.
Credit scores are higher. A good credit score for a car loan is typically 660 or better, but the bar is higher for RVs. You’ll need a credit score of at least 700, Ocallaghan says. “If your score is under 700, it is difficult to obtain approval.” Although his company works with many lenders, Ocallaghan knows of only two that would approve RV financing for borrowers with credit scores below 700.
The RV often serves as collateral. Most RV lenders will only consider a secured loan that uses the RV as collateral. Secured loans are easier to obtain, charge lower interest rates and have higher borrowing amounts than unsecured loans, which lenders consider riskier. Interest rates for secured loans recently ranged from 4.2% to nearly 8% at various banks and credit unions, depending on borrowing amounts and the loan term.
Older RVs are harder to finance. Generally, lenders won’t finance RVs that are more than 15 years old. If you are buying an older RV, you may want to consider a personal unsecured loan. Lenders may also require an RV inspection, which ranges from $150 to $1,200 depending on the vehicle.
-
Read This Before You Sign a Letter of Intent
An older couple received a letter of intent, or LOI, about land a solar company wanted to lease, but it exhibited some valuable-to-know red flags.
By H. Dennis Beaver, Esq. Published
-
Even if NFT Demand Returns, It’s Best to Collect What You Love
People’s genuine interest in a collectible is always a better indicator of what’s worth the price tag and what isn’t.
By Thomas Ruggie, ChFC®, CFP® Published
-
403(b) Contribution Limits for 2024
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Published
-
SEP IRA Contribution Limits for 2024
SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 a year.
By Jackie Stewart Published
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Published
-
SIMPLE IRA Contribution Limits for 2024
simple IRA The maximum amount workers at small businesses can contribute to a SIMPLE IRA increased by $500 for 2024.
By Jackie Stewart Published
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
By Jackie Stewart Published
-
Roth 401(k) Contribution Limits for 2024
retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
By Jackie Stewart Published
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
By Miriam Cross Published
-
Five Ways to a Cheap Last-Minute Vacation
Travel Procrastinator? No matter. You can pull off a fun and memorable getaway on a moment's notice — without breaking the bank.
By Vaishali Varu Last updated