RV Financing 101

RV travel is a wonderful way to see a lot of this country – from important historic sites to bustling cities to gorgeous national parks. If you want to live an RV lifestyle, either full-time or with lots of weekend and vacation road trips, you may be thinking about purchasing your own RV. Because that’s a big purchase, this is the time you may also be considering RV financing.

This article will walk you through the various options for RV financing, along with the steps you’ll need to take to secure an RV loan. If you’re a first-time buyer, looking to upgrade your rig, or are a full-timer looking for a suitable motorhome, check out these tips for RV financing.

The RV Financing Process Step-by-Step

This infographic pretty clearly outlines the steps you need to take when you want to secure RV financing. Let’s take a closer look at each step.

Pre-approval (and why it matters)

Getting pre-approved for an RV loan can make the entire financing process easier. Pre-approval is the process where a lender looks at your financial situation. They’ll consider your credit score, income, debts, and sometimes the amount of your down payment – all before you actually apply for a loan. If you qualify, the lender will give you a conditional approval that says how much they’re willing to lend you, at what interest rate, and how long you have to pay the loan back.

All of this helps you to know where you stand when you begin shopping for RVs.

And pre-approval matters for a few reasons:

• Sets a budget: Getting pre-approved for a loan means you know exactly how much you can borrow so you can focus on RVs within your range.
• Strengthens negotiating power: You’re in a strong position when you have a note from your bank, showing what you have to spend. It also shows you’re serious – you went to the trouble of securing financing already, making you a strong prospective buyer. Sellers may be more willing to negotiate since they know you have the money ready to go.
• Helps lock in interest rates: Some lenders let you lock in your interest rate for a certain period after the pre-approval. In those cases, you don’t need to worry about rates going up as you shop for your rig.
• Saves time later: Since you get most of the paperwork done beforehand, the loan approval and closing process move faster after you’ve settled on an RV. You won’t have to wait as long to get the new rig you’re excited about.
• Shows red flags early on: If you have issues with your credit, income, or debt-to-income ratio, you’ll find out before you’ve been out shopping for RVs. You can take some time to work on your financial picture before committing to a big RV purchase.

Choosing a loan type and lender

There are several types of RV loans, which we’ll look at in more depth in a minute. But you can choose from secured RV loans, unsecured personal loans, home equity loans, or dealer financing.

You also have options for different lenders where you can get financing. Banks often have competitive rates for those with good credit. Credit unions often have lower rates, more flexible terms, and fewer fees. However, you usually need to be a member of the credit union in order to take advantage of these perks. Online lenders vary widely. They offer convenient, quick applications and decisions. But rates vary widely and, as with anything online, you’ll want to research and read reviews of the lenders to make sure they’re trustworthy. Some lenders also specialize in RV and marine financing. With specialty lenders, you may find tailored terms, long repayment periods, and a better knowledge of the market and the unique challenges of financing larger vehicles.

As you look for financing, you’ll want to compare the following factors:

• Interest rate: A 1% difference seems small, but because RVs are expensive, that can add thousands to your total cost.
• Loan term: The shorter the loan, the less interest you accrue and the quicker you pay it off. However, you’ll also pay a greater amount each month. You’ll need to weigh lower monthly payments against paying more interest.
• Down payment requirements: Many lenders require you to put 10-20% down so you’ll need a good chunk of money.
• Fees: There may be origination fees, prepayment penalties, and late fees. Make sure you know the fees and avoid the ones you can.
• Customer service & flexibility: Are you able to refinance if you wish? Are you penalized if you add extra payments to pay off your loan quicker? Are there options to pause payments if you have a sudden hardship? A lender who is easy to work with can make a huge difference.

Submitting an application and documents

Once you’ve settled on a loan type and lender, it’s time to fill out an application. You can often apply online now, but there are sometimes options to do so in person or at a dealership as well. You’ll need your Social Security number, employment and income information, an estimated RV price and down payment, and the desired terms of the loan. Some lenders will do a credit inquiry at this point.

You’ll likely need to provide documents to prove your income and identity. These may include W-2s or pay stubs, a driver’s license, utility bills or mortgage statements, and bank statements. Be ready for lenders to follow up with any questions or to ask for other documentation. If this is a complicated loan, it may take a few days for the loan to be funded.

Negotiating loan terms

Once you’ve been approved for a loan, you don’t need to assume those numbers are set in stone. Loan terms can often be negotiated, especially if you have qualities like good credit, a hefty down payment, or several lenders competing to loan you money.

Consider negotiating the interest rate, especially if you have several offers. You can also negotiate loan terms like the length of the loan or whether extra payments can go directly towards the principal. Ask to have origination fees, documentation fees, or prepayment penalties waived.

Although it may be tempting to pick the loan with the lowest monthly payment, that might not be to your best advantage. Taking longer to pay back the loan means you’ll pay more in interest. Compare the total cost of your loan instead of just the monthly payment.

Also, use this opportunity to ask any questions you have. Ask whether your rate is fixed (it won’t move) or variable (it could go down – yay! – or up – boo!) Ask about any one-time or other fees. Don’t be afraid to ask about any terms you don’t understand. There are no silly questions, especially when this much money is on the line!

Closing the loan and taking ownership

Once you’ve done your negotiating and have an offer you like, it’s time to close the loan and become the proud owner of your RV. This step is similar to closing on a car or home.

Your lender will prepare a loan agreement and outline the terms everyone agreed to. It will state the interest rate, loan amount, repayment schedule, fees, and other details. Read everything carefully before you sign. Make sure this is the interest rate and loan terms you were promised. Check for any extra fees. Look at the loan type (variable or fixed). If anything looks different than what you were expecting, ask questions. Do not feel pressured to sign anything you’re uncomfortable with.

Your lender may ask for final paperwork. They might want a signed purchase agreement or bill of sale from the dealer or private seller. They often require proof of insurance to show the RV is covered. The lender might ask to see title transfer paperwork or a vehicle identification number verification. If this is a private sale, the lender may also want to see the seller’s title to make sure there are no existing liens.

When the paperwork is done, the lender will release the money. If you’re buying from a dealer, the lender will often send the payment directly to them. If you’re doing a private sale, you might get funds via an escrow service, or the seller may get a cashier’s check. Then, you’ll get a confirmation that your loan is active, along with details on how to make payments, the amount, and the monthly due date.

When the loan is funded, the RV title will be updated to show you as the owner, although the lender will appear as the lienholder until you pay off the loan. After you completely repay the loan, the lender will release the lien, and you’ll get a clear title in your name.

Congratulations! Be sure to keep copies of your loan agreement, your insurance policy, and your title or registration paperwork. You’ll need all of that if you want to sell or refinance your RV.

Understanding RV Financing Basics

To understand RV financing basics, you’ll first need to understand what RV financing is and how it works. Financing an RV can feel tricky, because it’s like buying a home and a vehicle, all in one. RV financing is, quite simply, borrowing money from a lender to buy an RV … then paying that money back with interest.

When you secure RV financing, you’ll apply for a loan through a bank, credit union, online lender, or RV dealership. You’ll get approval based on factors like your credit score, income, down payment, and debt-to-income ratio. The lender wants to make sure you’re likely to pay back your loan.

Difference between RV financing and car financing

Although they have some similarities, RV financing is different from car financing.

The amount of RV financing you need is likely much higher than the amount of money you need to buy a car. RVs can cost anywhere from $20,000 for a small trailer to $300,000 and up for luxury Class A motorhomes. RV financing usually requires a much bigger down payment because the price is so much higher. Car loans don’t necessarily involve a down payment at all.

Loan terms are also longer for RVs because the overall price is higher. Car loans usually range from 3 – 7 years, while RV loans can go 10 to 20 years or longer. They’re closer in length to a mortgage.

RVs are also usually considered luxury or recreational purchases, which means lenders consider them riskier to finance. Interest rates on RV loans are usually higher than on car loans. Borrowers often need better credit than they do for a car loan as well.

Like cars, the RV itself is usually the collateral – if you can’t pay, the lender can take back the RV. Also, not all banks deal with RV loans. You might want to search for a specialty RV lender or credit union that understands the RV market and offers better terms for RV buyers.

Lenders may also look at the maintenance, insurance, and storage conditions for the RV when they’re deciding on the risk of loaning you money.

New vs. used RV loan considerations

RV financing can look different, depending on whether you’re buying a brand-new motorhome or a used and loved RV. Rates, terms, and other loan requirements can all change, depending on whether the RV you’re financing is new or used. New RVs usually qualify for lower interest rates and longer terms – sometimes up to 20 years. This is because it’s easier to determine the value of new models, they have a predictable depreciation rate, and they’re considered less risky for lenders.

However, financing a new RV can sometimes leave you “upside down” for a few years. Being upside down on a loan means you owe more than the item is worth. With RVs, this is because the vehicle depreciates quickly at first. New RVs can lose 20-30% of their value in the first year, and around 50% of their value after five years.

New models may also allow smaller down payments since these RVs have a higher resale value.

Loans for used RVs can often come with higher rates and shorter terms of between 5-15 years. Older vehicles have more wear and tear than new models. However, older models don’t have the steep depreciation that happens with newer RVs. Used RVs may also require larger down payments.

With used RVs, most lenders have age or mileage limits on what they will agree to finance. Some lenders won’t offer RV financing for vehicles more than 10-15 years old. Others might cap the number of miles they’ll allow on motorized RVs. If you have trouble with RV financing for an older RV, you may need to look into a personal loan or a specialty RV lender who handles vintage or high-mileage rigs.

RVs as luxury purchases

Lenders often consider RVs “luxury purchases.” Luxury purchases carry more risk – if someone hits a tough spot, they’re more likely to stop making RV payments than car or home mortgage payments. So classifying RV loans as luxuries can affect everything from the interest rate to the approval requirements for your loan.

Lenders often charge higher interest rates and require larger down payments for these loans. You’ll probably also need a stronger credit score than you might for another loan.

The rate of depreciation for your RV and the resale value also matter more. A lender knows if they have to repossess and resell an RV, it might get them less than the loan balance. They may loan less of the total price, or limit loans on RVs of a certain age or model.

Types of RV Loans

There are several possibilities for RV loans that you can consider. Here are a few of the most popular options.

• Secured RV Loans: These types of loans use the actual RV as collateral. They also usually have lower interest rates. Terms on these loans can go up to 10-20 years for larger motorhomes. They’re best for buyers of newer or more expensive RVs who want lower monthly payments.
• Unsecured Personal Loans: These types of loans do not require using your RV as collateral. Since the lender doesn’t have that in the balance, interest rates are usually higher and terms are shorter – often 3-7 years. These loans are best for less expensive rigs like campervans or travel trailers.
• Home Equity Loans (HELOCs): If you own a home, you can use the equity in that home to get a loan. HELOCs usually have lower rates, but your home is at risk if you can’t repay the loan. These loans are best for homeowners with significant equity who are confident they can repay the loan.
• Dealer Financing: Many RV dealers partner with banks or credit unions to offer financing on-site with the dealership. It’s a very convenient option, but it isn’t always the most competitive option. It’s best for buyers who want to get everything done in one spot, but it’s only worth it if the rate and terms are good.

RV Loan Terms and Rates

You’ll want to know the terms and interest rate for your loan as part of the process of securing RV financing. Here’s what to know:

Factor	What It Means	Typical Range/Key Details	What Affects It
Loan Length (Term)	How long you have to repay the loan. Longer terms mean lower monthly payments but more in interest.	• Short-term: 5–7 years (smaller or used RVs) • Mid-term: 10–15 years (mid-range models) • Long-term: up to 20 years (new or expensive RVs)	RV price, age, lender type, and your credit score
Interest Rate (APR)	The cost of borrowing, Interest is an extra charge that is a percentage of the loan balance.	Current Average Range: 6%–10% for new RVs; 8%–14% for used RVs	Credit score, income stability, down payment size, loan term, and whether the RV is new or used
New vs. Used RV Loans	New RVs typically have longer terms and lower rates, while used RVs depreciate faster and may require larger down payments.	• New RVs: Lower rates, up to 20-year terms • Used RVs: Higher rates, 5–15-year terms • Some lenders limit financing for RVs over 10–15 years old	RV condition, resale value, model year, and lender policy
Fixed vs. Variable Rate Loans	Fixed rates stay the same for the life of the loan; variable rates can rise or fall with market conditions.	• Fixed Rate: Predictable payments; most common • Variable Rate: Lower initial rate but interest rate can go up or down	Economic conditions, risk tolerance, loan length, and lender offerings

What Lenders Look At (Loan Requirements)

You’ll want to know what lenders look at when they’re determining RV financing. That way, you can build a strong case for your loan.

• Credit Score: Your credit score is one of the biggest factors in determining whether you’ll be approved and get a good interest rate for your loan. If you have a high credit score, you’re probably a safe lending risk, and you’re likely to get a better interest rate.
  • Prime borrowers are those with scores of 700 and up. They get the lowest interest rates and longest loan terms
  • Mid-tier borrowers score between 650-699 and can still get financing but may have higher interest rates.
  • Subprime borrowers are those below 650. They may need bigger down payments, shorter terms, or a co-signer. They may be denied for a loan.

RV-specialty lenders and credit unions that specialize in RV loans are often more flexible with lower scores, but those customers usually pay more for lenders to assume more risk.

• Debt-to-Income Ratio: This compares what you earn to your monthly loan payment. Most lenders prefer a DTI below 40-45%. This indicates that you make enough money to afford your monthly payments.
• Down Payment: The higher the down payment, the more favorably a lender will see you because this lowers the overall size of the loan. It’s beneficial to you as well, because it means you’ll pay less in interest over the length of the loan.
• Employment and Income Verification: Since RV loans can be from 10-20 years long, lenders want reassurance that you have a steady income to continue making payments. They might ask for W-2s, pay stubs, or tax returns to verify your income.
• RV Type, Age, and Value: Lenders also want to know about the actual RV. Newer, more expensive RVs are easier to finance and may get better terms. Older RVs may have limits on the length of the loan, or may need an inspection by the lender. This is because often, the RV is the collateral for the loan. The lender needs to know that it has enough value to recover any losses if it gets repossessed.

Costs Beyond the Loan

When people buy a new, or new-to-them, RV, the loan is usually the cost that looms largest. This makes sense because the number is so high! However, there are other costs associated with an RV purchase that you’ll need to consider. Some of these are even expenses the lender may require you to incur in order to secure your loan. Here are a few of those other costs.

Insurance Requirements

Most lenders will require you to carry full coverage RV insurance while you have a loan with them. If your RV is collateral for the loan, they want to make sure it’s in good condition if they have to take it back. So they’ll want it to be protected in case of an accident, theft, or other damage. Usually, they’ll require you to have:

• Comprehensive and collision: This covers accidents, fire, vandalism, and weather damage
• Liability: Most states require liability coverage to cover injuries or property damage that you might cause in an accident
• Gap coverage: Some lenders may want this, or you may decide to get it yourself. It covers the difference between what your RV is worth and what you still own if your rig is totaled early in the loan when you’re upside down on the vehicle.

Registration, Taxes, and Fees

Just like a car or truck, your RV will need to be registered with the Department of Motor Vehicles in your state. You’ll pay a registration fee for this, along with a sales tax when you purchase your RV, although this can often be rolled into the loan amount. You’ll have title and registration fees, which vary by state. Some states also have annual vehicle taxes, which are based on the RV’s value or weight.

If you buy your RV from the dealer, these extra fees may be rolled right into your loan. For private sales, you may need to pay them as they’re due.

Maintenance and Storage

Your RV will require regular maintenance to make sure it’s safe and in good shape for driving. Lenders may ask how you intend to maintain and store your RV … because, again, they want to make sure it stays in good shape if they have to take it back.

Plan on costs for routine maintenance like oil changes, tires, roof resealing, generator service, and appliance repairs.

You may also plan to store your RV when it’s not in use. Plan on monthly fees for covered or outdoor storage, especially if you live in an area with harsh weather.

Along with meeting any requirements from lenders, budgeting to maintain and protect your RV can help you avoid costly repairs that could affect your ability to make payments on your loan.

RV Financing Tips & Strategies

Now that you know what to expect when securing RV financing, here are a few things you can work on to get a better rate and possibly a lower payment.

The most important factor is your credit score, and even a small bump up can get you a better interest rate and save you thousands over the life of your loan. If you need to improve your score, check your credit report to make sure there aren’t any errors. Pay down debt like credit cards, and don’t apply for any other big loans or new credit cards at this point. If you can get your score above 700, you’ll be positioned to get the best terms for a loan.

Next, you can save up a large down payment. The more you can put down, the less you need to borrow (and the less interest you’ll pay!). You can also qualify for better interest rates this way. Aim to put down 10-20% of the total cost of the RV.

Then, shop around. Compare offers from banks, credit unions, online lenders, RV-specialty lenders, and dealer financing programs. Small tweaks, like a 1% interest rate, can save you thousands of dollars when you’re looking at a 10-15 year loan.

If you can, consider a shorter loan term. You’ll have a higher payment, but you’ll pay less interest because you won’t have the loan as long. If you do have a longer-term loan, try to make extra payments toward the principal so you can pay it off quicker.

When you’re considering RV financing, avoid the temptation to roll all of your costs, like warranties, add-ons, and taxes, into the loan. That will increase your total balance and earn you more interest. If you can pay those expenses as you go, you’ll be in a better financial position. This can also help you avoid being upside down on your loan in case you have to sell your RV shortly after you buy it.

Special Financing Situations

Since buying an RV is different than buying another vehicle, you may find yourself with special financing needs. Here are a few situations potential RV buyers may find themselves in and how to handle them.

Full-Time RVers

If your RV will be your primary residence, your financing may be different than someone buying an RV to use on weekends. Many traditional banks assume RV loans are for those people and offer recreational financing for part-time or vacation use. Lenders may need extra verification for those who use their RV as a home. You may need to provide:

• Proof of stable, recurring income even if you’re self-employed or a remote worker. Your lender wants to know you have the money to make payments.
• A permanent mailing address: Lenders still need to send you some things. You may need a family address, P.O. box you check regularly, or a mail forwarding service.
• Full-time RV insurance which combines important elements of auto and homeowners insurance coverage.

Not every lender offers loans for full-time RVers. You may need to look for specialty RV lenders or credit unions that are used to these types of loans.

Bad or Low Credit Scores

If you have a low credit score, you can often still secure RV financing, but you may have some extra challenges. You’ll likely have a higher interest rate and need to put down a larger down payment. You may also end up with a shorter loan, so the lender can reduce their risk. Lenders may also require a co-signer.

Begin by looking at financing with credit unions or RV-specialty lenders. These organizations tend to be more flexible than big banks. Consider buying a less expensive or used RV. Meanwhile, build up your credit by paying down debt and avoiding any new credit inquiries.

Refinancing an RV Loan

Refinancing can be a good idea if it helps you lower your interest rate or shorten your term so you pay off your loan faster. Consider refinancing if interest rates have dropped since you took out the initial loan. Also consider refinancing if your credit score has improved, you now have a higher income, or you want to reduce your monthly payments or shorten the term of the loan to save on interest.

You’ll want to compare your new rate, loan balance, and payoff time before deciding. You’ll also want to find out if there are any closing costs that come with refinancing and factor those into your decision.

Financing an RV Through a Private Seller

You might save money by purchasing an RV from a private party instead of through a dealer. However, that can be more complicated to finance. Private sellers don’t have a financing department like dealers do. You’ll need to arrange a loan directly with your bank, credit union, or online lender.

They’ll probably want you to provide:

• A bill of sale and title from the seller
• The RV’s VIN and condition report
• Possibly an inspection or appraisal

Money for the sale is usually paid directly to the seller or through an escrow service. You’ll want to make sure the title is clear of liens before you transfer the money.

Alternatives to Traditional Financing

Although RV loans are the most common way to pay for a rig, they’re not the only way to do it. Depending on your financial situation, how you’ll use the RV, and your long-term plans, you can also look at options like leasing, rent-to-own, or shared ownership to pay for an RV.

Leasing an RV

Leasing an RV works like leasing a car – you’ll make monthly payments to use the RV for a set time period (usually 3-5 years). At the end, you return, buy, or trade the RV in for an upgrade. Leases often offer lower monthly payments than financing. You also have the option to upgrade to a newer model every few years. Finally, you don’t need to worry about the RV depreciating – you’ll be turning it in at the end.

However, you also don’t build any equity or own the RV at all. There may be mileage limits or wear-and-tear penalties for using the RV. Not all RV dealers offer lease programs, and there are fewer options than with autos.

Rent-to-Own Programs

Some dealers and RV specialty companies offer rent-or-lease-to-own programs. This allows you to apply part of your rental payments toward eventually owning the RV. You’ll pay monthly rental fees, and a portion of each month’s rent counts as credit toward the RV purchase price.

This option can mean easier approval for buyers with a limited credit history. It also lets first-time RVers try the RV for a while before fully committing to buying the RV. You may not need as big a down payment, either.

However, there’s often a higher overall cost if you buy an RV this way. There’s limited availability for this kind of RV financing, and there are stricter conditions. You also don’t own the RV until all your payments are complete.

Paying Cash vs. Financing

If you can pay cash for an RV, you may want to consider that instead of financing. You won’t accrue interest, you won’t have monthly payments, and you’ll fully own your RV from the very beginning. However, this can also drain your savings and eliminate your liquidity.

Financing an RV lets you keep more cash on hand for traveling, maintenance, or investments. If your RV counts as a second home, you may also get some tax advantages. But you’ll pay interest over time, which will increase the total cost of the RV. Also, the RV’s depreciation could outpace your equity, leaving you owing more than the RV is worth.

If financing rates are low and you can earn more through savings or investments than you’d pay in interest, you might want to consider financing. But if you prefer simplicity and debt-free ownership, go cash.

Fractional Ownership or Co-Ownership Models

Fractional ownership means several buyers go in on one RV together, similar to a timeshare or boat club. Each co-owner pays a portion of the purchase price and contributes to the ongoing expenses. Then each owner gets a certain amount of scheduled use time with the RV.

Fractional ownership reduces up-front and maintenance costs and can make high-end RVs accessible for less money. It can also include professional management of the RV or storage.

However, you don’t have as much flexibility with this plan. You’ll need to schedule trips and use in advance. These ownership agreements can be complicated and involve legal contracts and detailed exit terms. Financing and insurance can also be more complex. This option is best for people who only want to use an RV for a few weeks a year and want the experience of RVing without the responsibility of maintaining one full-time.

RV financing can be a great way to enjoy road trips and sightseeing, or even full-time living, in an RV! But you’ll want to understand the different types of loans and the requirements for each type. Research lenders carefully and make sure you understand the terms and costs of any loan you’re considering. Check out our guidance to be sure you’re avoiding bad RV financing as you research your options for RV ownership. Also, consider loan pre-approval before you shop for an RV.

You can also rent an RV with RVshare to try it out before you commit to purchasing your own!

FAQs: RV Financing 101

What credit score do I need to finance an RV?

Most lenders look for a credit score of at least 650 to finance an RV, but you’ll get better rates and terms if your score is above 700. Some lenders may approve lower scores, but you’ll likely have a higher interest rate.

How long can you finance an RV?

RV loans can range from 5 to 20 years, depending on the lender and the RV’s price. Longer terms mean lower monthly payments but may result in higher total interest by the time you pay off your loan.

Is it harder to finance an RV than a car?

Yes. Because RVs are considered luxury items, are more expensive, and have longer loan periods, lenders may have stricter requirements, larger down payments, and longer approval processes than auto loans.

Can I finance a used RV?

Yes. In fact, used RVs are one of the most common purchases in the RV market. Many lenders offer used RV financing, although loan terms may be shorter and interest rates slightly higher compared to those for new RV loans.

Do I need insurance to finance an RV?

Yes. Lenders typically require full coverage RV insurance until the loan is paid off, much like auto loans require comprehensive coverage. This is because often, your RV is the collateral for the loan. Lenders want to make sure it stays in good shape in case they have to take it back.

What’s the average interest rate on an RV loan?

Interest rates vary by credit score, loan amount, and lender. Recent trends indicate that rates often range from 6% to 18%, with prime borrowers receiving the lowest offers.

Can I refinance my RV loan?

Yes. Refinancing can help you lower monthly payments, reduce interest rates, or adjust loan terms, especially if your credit score has improved since you first financed.

Is it possible to finance an RV with bad credit?

It is possible, but expect higher interest rates and stricter requirements. Some lenders and credit unions specialize in subprime RV loans, and a larger down payment can improve your approval chances.

What’s the minimum down payment for an RV loan?

Many lenders require a down payment of 10–20%, although requirements vary. A larger down payment can reduce monthly costs and improve your loan approval odds.

Should I finance an RV or pay cash?

It depends on your financial situation. Paying cash avoids interest costs, but financing allows for flexible budgeting and preserves your savings. Consider the total cost of your loan before you decide.