Auto Loan
Cheap RV loans for 2025
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Key Takeaways
An RV, referred to as a recreational vehicle, is a hybrid vehicle between a car and a house. The cost of an RV varies by model and make. For instance, you can buy smaller travel trailers for less money than larger RVs, which can cost anywhere between $60,000-$1 million. In addition to the sticker price, you'll also need to keep money aside for gas, maintenance, and insurance.
If you're planning to buy an RV, you might need an RV loan to finance the deal. But be aware that not all banks provide funding for RVs, and those that do frequently have strict loan limitations with both vehicle and borrower requirements. But you may be able to finance the cost of an RV with the help of RV loans.
Low rates, flexible term spans, and variable loan amounts are features of the finest RV loans. In addition, they cover a wide variety of RV models. As a result, RV loans are available to help customers finance these substantial, unusual purchases as they are more expensive. With such a substantial investment, it's critical to understand how RV loans function and any potential downsides.
For borrowers with excellent credit, the current average RV loan rate ranges from around 4.54 percent to 11.94 percent. However, your interest rate will probably be significantly higher if you have bad credit (FICO score below 580).
Are you looking for the best RV loan rates? Which is the best financing for RV? Keep reading to know about some things before buying an RV loan.
An RV loan is a special loan that helps you finance the purchase of a recreational vehicle. Motorhomes, travel trailers, pop-up camps, fifth-wheels, and in certain cases, even horse trailers are often eligible for RV loans. Various customers may qualify for RV loans from different lenders. For instance, some people use their RVs for full-time habitation, while others use them occasionally. To find the best lender, you must decide how you use the RV and the type of lender who finances it.
The difference between secured and unsecured RV loans is the most important factor. Secured RV loans use collateral to guarantee the loan; in this case, that collateral is the RV itself. On the other hand, unsecured RV loans don't demand collateral.
Even though RV loans are primarily for purchasing or refinancing recreational vehicles, they function similarly to any other consumer loan. A financial institution or lender provides funds for the purchase over a certain period, and you repay the money with interest. In addition, RV loans are secured loans, meaning it typically serves as collateral.
Once you decide on a lender, you will fill out an application and, if authorized, sign an agreement describing the loan's terms. The ideal lender depends on your RV's type and trailer design. Not all lenders will finance all RV models. If you intend to live in your RV full-time, you must inform your lender.
Lenders frequently provide longer terms for RV loans than auto loans since recreational vehicles are more expensive than standard cars and trucks. Some lenders offer you 20 years. You can get a shorter period if you're ready to pay higher monthly payments.
For instance, USAA offers periods as short as 12 months, whereas LightStream offers a period between 24-84 months. As a result, you'll pay less interest throughout the loan if you can pay for the loan under these shorter terms.
Currently, average RV loan rates for customers with a good credit score ranges from 4.54% to 11.94%. Therefore, expecting a higher interest rate is fair if you have a poor credit score. In this situation, think about setting aside more money for a down payment while simultaneously working to improve your credit score. These are the rates, periods, and loan minimums as of March 2023.
| Lender | Interest rate | Period | Loan minimum | Best for |
|---|---|---|---|---|
| LightStream | 6.99%–13.89% | 24-144 months | $5,000 | Overall |
| Upgrade | 7.99%–35.99% | 24-84 months | $1,000 | Quick funding |
| SoFi | 8.99%–29.49% | 24-84 months | $5,000 | Flexible repayment terms |
| Prosper | 8.99%–35.99% | 36-60 months | $2,000 | Borrowers with high credit |
| Upstart | 6.70%–35.99% | Not disclosed | $1,000 | Borrowers with no credit |
| Best Egg | 6.99%–35.99% | Not disclosed | $2,000 | For low minimum rates |
| GreatRVloan.com | From 5.99% | 60-240 months | $10,000 | Bad credit RV loans |
Use our loan calculator to see how much you might need to borrow and your monthly payments when buying an RV.
Like repayment terms, the annual percentage rate for RV loans differs. The APR for an unsecured RV loan will be around between 6.05%-36.05%. The average unsecured interest rates are the following based on your credit score.
| Credit | Score | Valued APR |
|---|---|---|
| Excellent | 720-850 | 10.73%-12.50% |
| Good | 690-719 | 13.50%-15.50% |
| Fair | 630-689 | 17.80%-19.90% |
| Bad | 300-629 | 28.50%-32.00% |
Your financing rate may be greater if you get approved for an RV loan than a car loan. It is because RVs are considered luxury goods, and lenders are less likely to provide money for them since they are considered disposable during a financial crisis. In most cases, lenders also demand that your RV serve as collateral.
Ensure to check your credit score to find out what kind of rates you might get from lenders. Lenders evaluate your credit level risk using credit ratings, typically FICO scores. They will also consider your debt-to-income ratio, calculated by dividing your monthly payments by your gross monthly income. Most lenders demand a debt-to-income ratio of around 40%; however, some may allow one as high as 50%.
Use lending markets that let you submit a single application to receive bids from various lenders if you want various quotes. It makes it simpler to fix which terms you are eligible for and select the suitable offer for your needs. Before choosing a lender, you should consider pre-qualifying with a few different ones.
Also, the lender will want to know basic details about the RV you plan to buy. For instance, you must provide information about the RV's price, age, and miles. Although purchasing a used RV can save you money upfront, it typically has higher loan rates and may require frequent maintenance.
Most lenders let you pre-qualify if you buy an RV loan from them instead of financing through the dealership. You can do this to view the terms you qualify for without damaging your credit. To evaluate your qualifications, the lender will run a minor credit check on you. Then, of course, when you formally apply, there will be a hard credit check. Still, pre-qualifying enables you to learn more about the terms of a particular lender before buying a loan from them.
The majority of lenders require proof of insurance before providing a loan. Ensure to get enough coverage from your insurer to satisfy the lender's demands by speaking with them. Keep a budget for insurance payments since they will also increase your monthly expenses. When evaluating costs, consider the top RV insurance providers.
Are you looking for the best RV loan rates? Then consider these factors.
Are you looking for the best RV lenders? There are two options from where you can get one.
Though both loans offer finance for wheeled purchases, there are some differences between car and RV loans. For instance, fifth-wheel trailers and other trailer-style vehicles without their engines may be eligible for RV loans. RV loans also provide significantly larger loan amounts, which is crucial because RVs are often expensive. Some RVs can cost you millions of dollars. A regular auto lender may not agree to provide such a huge amount.
Also, auto lenders often don't consider how frequently you use your RV when approving you for a loan. RV lenders frequently disqualify specific borrowers based on whether they intend to use the RV full-time or part-time.
An RV is an expensive buy. With such a substantial investment, it's crucial to understand how RV loans function and any possible difficulties associated with RV finance. So, before looking around for RV loans, keep these five points in mind.
You may need to use your RV as collateral: Similar to auto loans, many RV loans are backed by the actual vehicle. So the car serves as collateral to secure the loan. Therefore, the lender may take back the RV if you don't make the monthly payments on time.
Different types of lenders offer RV loans: Although some lenders have financing with dealers, you don't have to get an RV loan in this manner. RV loans are also available from a few banks, credit unions, and online lenders. Compare quotes from several lenders to ensure you buy the most affordable RV loan.
Qualifying for a loan can be a challenge: The fact is that getting RV finance could be more challenging than auto loan approval. Depending on the length of your loan period and the amount you're borrowing, meeting the necessities for an RV loan may be similar to meeting the requirements for a home mortgage. The debt-to-income ratio, employment history, and income are just a few other factors that lenders may consider. But some lenders even offer RV loans for people with bad credit. You may not get an RV loan if you have debt or no income.
You could pay a lot in interest: APRs, or interest rates, for some RV loans can range from 4%-18%. Various factors affect the interest rates, like the lender, your credit, the amount borrowed, the down payment, and the loan period. A longer loan term means one must pay interest for a longer period. Many lenders provide loan terms of up to 10-15 years, but some may let you repay your loan for 20 years or longer.
You may end up owing more than the RV is worth: You must pay a down payment to qualify for an RV loan. While some lenders may advise a 20% down payment, others might require 10%. In addition, certain lenders will offer a loan even without a down payment. But be aware that if you pay a lower down payment, your loan balance may end up being higher than the value of the RV. Also, RVs can lose value quickly, particularly if you purchase a brand-new one. A value of a brand-new RV may depreciate up to 20% in the first year of ownership. So you might not be able to recover enough money to pay off your loan if you want to sell or trade off your RV in the future.
Buying an RV will drain your wallet. When financing an RV, there are many loan options to pick from. You must choose a lender depending on your financial situation and how you intend to use the RV. An ideal lender offers large loan amounts, low rates, or quick funding. So, get quotes from multiple lenders to buy the cheapest loan amount. Also, a large down payment can lower your RV loan interest rate and loan period. Buying a secondhand RV can decrease the buying cost substantially, but always consider factors like maintenance costs.
The price of a four-wheeler can vary a lot depending on many different things. An ATV will cost between $5,000 and $15,000 on average. A new ATV costs about $8,250 on average, based on new models from top manufacturers.
Traditional ATV loans are available from banks and credit unions for set periods of time, usually between 3 and 6 years, with fixed annual percentage rates. The APR will depend on your credit score, the length of the loan, how much the ATV costs, and who is paying for the loan.
Many ATV loans require you to have a credit score of at least 640. But people with scores as low as 600 can still get loans.
For ATV loans, the average rates for new car loans are 3.51% and the average rates for used car loans are 5.38%. It’s always better to use an online calculator to get accurate results.
In short, NO. A pre-approval involves a "soft inquiry," which doesn't affect your credit score. The soft inquiry is just a way for lenders to see if you might be eligible for their credit card offer.