How Does RV Financing Work?

Just like a car or a house, you can also finance the purchase of an RV. Paying cash for an affordable RV isn’t always the best idea. RV loans offer longer terms that allow you to make a reasonable monthly payment. For those without briefcases of money lying around, financing an RV just makes good financial sense. 

But financing a motorhome or travel trailer isn’t the same as a car or home. Watch Ian Baker’s quick video breakdown above to learn how the process differs. Or, browse these frequently asked questions about RV financing to bolster your understanding. 

How Does the RV Financing Process Work?

There are typically four simple steps required to finance your RV: 

1. Select your desired RV and evaluate the loan terms offered for that unit.
2. Apply for financing and receive a credit decision.
3. Sign your loan documents and receive funding.
4. Complete title and registration applications with your state’s vehicle service.

When you finance with Camping World, our financing experts will help you through each of these steps to ensure you understand the process and aren’t surprised by any unexpected expenses. 

Is an RV Loan Like a Car Loan?

Getting a loan for an RV is more like getting a loan for a house than a car. RV loans generally have longer terms, sometimes up to 20 years. Thankfully, RV loans require far less paperwork than buying a home and also have fewer requirements. 

For example, you won’t have to freeze spending for 30 days or provide your last two years of pay stubs. The transaction is typically quicker, and a dealer like Camping World will get offers from multiple lenders to find you the most competitive rates possible. 

Apply for financing if you’re ready to purchase an RV.  

How Much Can I Borrow?

How much you borrow is directly related to factors like the cost of your RV, your credit, and how much you can offer as a down payment. RV loans generally start around $5,000 but can easily be secured for six-digit amounts. Other factors impacting your ability to borrow for an RV include your annual income, credit-to-debt ratio, and how much you’re willing to spend on a monthly payment. 

Will I Need a Down Payment?

Down payments are recommended for any large purchase. Putting down around 20% of the purchase price upfront looks good to lenders and will help you negotiate a better long-term interest rate. Some lenders will accept only 10% down, and you can occasionally find seasonal promotions where you can purchase an RV without even putting that much down. Generally, the higher your down payment, the lower your monthly payment. 

How Long Are RV Financing Terms?

The length of a loan is an agreement between you and the lender, factoring in the amount of your loan and your credit history. Most loan terms fall between 10 and 15 years but can certainly be shorter or longer, depending on how much you intend to pay monthly. You’ll find loan terms as short as four years and as long as 20 years for recreational vehicles. The more you finance, the more options you’ll have.

What Kind of Loans Can I Get to Finance My RV?

RV loans fall into two categories: 

Secured RV Loans

Secured loans are backed by some form of security, such as the RV itself. With these loans, it’s possible to borrow more money for a longer term, but you run the risk of having your RV repossessed should you miss a payment or two. You can also deduct interest on a secured loan from your federal taxes. 

Unsecured RV Loans

You can think of unsecured loans as the fast lane to RV financing. Loan applications are typically approved faster because they skip the step of providing security. You can “Prequalify” for an unsecured loan, but since there’s no built-in security or collateral, rates on unsecured loans are almost always higher than secured loans. 

Where Can I Get an RV Loan?

Exploring RV loan rates and terms from different financial institutions is certainly an option for anyone looking for RV financing. However, getting all the information you need can be time-consuming and exhausting by going from bank to bank individually.

RV dealers typically negotiate directly with preferred lenders on your behalf to find you the most competitive rates possible. With hundreds of nationwide locations, Camping World finances in all 50 states. Get pre-approved for a loan with our quick financing application. 

How Are The RV Financing Rates?

RV financing rates fluctuate just like rates for home or auto loans. A dealer like Camping World is a great resource for intel on current rates and loan terms. Even if they can’t give you a specific rate before applying for financing, many can offer an approximate range to understand the current financing landscape better. 

If you’re looking to finance an RV, it’s also a good time to check your credit score, as it’s a big factor in determining your loan rates and the size of your down payment. As you might expect, high credit scores get better rates. Low credit scores will be expected to pay a larger down payment and deal with higher rates. Improve your credit score by paying your RV loan on time, every time.

Can the Interest on My RV Loan Be a Tax Reduction?

Camping lovers we are, but tax experts we are not. We suggest you consult a professional CPA if you have specific questions about tax deductions for you and your portfolio. Tax laws and rules can often change from year to year and may also differ for state taxes depending on where you live. However, there’s good news for RVers who use their RV as a second home or home office. Your RV can be deducted for these purposes. 

Learn more about these important RV tax benefits.

What If I Want to Pay Cash?

I paid cash for my first camper trailer, but in retrospect, it may not have been the smartest idea. My first RV, a vintage Airstream, ended up requiring a host of unexpected expenses, which quickly dug into my travel budget. Had I financed, I wouldn’t have felt that pinch as much and could have spread the expenses out over time.  

My own anecdote, and most sound financial advice, says that it’s smart to keep cash on hand if you can. You may need that cash for something unexpected, but ideally, you can invest or bank the cash so it accrues interest over time. That said, most dealerships won’t turn you down if you intend to pay cash for your RV.

What’s Included When I Finance My RV?

Most dealerships will offer certain benefits when you finance an RV. Some of these benefits come in the form of service plans or insurance coverages that you can add to the price of your RV. Some may be free for a specified period after your purchase but require a service plan renewal after that period. 

Here are a few examples: 

• Good Sam Roadside Assistance 
• An Extended Service Plan 
• Tire and Wheel Protection 
• Gap Insurance 
• Paint and Fabric Protection  

More than these benefits, you may also find some dealerships that cover title and tag fees within your RV financing deal. Always ask for a full breakdown of what is included. If you’re wondering what else to ask, take a look at our 5 things to ask an RV Salesman.

If you have more questions about financing, selling, or trading in an RV, please contact us at Camping World. The Good Sam Finance Center is also a great resource for interested buyers. We are ready and waiting to help you get on the road to outdoor adventure.

What more would you like to know about RV financing? Let us know in the comments below.