The day you purchase a home, whether it’s your first or your fifth, is an exciting yet anxiety-ridden day. You have a new place to live, but you have the responsibility of paying for that home. An RV is a home for full-timers and a home away from home for many others.
Choosing to purchase an RV – new or used, Class A or camper van – is a big financial decision. You want to make sure that it will be used so that you see the value of your investment. Financing may be arranged at your RV dealership – just ask the sales staff if the service is offered.
In this article, we’ll discuss the process of requesting an RV loan so that you know what you can expect.
Are loan rates different if buying from a private party versus buying from a dealer?
No, the rate depends on the requested loan amount, the loan term, value of the RV, and your credit score, among other variables.
Are loan rates different if an RV is used or new?
They can be, depending on the age of the RV. Older RVs can actually have higher interest rates.
What is the difference between a fixed rate and a variable rate?
Just like a home, a fixed rate loan is one in which the payment (principal and interest) are the same from month to month. Variable loans are subject to change over time. The term of your loan also affects your rate. Shorter term loans, such as 60 months or less, may have an APR of 3.99% while a loan of 20 years may be 4.5%. You’ll pay more interest over the length of a longer loan.
Is an inspection needed prior to being approved for a loan?
Banks and credit unions sometimes stipulate that an inspection and/or appraisal is needed if a motorhome or towable is larger and more expensive – and you need a higher loan amount and/or the RV is a certain age. If you are buying from a private party, your lender may require an inspection.
Is a down payment necessary?
It depends on the institution as well as the dealer. Many require a certain percentage down. However, making a down payment can help reduce your interest rate as well as how much you spend over the long term. It also shows that you are capable of meeting your payments.
Is a loan necessary for every type of RV?
This depends on whether you need financing in the first place. RV loans are considered consumer loans. Banks have minimum and maximum loan amounts. For instance, one bank may require a minimum of $10,000 while another may only require $5,000. The amount you wish to finance may affect the fixed starting rate/APR.
What information does a lender need?
A lender will need to know how much you are requesting, if you’re planning on putting money down, your social security number, current employment and gross monthly income (and any other income), employment history, RV specs, potentially a W-2 or pay stub to verify employment, potentially recent tax returns if self-employed, and potentially a copy of the sales contract or purchase order from the owner or dealer from whom you are purchasing the RV from. Your credit score will also be run and will be an important component in the lender’s consideration. Whether you’re going through a major bank or a local credit union, the individual assigned to help you manage this transaction will be able to offer direction as to what is needed for that particular institution to approve you for the loan.
Is RV loan interest tax-deductible?
According to Turbo Tax, you can deduct interest you pay toward your home as well as a second home: “A second home can include any other residence you own and treat as a second home and can be a mobile home, house trailer, recreation vehicle, or houseboat that has sleeping, cooking, and toilet facilities.”
What about discounts?
If you do your personal banking or have another loan through a credit union, you may be eligible for rewards or discounts through that institution.
MARVAC Members Who Can Assist You
| Financial | Ally Financial | Mr. Mike Rapp |
| Financial | Community Choice Credit Union | Mr. Mike Spence |
| Financial | FirstMerit Bank | Mr. Richard Beattie |
| Financial | LOC Federal Credit Union | Ms. Shaya McArthur |
| Financial | Medallion Bank | Aubree Madsen |
| Financial | Fifth Third Bank | Mr. Jody Promer |
| Insurance | Barrett & Associates, Inc. | Mr. Mark E. Barrett |