RV lenders usually require a down payment of 10 percent to 20 percent for people who have good credit. If you have poor credit, expect to make up to a 25 percent down payment. The majority of RV buyers pay off their loans in a timely manner, which makes lenders more prone to offering financing. According to Frommer's Exploring America by RV, "only 1.39 percent of all RV loans are delinquent."
Length of RV Loans
Because of the high price of RVs, loans are offered for longer terms than car loans. Typically, 20-year terms are offered for loans that are $100,000 and above, 15-year terms are offered for loans under $25,000 to $100,000 and five-year terms are offered for loans under $25,000.
Apply for financing at your bank or credit union before you go shopping for an RV so you can know how much vehicle you can afford. A pre-approved loan gives you the option of purchasing an RV from a private party or from a dealership. Even though most RV dealerships offer financing, having a pre-approved loan gives you the upper hand. If the dealership wants to offer you a loan, the salesman will have to beat the interest rates and other terms of your pre-approved loan.
RV dealers have an established relationship with lenders and have the experience needed to get you approved for a loan. They may be able to offer you lower interest rates than a bank or credit union, but dealership loans often have loan fees. If the dealership offers you a loan, read the contract carefully to find hidden fees that can make the loan more expensive than a bank loan in the end.
Weighing the Costs
Once approved for a loan, total the costs of the monthly loan payments and the monthly RV insurance payments to decide how expensive an RV you can afford. If the total payments reach the high end of what you can afford, you might want to consider a cheaper RV. You want to make sure that you have enough money left over after your monthly payments to enjoy your RV. Remember, you will have to pay for gas, maintenance and campground fees and, possibly, storage. One factor to consider when deciding affordability is taxes. The IRS considers RVs that contain sleeping facilities, bathroom facilities and kitchen facilities to be homes, making the loan interest payments tax deductible. Check with your accountant to see how an RV loan will affect your taxes.
Research the different makes and models of RVs before you go shopping. Knowing what you want ahead of time will help you to get the right RV for your travel needs.
Check the blue book value on an RV before you buy it. It is not unheard of for RV dealerships and private sellers alike to put an excessively high sales price on an RV.