Refinancing a recreational vehicle loan means taking out a new loan to pay off your existing RV debt, usually at a lower interest rate or with different terms
When you refinance an RV, a new lender pays off what you owe to your current lender, and you begin making payments to the new lender instead. The goal is typically to reduce your monthly payment, lower your interest rate, or shorten the loan term. Unlike a personal loan or cash-out refinance on a house, RV refinancing is secured by the vehicle itself — the lender holds a lien on the RV until you pay off the loan.
The process takes two to four weeks from process to funding. You will need your current loan documents, proof of income, and the RV's title and registration. The new lender will order an appraisal to confirm the RV's value, because they will not lend more than the vehicle is worth. If your RV has dropped in value since you bought it, you may owe more than it is worth — a situation called being "upside down" — which can block refinancing at some lenders.
Key Takeaways
- Refinancing works best if your credit score has improved since you took out the original loan, because a higher score usually means a lower interest rate.
- Your RV's current value determines how much a lender will refinance; if you owe more than the RV is worth, most traditional lenders will decline.
- Banks, credit unions, and online lenders all offer RV refinancing, and rates and terms vary significantly between them.
- Prepayment penalties on your current loan can eat into your savings, so check your loan documents before you start the refinancing process.
When refinancing makes financial sense
Refinancing saves money when the interest rate on the new loan is lower than your current rate, or when you can extend the term to lower your monthly payment without paying significantly more interest overall. If you took out your original RV loan with a credit score below 650, and your score is now 700 or higher, you will likely may have access to for a better rate. Even a 1 or 2 percentage point drop in interest rate can save hundreds of dollars over the life of the loan.
Refinancing also makes sense if your financial situation has changed — you have a stable job now, you have paid down other debts, or you have a co-signer with good credit who can help you may have access to. Some borrowers refinance to switch from a variable-rate loan to a fixed rate, locking in predictability for the rest of the loan term.
Refinancing does not make sense if you have a prepayment penalty on your current loan and the penalty is large. Check your original loan documents for a clause that charges you a fee for paying off early. If the penalty is more than the interest you would save, refinancing costs you money. Similarly, if you are only a year or two away from paying off your current loan, the savings may not justify the closing costs and appraisal fees.
How to find RV refinancing lenders
Banks, credit unions, and online lenders all refinance RV loans. Credit unions often offer the lowest rates to members, so if you belong to one, start there — you do not have to bank with them to join many credit unions, and membership fees are usually under $50. Banks offer competitive rates if you have good credit and an existing relationship with them. Online lenders like LightStream, SoFi, and Upgrade have streamlined applications and can fund loans in as little as one business day, though their rates are typically higher than credit unions.
Specialized RV lenders like ExploreAmerica and RVLoan focus only on recreational vehicles and may be more flexible with older RVs or lower credit scores, but they usually charge higher rates to offset that risk. Get quotes from at least three lenders before deciding. Each lender will pull your credit report, which causes a small temporary dip in your score, but multiple inquiries within 14 days typically count as a single inquiry for scoring purposes.
When you request a quote, have your current loan balance, the RV's year and model, and your approximate credit score ready. Lenders will ask for proof of income — recent pay stubs, tax returns, or bank statements — and will order an appraisal. The appraisal usually costs $200 to $400 and is either paid upfront or rolled into the new loan.
What happens if your RV is worth less than you owe
If your RV has depreciated and you owe more than its current market value, most traditional lenders will decline to refinance. The gap between what you owe and what the RV is worth is called negative equity. For example, if you owe $35,000 but the RV is worth $30,000, you are $5,000 upside down.
A few options exist if you are in this situation. Some credit unions and online lenders will refinance the full amount you owe, accepting the negative equity as part of the loan. This means you will pay interest on the $5,000 gap, so it costs more over time, but it lowers your monthly payment. Other lenders require you to pay down the negative equity before they will refinance — you would need to bring $5,000 to closing to pay off the gap.
A third option is to wait until your RV's value rises or you pay down enough of the principal that you are no longer upside down. RV values can fluctuate based on age, condition, and market demand, so checking the value again in six months or a year may show improvement.
The refinancing process and approval process
Once you have chosen a lender, you will complete a formal process. Most lenders offer online applications that take 10 to 15 minutes. You will provide personal information, employment history, income, and details about the RV. The lender will order a credit report and an appraisal of the RV.
The appraisal typically takes three to seven business days. An appraiser will inspect the RV's condition, mileage, and mechanical systems, and will compare recent sales of similar models to determine fair market value. If the appraisal comes in lower than expected, the lender may offer you a lower loan amount or a higher interest rate to account for the lower value.
After the appraisal, the lender will issue a formal loan offer with the interest rate, monthly payment, and loan term. Review this carefully — it should match the quote you received. Once you accept, the lender will prepare closing documents. You will sign these documents (often electronically), and the lender will fund the loan. The new lender's attorney or title company will contact your current lender to obtain a payoff quote and will pay off the old loan from the new loan proceeds. This transfer of the lien from the old lender to the new one typically takes five to ten business days.
Costs and fees to expect
RV refinancing is not free. Common costs include an appraisal fee ($200 to $400), a title transfer or lien recording fee (varies by state, usually $50 to $150), and an origination fee charged by the lender (typically 1 to 3 percent of the loan amount). Some lenders advertise "no origination fee," but they may charge a higher interest rate to compensate.
A few lenders roll all fees into the loan balance, so you do not pay anything upfront. Others require you to pay fees at closing. Ask the lender upfront whether fees are included in the loan amount or due at signing. If you are refinancing to lower your payment, adding $500 to $1,000 in fees to the loan balance will reduce your savings, so factor that into your decision.
Check your current loan documents for a prepayment penalty. Some lenders charge a fee if you pay off the loan early — typically 1 to 2 percent of the remaining balance. If your current loan has a prepayment penalty, subtract that from your projected savings to see whether refinancing still makes sense.
How refinancing affects your credit score
Refinancing causes a temporary dip in your credit score because the lender pulls your credit report and you are opening a new loan account. The score usually recovers within a few months as you make on-time payments on the new loan. The old loan will show as "paid in full" or "closed," which does not hurt your score.
If you are planning to explore for a mortgage, car loan, or other major credit in the next few months, refinancing your RV now may not be ideal because the inquiry and new account will lower your score at a time when you need it to be high. If you can wait three to six months, your score will recover and you will be in a stronger position for other borrowing.
Frequently Asked Questions
Can I refinance an RV I still owe money on?
Yes. In fact, most RV refinancing happens while you still owe money on the original loan. The new lender pays off the old loan in full, and you begin making payments to the new lender. You cannot refinance if you own the RV outright with no lien, because lenders require the RV as collateral.
What credit score do I need to refinance an RV?
Most lenders require a credit score of at least 620, though rates are better at 700 or above. Credit unions and online lenders sometimes work with scores as low as 580, but they charge higher rates. If your score is below 620, adding a co-signer with better credit may help you may have access to.
How long does the refinancing process take?
From process to funding typically takes two to four weeks. The appraisal takes three to seven days, and the lender needs time to review your documents and prepare closing paperwork. Once you sign, funding can happen within one to three business days, though the title transfer to the new lender may take another five to ten days.
Will refinancing hurt my credit score?
Refinancing causes a small temporary dip because of the credit inquiry and new account. Your score usually recovers within three to six months as you make on-time payments. The benefit of a lower interest rate typically outweighs this short-term impact.
What if I want to refinance but my RV is very old?
Most lenders have an age limit — typically 15 to 20 years old — because older RVs depreciate quickly and are harder to sell if the borrower defaults. Specialized RV lenders and some credit unions are more flexible with older models. You may pay a higher interest rate, but refinancing is still possible if the RV is in good condition.