What an RV loan is and how it works

An RV loan is a secured loan from a bank, credit union, or specialty lender that you use to buy a camper or motorhome. The lender holds a lien on the vehicle itself — meaning they own it until you pay off the loan — which is why RV loans typically have lower interest rates than personal loans. You make monthly payments over a set term, usually 5 to 20 years depending on the lender and the price of the RV.

The process is similar to getting a car loan: you find an RV you want to buy, get pre-approved for financing, complete the purchase, and then make payments to the lender. Some dealerships offer financing directly, but you can also shop for loans separately from different lenders and bring that financing to any dealership or private seller.

RV loans differ from other types of loans because the vehicle serves as collateral. If you stop making payments, the lender can repossess the RV. This is why lenders care more about the condition and age of the vehicle than they do for unsecured loans, and why older or heavily used RVs may be harder to finance or come with higher rates.

Key Takeaways

  • RV loans are secured by the camper itself, so lenders offer lower rates than they would for personal loans, but the RV can be repossessed if you miss payments.
  • You can get pre-approved before shopping, which tells you how much you can borrow and locks in an interest rate for a set period.
  • Banks, credit unions, and specialty RV lenders all offer these loans, and rates and terms vary significantly between them.
  • Most RV loans run 5 to 20 years, and the older or more expensive the camper, the shorter the loan term a lender may offer.
  • Down payments typically range from 10 to 20 percent, though some lenders require more for used or older RVs.

Where to get an RV loan

Banks are the most common source, and most major banks offer RV financing. Your own bank may have better rates if you have an existing relationship with them, so start there. Credit unions often have lower rates than banks if you are a member, so check with yours even if you have not borrowed from them before.

Specialty RV lenders exist solely to finance campers and motorhomes. These include lenders like Northpointe Capital, RVLoan.com, and LendingClub, which sometimes have faster approval processes or more flexible terms for older RVs. Dealerships also offer financing directly, but their rates are often higher than what you can get elsewhere, so compare before accepting their offer.

Online lenders and marketplaces let you compare multiple offers at once. Bankrate, LendingTree, and Edmunds all have RV loan sections where you can enter your information once and see rates from several lenders. This takes 15 to 30 minutes and does not affect your credit score at this stage.

What lenders look at when deciding whether to approve you

Your credit score is the first thing lenders check. Most banks want a score of 650 or higher, though some credit unions and specialty lenders will work with scores as low as 580. The higher your score, the lower your interest rate will be. If your score is below 650, a credit union or specialty lender is more likely to approve you than a traditional bank.

Your debt-to-income ratio matters next. Lenders calculate this by dividing your total monthly debt payments (car loans, credit cards, student loans, mortgage) by your gross monthly income. Most lenders want this ratio to be 40 percent or lower, meaning your debts should not exceed 40 percent of what you earn before taxes. If you are close to that limit, paying down a credit card or car loan before explore can help.

The RV itself affects approval. Lenders want to know the year, make, model, mileage, and condition. Newer RVs are easier to finance than older ones — most lenders will finance RVs up to 10 or 15 years old, but some draw the line at 5 years. The price also matters: a $15,000 used camper is easier to finance than a $200,000 motorhome because the lender's risk is smaller.

Employment and income history round out the picture. Lenders want to see that you have been at your current job for at least two years, or that your income is otherwise stable. Self-employed borrowers usually need to provide two years of tax returns. Recent job changes or gaps in employment can slow approval or result in a higher rate.

How to prepare before you explore

Check your credit report first. You can get a free report from each of the three credit bureaus — Equifax, Experian, and TransUnion — once per year at AnnualCreditReport.com. Look for errors or accounts you do not recognize. If you find mistakes, dispute them with the bureau; this can take 30 to 45 days to resolve, so do this before you start shopping for an RV.

Gather your financial documents. Lenders will ask for recent pay stubs (usually the last two months), tax returns (usually the last two years), and a bank statement showing your savings. If you are self-employed, have a co-signer, or receive income from multiple sources, bring documentation for all of it. Having these ready speeds up the approval process.

Decide on a down payment amount. Most lenders want 10 to 20 percent down, though some specialty lenders accept as little as 5 percent. A larger down payment lowers your monthly payment and interest rate, and makes approval more likely. If you have the cash, putting down 20 percent is usually worth it.

Get pre-approved before you shop. Pre-approval means a lender has reviewed your finances and told you how much they will lend you and at what interest rate. This approval is usually good for 30 to 60 days. Pre-approval gives you a clear budget when you are looking at RVs and shows dealers that you are a serious buyer.

The steps to getting approved and closing the loan

Start by submitting a pre-approval process. You can do this online, by phone, or in person at a branch. The lender will pull your credit report (this does a small, temporary hit to your score) and ask about your income, employment, and debts. You will get a decision within one to three business days, and if approved, you will receive a pre-approval letter stating the loan amount and rate.

Find your RV and make an offer. Once you have found a camper you want, negotiate the price with the seller or dealership. The RV does not have to be from a dealership — you can buy from a private seller and bring your pre-approved financing to the sale. Have the RV inspected by a mechanic before you commit; lenders may require this anyway.

Submit your full process. Once you have a purchase agreement, give the lender the details of the RV: the VIN, year, make, model, mileage, and sale price. The lender will order an appraisal to confirm the RV is worth what you are paying. This appraisal usually takes five to ten business days and costs $300 to $600, which the lender may charge you or deduct from your loan.

Clear underwriting. The lender's underwriting team reviews your full process, the appraisal, and the purchase agreement to make sure everything matches and that you meet their requirements. They may ask for additional documents or clarification on your income or debts. This stage usually takes three to five business days.

Close the loan. Once underwriting approves you, the lender prepares closing documents. You will sign a promissory note (your promise to repay), a security agreement (giving the lender a lien on the RV), and other paperwork. The lender then sends the funds to the seller or dealership, and you take possession of the RV. Closing can happen in person, by mail, or electronically depending on the lender.

Understanding interest rates and loan terms

Interest rates for RV loans vary based on your credit score, the size of your down payment, the age and price of the RV, and the length of the loan. As of the time this article was written, rates for new RVs ranged from around 5 to 12 percent depending on these factors, and used RVs typically cost 1 to 3 percent more. Rates change constantly, so get quotes from multiple lenders to compare.

Loan terms — the length of time you have to repay — usually range from 5 to 20 years. A shorter term means higher monthly payments but less interest paid overall. A longer term means lower monthly payments but more interest. Most borrowers choose 10 to 15 years as a middle ground. Lenders may limit the term based on the age of the RV; a 10-year-old camper might only may have access to for a 10-year loan, for example.

Fixed-rate loans lock in the same interest rate for the entire loan term, so your payment never changes. Adjustable-rate loans start with a lower rate that increases after a set period. Fixed rates are more common for RV loans and easier to budget for, so they are usually the better choice unless you plan to sell or refinance the RV before the rate adjusts.

What happens after you close the loan

Your monthly payment begins on the date stated in your loan documents, usually 30 days after closing. You will receive a payment coupon book or online payment portal from the lender showing the amount due and where to send it. Set up automatic payments if possible to avoid missing a payment, which can damage your credit and trigger late fees.

You must maintain comprehensive and collision insurance on the RV for the life of the loan. The lender will require proof of insurance before closing and may check periodically that your coverage is still active. If your insurance lapses, the lender can buy insurance on your behalf and charge you for it, which is much more expensive than buying it yourself.

The lender holds the title to the RV until you pay off the loan. Once you make the final payment, the lender will release the lien and send you the title. You can then sell or trade the RV without the lender's permission. If you want to pay off the loan early, most lenders allow this without penalty, though confirm this in your loan documents.

Frequently Asked Questions

Can I get an RV loan if I have bad credit?

Yes, though your options are more limited and your interest rate will be higher. Credit unions and specialty RV lenders are more likely to work with credit scores below 650 than traditional banks. A larger down payment and a co-signer with better credit can also improve your chances of approval.

What is the difference between financing a new RV and a used one?

New RVs typically have lower interest rates and longer loan terms available because they hold their value better and have fewer mechanical risks. Used RVs cost more to finance — rates are usually 1 to 3 percent higher — and lenders may limit the loan term based on the RV's age. A 15-year-old camper might only may have access to for a 5-year loan, for example.

Do I have to buy insurance before closing the loan?

Yes. Lenders require proof of comprehensive and collision insurance before they will release the funds. Contact an insurance agent before your closing date and have them send proof of coverage directly to the lender. This usually takes one to two business days.

What if the RV is worth less than what I owe on the loan?

This is called being underwater on the loan. It can happen if the RV depreciates faster than you pay it down, or if you financed a used RV with a very long term. If you want to sell or trade the RV, you will owe the difference out of pocket. To avoid this, put down at least 20 percent and choose a loan term no longer than the RV's expected useful life.

Can I refinance my RV loan later?

Yes. If your credit score improves or interest rates drop, you can refinance to a lower rate or shorter term. Refinancing involves explore for a new loan to pay off the old one, so you will go through underwriting again. Make sure the savings from a lower rate outweigh any new fees the lender charges.