RVs are a great way to experience the outdoors while enjoying all of the comforts of home. However, purchasing an RV can be expensive and it is important to understand how interest rates and loan terms can impact the overall cost of your vehicle. In this article, we will discuss how RV loan interest rates differ from other consumer loans and what you can do to lower your rate.
Most RVs are purchased through financing. The process is similar to a car loan and you will likely need to meet credit score, annual income, and collateral requirements. It is important to compare multiple lenders and pre-qualify for a loan to get an accurate idea of what you will be paying each month.
The most common RV loans are secured, which require the lender to use your RV as collateral in case you are unable to repay the loan. In addition to providing a sense of security, these types of loans usually offer better rates than personal unsecured loans. They can also provide a higher loan amount than unsecured loans, depending on your lender and financial profile.
Secured RV loan interest rates can start at around 7 percent for borrowers with excellent credit and go up to 36 percent or more for those with fair or poor credit. In order to lower your rates, you can consider making a larger down payment and working to improve your credit. When shopping for an RV loan, it is a good idea to apply with several lenders and compare offers. The credit bureaus allow a window of 14 days in which to make multiple applications without negatively affecting your score.
There are many different types of RV financing, including dealer financing, private bank RV lending, and online RV lenders. Oftentimes, RV dealerships will offer in-house financing and may be able to offer you discounts or perks that you would not be able to find elsewhere. In addition, local banks and credit unions may offer RV financing with rates and terms based on your banking relationship.
When looking for an RV, you will want to consider the maximum loan amount as well as the interest rates and terms offered by each lender. It is also important to make sure that you can afford the monthly payments, which should be included in your budget. When calculating your budget, you will need to take into account the monthly loan payments as well as any other fees and charges that may be associated with an RV purchase.