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How to finance a recreational vehicle: RV loans, alternatives and tips for getting out on the open road

How to finance a recreational vehicle (Halfpoint Images via Getty Images)

You’ve said goodbye to your 9 to 5 and you finally have the time to travel the country. A recreational vehicle in retirement can be a great tool for snowbirding or leisurely summer vacations, but it’s a big investment. An RV can set you back between $14,000 to more than $750,000 — and that’s not including ongoing costs like maintenance, gas or insurance.

RV loans are a common way to finance these kinds of expenses, but don’t overlook financing alternatives that could end up being a better deal on a loan of this size.

An RV loan is a secured loan that uses the RV you’re purchasing as collateral. These work similar to a car loan, in that the rates and terms you receive typically depend on the RV you buy, in addition to your personal finances. And you’ll typically need to make a down payment of 10% to 20%.

RV loans tend to start at $5,000 or $10,000 and can run into the millions with terms from 5 to 20 years.

The average rate for an RV loan for borrowers with good credit was 11.45% in May 2024, according to online marketplace LendingTree. Borrowers with excellent credit scores qualified for an average rate of 8.29%.

There’s no one type of recreational vehicle, and so it’s a good idea to know the lingo when shopping for your next rig or a loan to cover it.

Here are “classes” you’re likely to bump into:

  • Class A motorhome. These luxury RVs are the largest, spanning up to 45 feet and including homelike amenities like multiple bedrooms or bathrooms, high-end appliances and slideouts that create more room in minutes. Class A motorhomes tend to have a higher resale value than other types of RVs.

  • Class B motorhomes. Class Bs are your campervans or conversion vans that can include marine showers, small kitchens and cooktops for meals on the road. These are the vehicles of choice for those living the vanlife. They tend to cost less to buy and maintain than other classes.

  • Class C motorhomes. These are the classic bunk-over-cab vehicles that can be larger than Class Bs but offer some of the comforts of a Class A motorhome, like spacious living areas and full toilets and showers. They are less pricey than Class As but more expensive than Class Bs.

  • Travel trailers. Also called bumper-pull trailers, these are economical trailers that are easy to move, connecting to a car or truck with a standard hitch. They’re ideal for campers who like room to stretch out and conveniences like a sink and toilet.

  • Pop-up campers. Smaller than a travel trailer, pop-up campers are more lightweight trailers that can come with showers, toilets, sinks and cooktops. A benefit of the pop-up is the ability to fold it down into a compact trailer for hitching to a car.

RV loans are typically available directly through an RV dealership or a third-party lender. Third-party lenders include banks, credit unions and companies that specialize in recreational vehicle financing. Which type of lender you choose depends on how you want to approach the buying process.

With dealership financing, you pick your RV first and then apply for a loan through one of its partner lenders. If you apply for a loan with a third-party lender, you’ll have an idea of what you can qualify for before you have your heart set on a rig. If approved, you’ll receive a preapproval offer that you can use to shop around — though some third-party lenders may limit where you can spend the funds. For example, a U.S. Bank RV loan preapproval is only valid at participating dealerships. Once you decide on a vehicle, you’ll sign the loan agreement, and the RV is yours.

It’s worth shopping around different lenders to get a sense of what’s available to you. This might require you to apply for multiple loans — which would normally hurt your credit score. However, as long as you keep your applications within a period of 14 to 45 days, credit bureaus will only count it as one hard credit check on your report.

RV financing can be more difficult to qualify for than other auto loans because it’s a luxury product that comes with additional monthly expenses.

You generally need to meet the following requirements to get an RV loan:

  • Good or excellent credit score of at least 660, though the most competitive rates tend to go to borrowers with credit scores of 720 or higher.

  • Down payment of 10% to 20% — or at least $14,000 for an inexpensive model.

  • Proof of income from a regular source to cover your monthly payments.

You can still get an RV loan if you’re no longer working full time, as long as you’re receiving enough regular income from other sources. In fact, it’s illegal for lenders to discount common sources of income during retirement when you’re applying for a loan, such as pensions, Social Security or other retirement benefits. But if you earn the bulk of your money from contract work, it may be difficult to qualify if that income is irregular.

If you have trouble qualifying for a traditional RV loan, it may be tempting to use a service like My Financing USA to help you find a lender. But beware: Lenders that specialize in helping folks with less-than-perfect credit tend to offer higher rates and fees than your typical RV loan. Consider taking steps to improve your credit score before signing up for a more costly option — especially during the current economic environment of elevated interest rates.

If you have trouble getting approved due to a one-time incident — such as a divorce or medical emergency — consider applying in person at a bank or credit union instead. That way, you’ll have a chance to explain your situation.

RV loans aren’t the only way to pay for a recreational vehicle. Here are three alternatives you may want to consider before you apply for RV financing.

Homeowners who aren’t interested in going all-in on the RV life may also want to consider financing that uses their current home’s equity.

Home equity loans and HELOCs in particular may help you find lower rates than you would through an RV loan provider. For example, the average home equity loan rate was 8.60% in July 2024, while the average HELOC rate was 9.17%, according to Bankrate.

It’s true that it’s only slightly lower than the average RV loan rate. But with a loan of this size, even a small rate discount can spell significant savings.

Personal loans don’t require collateral, which means that you don’t risk losing your RV or home if you default. These types of loans can be helpful if you want to buy from a private seller who prefers to deal in cash or you don’t have a down payment on hand.

However, personal loans may only work to finance less-expensive vehicles — think campers rather than class A motorhomes. It’s difficult to find a lender that offers more than $100,000, and many cap loans at $50,000. Terms also rarely exceed 10 years, which could bump up your monthly cost on the higher end. Rates are also higher, since unsecured loans pose more of a risk to the lender than secured options. For example, the average personal loan rate was 12.2%, according to a May 15 Bankrate study.

Buying an RV outright might not be the best choice for all retirees — especially if you plan to use it only a few weeks out of the year. The average cost of renting an RV in 2024 is $183 a night, according to Go RV Rentals, though it depends on the type of RV. A pop-up camper can go for as little as $89 a night, while a Class A motorhome will set you back around $306 a night. Costs also vary by season and location.

Many rental companies require you to rent RVs for a minimum of three days but typically offer a discount if you rent for a week or longer. Discounts may range from 10% to 15% off, or a free day, depending on the company.

RV life is a big investment and isn’t for everyone. Here are some costs and annoyances that you may want to consider before you decide to buy.

  1. Modifications will set you back. It can cost tens of thousands of dollars to change the decor, upgrade siding or change any other aspect of your vehicle to make it feel like home — especially if you’re buying used.

  2. Gas costs are high. Don’t expect the same mileage as your car, with MPG dipping into the single digits for larger RVs.

  3. Expect depreciation. Unlike a house, RVs tend to decrease in value with time. With high loan amounts and long terms, this means there’s a chance your RV loan could go underwater — meaning you owe more than what it’s worth.

  4. Maintenance can be costly. Fixes are difficult to plan for and range from only a few hundred dollars for minor repairs to more than $30,000 to replace something like the engine or transmission, in some cases.

  5. Accessing health care isn’t as easy on the road. That’s because many insurance policies are designed to serve a specific region or state of residency. You’ll need to look for a broad provider network that spans multiple states.

  6. Driving an RV can be a challenge. Blind spots are large, clearance may be an issue and some turns can be difficult to wrangle. Consider signing up for an RV driving class before your first big trip.

  7. Waste disposal is your responsibility. You’ll need to keep an eye on waste levels and regularly dump your sewage at a designated station.

  8. Loneliness can be an issue. The RV life might feel isolating at times, especially for retirees who live in their rig year-round. You’ll need to make extra effort to keep in touch with friends, family and community.

  9. Personal space is limited. Cramped living can put a strain on your relationships with your spouse or family if you’re not used to being together all the time.

Anna Serio-Ali is a trusted personal finance expert who specializes in consumer and business financing. A former certified commercial loan officer, Anna's written and edited more than a thousand articles to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in Business Insider, CNBC, Nasdaq and ValueWalk, among other publications, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020 for her work at Finder.