How to finance an RV purchase

If your family dreams of open-road adventures in a new recreational vehicle, but you’re unsure how to pay for that fifth wheel or pop-up camper, consider an RV loan.

RV loans can be unsecured personal loans that you get from online lenders, or secured vehicle loans from banks and credit unions. Rates and terms vary by lender, and the rate you receive will depend on your credit score and income, the age of the vehicle, and if the loan is secured by the RV, or unsecured.

Before hitting the road, consider that most financial experts don’t recommend taking a personal loan for discretionary purchases. So unless you’re going to live in your RV, carefully consider the costs of financing — including monthly payments that you may owe longer than the life of the vehicle. If you do take a loan, have a solid plan to pay it off.

Here’s where to find RV loans, how to calculate the costs and questions to ask before you take a loan.

Where to get an RV loan

When comparing RV loans, use the loan’s annual percentage rate, which includes the interest rate and fees. The loan with the lowest APR is the least expensive.

Online lenders

RV loans from online lenders are typically unsecured and quick to fund, and you can pre-qualify to check your rate with no impact to your credit score.

LightStream offers unsecured personal loans for RVs or trailers priced up to $100,000, with funding as fast as the same day. APRs start at 4.29% for borrowers with excellent credit (720 to 850 FICO) and include a small discount for automatic payments.

Marcus personal loans can be used for any purpose, including RVs. Its maximum loan amount is $40,000, and APRs start around 6% for good-credit borrowers.

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Banks

Banks have competitive rates and terms for RV loans. They typically don’t offer pre-qualification and may require an in-person visit to apply.

Wells Fargo provides secured vehicle financing up to $100,000, including RV loans for campers, motorhomes and travel trailers, with funding in one to two business days. Rate discounts are available for setting up automatic payments from a Wells Fargo checking account, and for being a Wells Fargo customer.

U.S. Bank offers secured loans from $5,000 to $150,000 for new or used RVs, travel trailers, pop-up campers and truck campers. You can apply online, by phone or at a branch.

U.S. Bank also provides secured RV loans through dealerships, with loan amounts from $10,000 to $500,000 and repayment terms of up to 20 years. However, the bank may require a down payment of at least 10% on dealer loans.

USAA is a financial services company serving members of the military and their families. It offers secured RV loans for motorhomes, pop-up campers, fifth-wheel RVs, campers and trailers. APRs start at 5.49% for borrowers with excellent credit.

Credit unions

Credit unions are nonprofit organizations serving members who live or work in a particular area or are associated with a certain group. Potential benefits may include lower rates for borrowers with fair or bad credit.

First Tech Federal Credit Union offers secured loans from $1,500 to $300,000 for new and used RVs (up to 10 years old), campers and travel trailers. Rates start at 5.34% APR and are slightly higher for older models.

Navy Federal Credit Union members can apply for secured loans up to $500,000 for campers and RVs, with rates starting at 8.09% APR.

Financing your RV: Unsecured loans vs. secured vehicle loans

RV loans, whether unsecured or secured, are repaid in fixed monthly installments, typically over a period of two to 20 years. Compare the potential benefits of financing an RV with an unsecured personal loan or a secured vehicle loan.

Pros of unsecured loans

Pre-qualification: Online lenders allow you to pre-qualify for a personal loan, and to compare your potential rates and loan terms with no impact to your credit score.

Fast time to funding: Online loans can be funded as fast as the same day, depending on how quickly you submit the required documents.

Less risk: You may not lose your RV if you fail to repay an unsecured personal loan (although there are still consequences to defaulting).

Pros of secured vehicle loan

Lower rates: Some secured vehicle loans may have lower rates than unsecured loans, as the loan is guaranteed by collateral.

Approval for bad credit: Lenders may be more willing to approve your loan request if you secure the loan with the RV.

Larger loan amounts: You may also be able to finance a larger RV purchase.

RV loans: Questions to ask yourself before applying

What is the RV’s true cost? Factor in expenses such as gas, RV insurance, storage, sales tax, repairs and maintenance to determine the RV’s total cost.

These costs should fit within a budget that covers your needs, wants, savings and debt payments. Aim to keep savings and loan payments at 20% or less of your income.

Should I build my credit score first? Credit score is a major factor in loan approval, and it impacts your rate and loan terms. Consider building your credit score before applying for an RV loan.

Can I rent an RV instead? Renting an RV may be a faster and more affordable way to get on the road. It also lets you test out a vehicle before committing to a purchase. RVs can be rented from local dealerships or through peer-to-peer rental marketplaces.

This article was written by NerdWallet. Steve Nicastro is NerdWallet’s authority on personal loans and small business. Email him at Steven.N@nerdwallet.com