Everything you need to know about getting an RV loan

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Ask a Lender
August 14, 2017 | Updated September 27, 2017


Key Points

Prepare to get the best RV purchase financing

  • Unlike a house or a car, an RV is considered a luxury item.
  • Because they’re not deemed a necessity, credit qualifications for RVs can be tighter than for a home or auto loan.
  • A credit score of 640 is typically needed to get an RV loan, but 700 and up is better.
  • A down payment of 20 percent is typical, although you may be able to put less money down.
  • An RV can be considered a second home in some cases; in such instances, you can deduct the loan interest on your taxes.

RVs, short for recreational vehicles, are the perfect tool for intrepid travelers enchanted by the idea of open roads and endless adventure.

But RVs cost money — a lot of money. And unless you’re independently wealthy, most people will need a loan to purchase an RV.

Although you may have experience financing the purchase of a home or automobile, RVs sit in something of a gray area. They are neither a home nor an automobile.

In a sense, they are both — although for tax purposes, they can in some cases qualify as a second home. For this reason, RVs are typically seen by lenders as luxury items, rather than as a necessity, like a primary residence or a car would be. Consequently, RV loans often come with more stringent qualification standards than home or auto loans.

If you have your heart set on a shiny new RV, what do you need to know to secure an RV loan so you can hit the open road?

Credit score

Typically, lenders require a credit score of at least 640 to approve an RV loan. A score above 700 increases your chances and can earn you a better interest rate.

You may be able to find financing if your score is below 640, but this will typically come with higher interest rates.

If your score is very low, you may not qualify for an RV loan. If that is the case, there are steps you can take to improve your credit score before you try applying for a new loan.

Down payment requirements

It’s possible to find RV loans that require down payments of as little as 5 or 10 percent — and sometimes even no money down — it’s more likely that you will need to make a down payment of at least 20 percent.

If you’re trading in a used RV, it may cover all or part of the down payment. If you’re purchasing your first RV, however, you’ll likely need to save up money for the down payment.

Although it can be daunting to save up 20 percent of the cost of an RV, there are two big advantages to making a larger down payment.

First, doing so helps you secure better financing terms, including a lower interest rate. Secondly, when you make a larger down payment, you instantly gain more equity in the RV. This makes it less likely your loan will go upside down, meaning you end up owing more than your RV is worth.

Rewarding perks

There’s a good chance that you can deduct a portion of your RV payment on your income taxes after taking out a loan to purchase an RV.

Some RVs are considered second homes for tax purposes. If you purchase a qualifying RV, you can deduct the loan interest from your taxes. To qualify as a second home, an RV must have a sleeping area, toilet and cooking facilities.

Buying an RV can be rewarding, but obtaining finance to purchase one also can be a long and confusing process. With a little advance planning, however, the process doesn’t have to be a total headache.

Maximize your credit score, save up as much of a down payment as you can, and take advantage of any available tax deductions. You’ll be cruising down the road in style and comfort in no time.

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