The idea of hitting the open road in their very own RV appeals to a lot of people. But as with most large purchases (home, car or boat), you will likely need to finance your RV.

Before you sign on any dotted line, it’s important to fully understand how RV financing works. This article will discuss some of the most confusing aspects of obtaining financing for an RV. Reading it will hopefully help you understand how to get the best deals and save money.

3 Main Financing Factors

Let’s take a look at the three main factors that will determine what kind of financing and interest rates will be available to you:

Current Rates 

The same way that home and auto loans have fluctuating interest rates, RV loans and interest rates are dependent on what the overall market is doing and are therefore not static. RV rates tend to mimic auto loan rates, so when you see that auto rates are low, it would be a good time to go shopping for that RV you’ve been eyeing.

Credit Score 

Perhaps the biggest deciding factor on what rates will be available to you is your credit score. The better your credit score, the lower your rate. While a low credit score doesn’t necessarily mean you won’t be able to find a good deal, it does mean that you may have to shop around to find someone who will work with your credit rating.

Down Payment

The more money you can put down upfront, the better APR and terms of repayment you’ll get. Ideally, you want to put down at least 10%, but more is always better. This will help you cut down on your monthly payments (which means more money for tolls and tacky T-shirts) as well as help you when it comes to negotiate the best deal.

Different Ways to Finance an RV

When it comes to financing an RV purchase, you have two main options at your disposal: financing through a dealership or with a third party such as a bank, credit union or other private lender.

Financing Your New RV Through a Dealer 

Generally speaking, financing directly through a dealer is a great way to go because the entire process is fast and convenient. The dealership handles everything so you don’t have to go back and forth between them and your lender of choice. And, if you time it right, you might get a sweet deal because many dealers offer very low financing rates through quarterly promotions and sales.

If you decide you want to finance through a dealer, be sure to do your homework first to choose the right one. You’ll want to check reviews to see if past customers had any complaints, or if they were satisfied with the rates and negotiation process. Only finance through a dealer when you are confident you found one who will work with you to get the best deal possible.

Financing Your New RV Through a Bank or Other Lender 

There are some pros and cons to working directly with a bank or other lenders like a credit union. On the plus side is that if you have been with your bank or credit union for some time, you can feel confident working with them.

On the con side, your bank will most likely offer you “the best deal possible,” meaning there won’t be much (or any) negotiating. It’s either their deal or no deal. And, with a bank it may take a few days to finalize the paperwork, whereas with a dealership, you can drive off the lot in your new RV that same day.

Some Additional Things to Consider When Financing Your RV

Before you take out that loan, it’s important that you factor in all your monthly expenses. In addition to your loan payments, you will have things like RV insurance, roadside assistance coverage, RV maintenance fees and possible storage fees if you won’t be living in your RV full time.

There are also expenses such as fuel, propane, tolls, and RV park fees. You definitely want to be aware of ALL your monthly expenses and factor these in so you can buy an RV that fits your budget as well as your lifestyle.

See you out on the open road.