But because the collateral makes the loan less risky to lenders, interest rates are often lower on secured RV loans. Keep in mind that if you fail to make your payments on a secured RV loan, the lender can repossess your RV. But if you’re purchasing a higher-value RV, such as Class A or Class C motorhome, Truist requires the loan to be secured, using the motorhome’s title as collateral.
In most cases, smaller RV loans are unsecured and function more like personal loans, while higher-dollar loans for luxury RVs are secured and work more like an auto loan or mortgage.įor example, Truist Bank-formerly SunTrust Bank-offers unsecured loans for purchases of RVs, including towable campers and trailers, for amounts between $5,000 and $100,000. When it comes to RV loans, some are secured and some are unsecured. On the other hand, most personal loans are unsecured, where no collateral is required and you’re approved based solely on your creditworthiness. In other words, if you default on your loan, the lender can repossess the car. There’s one thing all auto loans have in common: they’re secured, with your car serving as collateral. Your lender may also require an RV inspection, which usually costs between $150 and $200. RV loans also require a down payment, often between 10% and 20%. Interest rates are usually fixed, so your payments remain consistent over the life of the loan. For smaller RV loans, the terms may be only for two or three years, while larger RV loans may have terms as long as 10 to 20 years. Your lender may offer you a few different term options, allowing you to decide on the timeframe in which you’ll repay the loan (this impacts your interest rate and monthly payments). If you plan to obtain an RV loan from a lender of your choice rather than through the dealership, you can apply and get pre-approved before you go shopping for your RV.
In addition to checking your credit, lenders may look at other aspects of your financial health, such as your net worth or cash flow/income, employment and housing.īorrowing requirements can be stricter for larger loans, so the amount of documentation required also depends on the lender and the size of the loan.
Your credit plays a large part in your eligibility and interest rate, as does the size of the loan and your down payment. How RV Loans WorkĪs with any other loan, prospective borrowers submit an RV loan application that the lender reviews and evaluates based on several factors. For example, Bank of the West requests that customers use personal loans for RV purchases under $10,000 rather than RV loans. Depending on the lender, you can find RV loans for around $25,000 that are repaid over a few years, but you also can find loans as hefty as $300,000 that are repaid over 20 years.įor very small RV purchases, you have the option of using a personal loan instead. RV loans also are separate from auto loans because they’re typically larger, more complicated purchases. Because RVs range from small and affordable to large and luxurious, RV loans also run the gamut with size and terms. What Is an RV Loan?Īn RV loan helps you finance a purchase of a new or used RV, motorhome or camping trailer that you can’t afford to purchase outright. Since an RV doesn’t fall in the typical car category and is often a much more expensive purchase, RV loans exist to help consumers finance these large, unique purchases. They’re a wonderful way to see the country without the hassle of flying, and you have built-in accommodations wherever you go. A recreational vehicle, also known as an RV, serves as a unique hybrid between a vehicle and a home.
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