Campers are all the rage this year, and with good reason. The global pandemic that continues to rage across the globe has travelers looking to social distance instead of gathering in one place. Camping is a great way to spread out, and an RV or travel trailer is one of the best ways to do it.
However, some RVs can run upwards of $80,000 or more, depending on the model, making financing necessary with many RVs sold today. Let’s take a look at financing RVs and some of the best options for financing.
What to expect for a monthly RV payment
As with new or used vehicles, you can take out a loan to pay for an RV. Most RV loans are long-term, which can help keep your monthly payments low. Terms will vary depending on several factors, including the RV’s age, credit history, et cetera.
As for monthly payments, the average monthly payment for an RV will be anywhere from $225 to $650 monthly. This average is based on a $35,000 vehicle with $0 down and varying interest rates. Most lenders who offer RV loans will require a minimum down payment of 10%, while others require 20%. However, the more down payment you have, the lower your monthly payment will be.
What kind of loan terms to expect
Typically, the loan term for a motor vehicle purchase is going to max out at seven years. However, RV loans can be stretched out a bit longer. For example, some loans can be stretched out to 15 years in some cases. Again, these terms can vary drastically depending on the lender and the loans they offer.
Interest rates can also vary based on an individual’s credit history, affecting the monthly payment. For example, a 12-year loan on a vehicle selling price of $25,000 will be $212 a month at 5% interest. That is figured with $0 down, so putting more money down will drop the amount financed and lessen the monthly payment. However, someone with shaky credit might pay a higher interest rate, and the bank may require a bigger down payment.
Which banks offer financing for RVs
RV lenders, like most lenders, cater to a wide variety of customers. For example, if you have shaky credit, perhaps Southeast Financial would be a good fit for you. Southeast Financial has a minimum credit score of 550. The company also has a 4.4 out of 5-star rating through TrustPilot, with more than 2,600 consumer reviews.
If you are looking to take out a large loan, SunTrust offers longer finance terms to make the monthly payment more manageable. SunTrust offers fixed interest rates between 4.74% APR and 5.74% APR, with loan repayment terms of up to 240 months, and offers RV loans of up to $1.5 million.
According to Investopedia, the best company to finance with is Alliant. They offer low rates, high maximum loan amounts, and flexible terms. They also provide options for travelers that intend on using their RV full time.
When it comes to choosing to finance your RV, it pays to do your homework. RV loans are as unique as the kinds of RVs that you can purchase. Finding a reputable bank and a reputable dealer to buy from is as important as having the funds to make the down payment and the monthly payments. It pays to shop around and find the loan terms that fit your particular budget and needs.