Current Loan Rates For RV's

‍A typical recreational vehicle buyer purchases their house on wheels with a loan. As of now, what are the current rates for RV loans?

Interest rates have been climbing recently. An RV buyer can expect to pay anywhere from 7.5% up to nearly 20% depending on their credit history and the length of the loan. Typically, a longer term loan will have a higher rate though excellent credit can drive down the overall cost.

Major purchases like a recreational vehicle require significant research. We’ve looked into current loan rates. We also have a few pointers about what to do to keep your interest rate and the total cost of your recreational vehicle as low as possible, now and over the lifetime of your RV.

‍Prime Rate and Loans

The interest rate you pay for a loan depends on the current prime rate. The primate rate is set by the Federal Reserve. Banks can charge rates above the prime rate. To make a long story short, the Federal Reserve raises and lowers the prime rate based on the stability of the economy and the money supply. As of this moment, the prime rate is a relatively high 7%, which is meant to help curb inflation.

What is the interest rate on a good RV loan?

The interest rates typically advertised by banks who offer loans on vehicles like cars and RVs start with prime rates and go up. A bank will typically charge less interest to a customer who has excellent credit, as they represent a lower risk of defaulting on the loan.

Based on current interest rates, you can buy yourself an RV starting at around 7.5% if you have excellent credit. Interest rates could realistically climb all the way up to 30% plus, which at some point represents a poor value for the buyer.

Getting a better interest rate

We can offer a bit of advice on getting a better interest rate for your recreational vehicle purchase.

Familiar Banks

While having excellent credit is a good start, asking for a loan from a bank you’ve worked with before and are in great standing with can help you find a better interest rate. If you have a car loan, mortgage, and checking accounts with the same bank, you should definitely approach them first about getting an RV loan.

Get a shorter loan term

While an RV is a significant investment, a shorter loan term tends to lead to a better interest rate. In many purchases, bankers will ask you how many months or years you want the loan for. A shorter-term loan will result in a higher monthly payment, but a lower overall interest rate because the RV will be younger (and hopefully in better shape!) if they do have to repossess it.

Check your credit

If you are looking to buy a recreational vehicle or boat - which amounts to vehicles the average person buys for leisure, you probably already have good credit. Check it anyway before applying to make sure your credit info is accurate and as expected. While it goes almost without saying, the best way to get an overall better interest rate and a higher credit score is to use as little revolving credit as you can and pay your loans on time.

Down payment

Some banks will require a down payment for an RV loan. We suggest putting more down than the bank asks for, even if they ask for nothing. Why? Putting money down can lower the interest rate, sometimes, or even ensures you can get the loan.

Making a bigger down payment also lowers your monthly payment, making the repeat payments you make toward your RV a bit easier.

Shop around

While we do suggest using familiar banks, shopping around at multiple banks for the best possible interest rates is also a great idea. Let banks know that you are actively shopping and see what advice they can give to get the best interest rate at their bank.

For those who are worried about repeated credit inquiries will impact your credit score, this isn’t that big of a deal. The more important elements of your credit score are payment history and total usage. If your credit score is within a few points of a different level, it might be worth foregoing shopping around, but in truth it won’t make that big of a difference.

How long is an RV loan?

A typical recreational vehicle loan is to 10 to 15 years. Some banks, with higher priced RVs, might go up to 20 years.

You might have noticed car loans are between 3 years and 6 years on average. Recreational vehicle loans are typically much longer because the RV isn’t driven nearly as much compared to your car, truck, or SUV, and they hold their value relatively well compared to the average vehicle. In some ways, buying an RV is more like buying a house.

Just keep in mind that the longer loan term you go for, the higher your interest will be. While a 15 year loan makes your monthly payment lower, it definitely does not reduce the total amount you owe for the RV over 15 years. Imagine you have a 9% APR, or annual percentage rate for 10 years. This means you will pay the bank an additional 90% of the RVs price, but to the bank.

How much does a typical RV cost?

We are talking about new prices here as used prices are less consistent based on the condition of the vehicle and the year. A new RV typically costs between $35,000 for a smaller RV and can rocket all the way up to $300,000.

Who qualifies for a bank’s advertised rates?

You’ll often see banks advertising rates for a loan. They’ll say rates start at a particular number, like 8%. These rates are for well-qualified buyers who have good to excellent credit.

To be fair, we don’t think that people who have less than good credit tend to apply for RV loans too often. These same people might have an easier time getting financed for a car and a shorter-term loan.

How many RV buyers get loans to start their purchase?

The answer is nearly all of them. Most people don’t have the cash to go purchase an RV, or would prefer to pay a bit extra in interest instead of emptying out their savings.

Should I refinance?

Yes, you could definitely refinance an RV loan. You’ll want to refinance your RV loan if you improve your credit significantly during the course of paying off the loan. You might also find refinancing worthwhile if the Federal Reserve drops interest rates for a few months in a row.

Be a bit careful on the math with refinancing though. Most banks will actually want you to extend the length of your loan and lower the interest rate. We suggest just changing the interest rate instead if you can, especially if you have no desire to increase the length of the loan. While extending loan length usually involves a lower monthly payment, you might also be paying more interest!