How Long Can A Used RV Be Financed For?

‍You are ready to live out your dream of traveling in an RV. Before you start shopping, you need to know how long a used RV can be financed. Let’s find out.

The length of the loan for a used RV will depend on things like the age, the mileage, and the condition of the vehicle. Also, your income, credit history, and down payment amount will also affect it. Usually, used RVs are financed for around 10 years with some being financed as long as 20 years.

I have wanted to live the RV lifestyle for some time, so financing recreational vehicles is something I have put time into learning about. Here I have put together the information I have learned from lenders, dealerships, and reputable financial websites.

‍How Long Can a Used RV Be Financed For

Getting a loan for recreational vehicles is a little different from getting an auto loan. The terms are different, and the expectations are different.

Unlike auto loans which only go up to seven years, some RV loans go up to 240 months which is a whopping 20 years. Even though some lenders will go this long, many lenders offer around 10 to 15 years instead.

There are some restrictions on financing used recreational vehicles. Some lenders won’t finance an RV that is over 10 years old, and some won’t finance one with high mileage.

The length of your RV loan will depend on considerations from the lending institutions and what monthly payment you can afford.

Things About the RV that Affect the RV Loan

• What is the purchase price of the RV?
• What is the condition of the used RV?
• What is the mileage of the used RV?
• How old is the used RV?

Things About You that Affect the RV Loan

• How much down payment do you have for your RV loan?
• Do you have good credit?
• Do you own a home or do you rent?
• How much are the bills you are already paying?
• How much is your income?

Buying a New or Used RV

When shopping for your dream RV, you will be wondering if you should make a new or used vehicle purchase. Let’s look at some of the pros and cons from a financing standpoint.

Buy a New RV

• A new RV will lose about 25% of its value as soon as you drive it off the lot.
• Since an RV depreciates, some of them will lose up to 45% of its value in the first three years. A fifth-wheel RV is one of these.
• You will be able to finance a new RV for longer.

Buy a Used RV

• You won’t lose as much in depreciation as most of that loss has already occurred.
• A used RV has a lower sticker price.
• There will be limited financing options for a used RV.

Pay Cash or Get RV Financing

If you have enough money for a used recreational vehicle but aren’t sure if you should finance or pay cash, consider the following things.

Pay for RV in Cash

Pros

• You can get your RV paid for and out of the way without having to worry about future financial issues.
• You won’t have to use something as collateral on your RV loan or risk messing up your credit score if you make a late monthly payment.
• You will have more money monthly since you paid in full during the initial purchase.

Cons

• Your money won’t be in a savings account earning interest.
• You may not qualify for certain tax breaks that you get with an RV loan.
• You won’t have as much savings to draw from in the event of an emergency.

Get RV Financing

Pros

• You can pay a down payment of 10-20 percent for your RV financing and save the rest of your cash for emergencies.
• You may qualify for tax breaks due to paying interest on your RV loan.
• Borrowing money allows you to invest your cash in other programs and let it make money for you.

Cons

• Since you have to pay interest on an RV loan, you will pay more for your RV in the long run.
• Some lenders require used RVs to pass an RV inspection before they will approve the loan.
• While your RV is financed, you have to carry the amount of RV insurance the lender requires

Where Can You Get an RV Loan

If you have decided that getting an RV loan is best for your situation, you will now need to decide how you will finance this type of vehicle before you make your RV purchase.

Lenders from the Dealership

One of the easiest ways to get RV financing is by using dealer financing. Since you are already at the dealership, this is a quick way of getting approved to finance an RV.

Some dealers offer in-house financing, but if they don’t, they will have you fill out a loan application and then run that through the RV lenders that are available.

Not only is this quick and easy, but you can compare lending offers and choose the one with the best financing terms. Since lenders are competing, they will often offer flexible financing options.

One thing to remember before doing this is that other lending options may offer better financing terms and a lower interest rate.

Bank Loans for RVs

Another financial institution to consider is a traditional bank. If you already have a checking and savings account, then starting at your usual bank may be the best place to start.

One drawback here is that not all traditional banks offer financing for RVs. If your bank doesn’t finance these types of vehicles, then you will have to call around to find one that does. Banks also sometimes require a larger down payment.

There are good reasons to finance an RV with a bank that will make it worth the effort. Banks can often offer lower interest rates than finance companies. You can also avoid fees that are unique to dealership RV financing.

RV Loans from Credit Unions

Credit Unions are one of the most popular forms of financing as they usually offer better RV loan terms. Your credit union will often have the lowest monthly payment, the lowest interest rates, and the lowest down payment required.

Your union will have unique perks for members such as discounts and programs that other lenders won’t offer. They are also sometimes more lenient for those with bad credit.

If you are not already a member of a credit union, you will need to become a member. Membership in a credit union is usually restricted. To join one, you have to have a certain employer, a certain occupation, or a family member that is already in the union.

Online Lenders for RV Loans

Since we are in the digital age, many people are looking for RV loans in places other than banks and credit unions. Online lenders are often the best deal for many RV loans.

You can get pre-approved for a loan amount in the comfort of your home, then you know exactly how much you can spend for your RV. These lenders often offer the same RV loan interest rates and loan lengths as other types of lenders.

While this type of lender is convenient and easy, make sure you are on the lookout for scams while you are shopping. It is easier to fall for a scam online than it is to fall for one in a brick-and-mortar institution. Only use reputable lenders.