Financing an RV
RV loans are easy to find, but it still pays to shop around. Most RV buyers are considered good risks because they tend to be older with higher incomes and very often they are purchasing an RV as a second home.
Most RV dealers offer some type of financing, and these are worth looking into. You may find special rates and rebates not available through institutional lenders. When considering dealer financing, watch out for unexpected fees, such as extended warranties or loan insurance. You can say no to these fees. If they are overly pushy, just get up and walk out — that will usually change their tune. Read the loan paperwork carefully for prepayment clauses. If you should sell or trade in the RV before the loan is paid off, you may be hit with an unexpected fee.
Check also with your bank or credit union for financing, as interest rates may be slightly lower for established customers. Loans from these institutions normally do not have prepayment fees or require loan insurance.
ALERT
With the wide availability of home equity loans and lower interest rates over the past few years, many people are using the equity they have built in their homes to purchase an RV. If you are looking into this financing option, remember that equity is based on the difference between the amount you still owe on the primary mortgage and the assumed resale value. If the housing market declines, you may find yourself with a negative equity on your home.
