If you are looking to refinance your existing RV loan, your current RV loan balance plus 80% of the cost of any upgrades should not exceed 80% of the current market value of your RV.
When it comes to terms, most RV loans over $100,000 can be financed for as long as 20 years while RV loans between $25,000 and $99,999 typically have a maximum term of 15 years. The general opinion is that a shorter term has the best advantages. A shorter-term RV loan will allow you to build up equity in your RV more quickly which will translate into more money into your pocket when it's time to sell. However, individual issues such as the amount of down payment and ability to make monthly payments should be considered.
Part of the confusion that, no doubt, comes into play when financing an RV is the lending rate. The rate that you obtain for an RV loan is based on a number of factors; the term of your RV loan, your credit quality, credit score, credit history, repayment history, down payment and loan-to-value. The basic rule is: The higher the risk, the higher the rate; the lower the risk, the lower the rate. The best way to improve your rate is with a larger down payment, shorter terms and a strong credit history.
Whether you intend to buy a new or used RV, having your financing pre-approved first gives you a number of advantages:
If you are purchasing a new RV, a pre-approval will give you flexibility akin to shopping with cash. You have the ability to negotiate and get the best price at any dealership you might choose. Also, your interest rate will be locked in and won’t be affected by dealer markup.
If you are purchasing a used RV, weather from a dealer or a private individual, pre-approval gives you a negotiating advantage. It lets the seller know that you are a serious buyer because your financing is already in place. This way your offer can be made without any concern that you’re financing may fall through so you have the ability to close quickly.
Pre-approval also helps you determine your credit and loan limits, allows you to address and resolve any credit issues before they become an issue, and helps eliminate any financing anxiety that might arise once you have entered into a purchase.
A final question that might be weighing on your mind is how the financial institutions that provide RV financing have weathered the current economic status in the country. Those that have not taken on too many high risk loans will certainly be able to provide a better financing package in a downturn economy than the ones that have.
RV Finance Calculator
Questions like the ones below are covered in our RV Comparison Guides:
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Which manufacturers are rated best? |
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What are the top selling brands in each category? |
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Should I buy a new or used RV? |
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How do I determine the overall quality of construction? |
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What is the depreciation factor when buying new? |
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How do I know if I am getting a good deal? |
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Should I trade in my old RV or sell it? |
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How do I select the right RV dealer for me? |
