The majority of prospective buyers have to rely on a bank or a lending institution to finance an RV purchase, which may be one of their largest investments. Most lending institutions will finance RVs up to 20 years (depending on the amount of the loan), which is instrumental in keeping the monthly payments affordable.
Many dealers use a number of banks or finance companies and can orchestrate the necessary steps to set up a loan with very good terms. You also can check with your own bank or credit union; credit unions often offer their members the best rates in the business. However, the term may not be as attractive as the dealer's sources, especially if the dealer does a lot of business with certain lending institutions. If you decide to go with the dealer, the finance manager will send your application to a number of lenders in search of favorable rates and terms.
Whether or not you're approved is dependent on four factors:
- credit history
- adequate down payment (if you cannot qualify for a zero-down plan)
- the ability to make payments
- proof of income
The Good Sam Club's vehicle-financing program, www.goodsamvip.com, has favorable interest rates for both new and used RVs.
It's important to have some idea of your future RV plans before applying for a loan. If the rig you are planning to buy will eventually be traded for a larger or more expensive unit in the near future, try to finance it for a shorter period of time, or provide a larger down payment.
Unfortunately, RVs depreciate (especially during the first few years) and, even after years of making payments, you might end up owing more than your rig is worth if it's financed for 144 or 180 months. If you choose to finance under a zero-down plan, keep in mind that the depreciation factor may be much more dramatic as it affects the balance on your contract.
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