Saving for an RV
Camper, motorhome, caravan—it doesn't matter what you call it or even if you don't know the difference between gray and black water. We'll help you navigate through saving for an RV and you'll be stargazing and starting campfires in no time.
What type of RV is right for me?
From a 44-foot Class A RV to light pop-up trailers you can tow with your car, there are many RV options out there. Similar to buying a car, a good place to start is to weigh your needs against your budget. Calculate a reasonable RV payment you can afford each month and make sure you leave some wiggle room for maintenance, outfitting the RV, and storage fees (if applicable).
When do you want/need the RV?
When budgeting and saving money for an RV, it’s incredibly helpful to have an estimated time frame in mind. This will help you organize and manage your money monthly to prepare you for your first RV payment along with the down payment.
Tips for Saving
Tip: Open a dedicated savings account
Now that you’ve figured out your ideal monthly payments and have a loose idea when you want to buy an RV, it’s time to start saving for the down payment. Try to save either a fixed amount or a percentage of each paycheck. To take it a step further, if your employer offers direct deposit, simply tell payroll to send a certain amount to your savings account every paycheck, with the rest sent to checking as usual.
Tip: Create a budget and slash expenses
If you’re itching to get on the open road as soon as possible, create an exacting budget and stick to it. Then start eliminating monthly costs that add up. Cut the cable. Cancel the memberships. Eat out less, and plan meals and grocery shopping trips—all standard stuff.
Tip: Save without losing your mind
Saving money is tough—and if it doesn’t sting a little bit, you’re probably not doing it right. That said, you deserve to enjoy your life while you’re saving for your new RV. Try to cut out the spending habits you spot, one by one, but remember to still treat yourself once in a while.
Borrowing for an RV
When you're financing a new RV—or a used camper that's new to you—the options are similar to those offered for an auto loan but can still be extremely confusing. Let's review your options so you hit the road prepared.
Do RV loans work like car loans?
Yep, just like an auto loan. The amount you borrow is called the loan principal. The certain percentage of the loan that you agree to pay back in addition to the principal is the interest rate.
What are some common RV loans?
The two most common options for securing an RV loan are a typical collateral loan (similar to an auto loan) and a home equity loan. A home equity loan requires significant built-up equity, and you may need to pay for an appraisal and closing costs. Home equity loans allow you to take advantage of today’s low home loan interest rates, and payments on a home equity loan are usually tax-deductible.
How do I get an RV loan?
Similar to securing an auto loan, the first place to start is by checking your credit score. Remember, over the life of a 3.5+ year loan, even a 1 percent APR reduction can have a huge effect. If you score is lower than what lenders require to give you a good rate, take a few months to bring it up before applying for an RV loan. The next steps are to know what you can afford and to start shopping around in your price range. Don’t forget that the sticker price isn’t the final operating cost and that you still have to account for fuel, storage, maintenance, taxes, title, registration, and insurance. Now it’s time to talk with a variety of lenders to begin comparing terms and interest rates before choosing the loan that works best for you. Most RV dealers offer in-house financing as well. Occasionally, dealer-based financing will give you access to manufacturer deals that can save you money, but never assume dealer financing is your best option. Shop around before you decide.
The higher your credit score, the better.
The interest rate lenders charge for your RV loan is primarily based on your credit score. The better the score, the lower the rates. To offset risk, lenders may require a larger down payment or charge a higher interest rate. Keep in mind that your credit score is affected by five factors:
- Payment history (35% of total score)
- Amounts Owed (30% of total score)
- Length of Credit History (15% of total score)
- New Credit (10% of total score)
- Types of Credit (10% of total score)
Tips for Borrowing
Tip: Older RVs are more difficult to finance
It’s important to note that it may be difficult to find a lender willing to issue a loan for an RV more than five years old. In some cases, the lender will want to inspect and approve the used vehicle.
Tip: Your RV is tax deductible as a home mortgage
Because virtually every RV and the majority of trailers feature beds, kitchens, sinks, and bathrooms, the IRS considers them homes. That means that the interest on your loan may be tax deductible as a home mortgage.
All information on this page is intended to be a helpful resource when researching, but does not constitute financial advice and should not be relied upon as such.