RV Financing Frequently Asked Questions

It’s that time of the year again, when many people are considering purchasing an RV. When I was a sales manager and finance manager for an RV dealership I would get asked lots of questions about financing RV’s. I organized some of these questions and included them in the RV financing section of my book, “The RV Book”. Here is an excerpt from my book on RV financing FAQ.

Will one RV lender offer better interest rates than another RV lender?

Interest rates change frequently. If the prime rate goes up RV finance rates will go up too. RV lenders send updated rate sheets to RV dealers whenever their finance rates change. RV specialty lenders watch each other closely and if one lender lowers rates the other lenders will generally follow suit. They will usually stay within a quarter to a half point of each other.

Are there other factors that will determine what interest rate I get?

Yes, there are several factors that will determine the rate you get.
1) It depends if the RV is new or used. A used RV (normally over 3 or 4 years old) will get a higher interest rate than a new RV.
2) Your down payment will affect your interest rate. If you finance the RV on a zero down program the interest rate will be higher.
3) The term of the loan will affect the interest rate. The shorter the term the higher the rate, the longer the term the lower the rate.
4) The amount financed will affect the interest rate. The lower the dollar amount the higher the rate, the higher the dollar amount the lower the rate.
5) Your credit history (credit rating or score) will affect the rate. The higher your credit score is the lower the interest rate will be.

Should I shop around for a better rate, or will the rate a dealer offers be the best rate I can get?

You should be aware of what the current rates are for RV loans, and based on the criteria listed determine if you are getting the best possible rate you can get. If you think you qualify for a lower rate, by all means try securing a better rate elsewhere. There are several RV specialty lenders on the internet that would like your business and will offer competitive rates. Do not however let too many lenders run a credit check on you to try and get a lower rate. This can backfire so be selective about who, and how often your credit is being checked.

Can you explain more about financing an RV with no money down?

There are usually a couple of RV lenders that will offer no money down finance programs. These programs will have certain guidelines to qualify. The type of RV, dollar amount, term of the loan and your credit rating can all factor into these types of programs. The finance rate will usually be higher too.

What length of term can I expect to get on an RV loan?

The term of the loan will be based on the dollar amount financed and the age of the RV. Some RV lenders are offering 20 year loans on new RV’s with financed amounts over $100,000 and loans ranging from $25,000 to $99,000 can qualify for 15 year loans. Loan amounts between $10,000 and $25,000 may qualify for 10 to 12 years loan terms.

Why would anybody want to pay the interest on a 15 or 20 year loan?

Nobody wants to, but the biggest advantage of a long term loan is you get a lower monthly payment. Financing $100,000 for 240 months at 7% interest would be $775 a month. The same loan for 120 months would be $1,161 a month. You save almost $400.00 a month. But keep in mind you will have little or no equity if you try to trade within the first several years.

Can I finance an RV with below average credit?

RV’s are basically considered a luxury item, so the criteria to finance an RV are more stringent than it is to finance an automobile. There are lenders that will finance below average credit but interest rates will be higher.

How is the interest on an RV loan calculated?

The majority of RV loans from RV specialty lenders are simple interest fixed rate loans. What this means is you will only pay interest on the principle owed, and in most cases there is no penalty for paying the loan off early. If you choose to pay more than your required monthly payment you can shorten the term of the loan and save on interest.

Can I write the interest off on my income taxes?

Yes, a fully self contained RV is considered a 2nd home and the interest paid is deductible, if you are not already deducting the interest on a 2nd home. At the time of this writing an RV is considered a qualified residence if it is one of the two residences chosen by the taxpayer for purposes of deductibility. To qualify it must provide basic living accommodations; meaning it has cooking, sleeping and bathroom facilities with fresh water and waste water holding tanks. Talk to your tax advisor about what is required to write the interest off on your RV.

Will I need a down payment and if so how much?

Down payments will vary slightly between RV lenders but 10 to 20% down, in the form of cash or a trade-in, is usually the range. There are programs that offer low down, or no down payment but this will usually increase the interest rate. Most banks want to see your good faith commitment to the loan.

Do I need to have insurance on the RV to get a loan?

Yes, insurance is required when you close on the loan. The bank will not loan the money until they have proof of insurance.

Should I finance the RV or pay cash?

It is my personal opinion that it makes more sense to finance your RV purchase. If you finance the RV you can maintain your personal financial status without liquidating any assets. You can also take advantage of writing off the interest on your income taxes if the RV qualifies.

These questions don’t cover everything you need to know about financing an RV, but hopefully they will provide you with a good understanding on the subject and help you when it comes time to purchase your RV.

Happy Camping,


Copyright 2007 by Mark J. Polk owner of RV Education 101

Obtain Business Capital Using A Variety Of Commercial Finance Options

Commercial finance is one of the many options available to entrepreneurs seeking capital to start or grow an existing business. This sort of financing is also referred to as asset-based lending, meaning that it is a secured business loan. The borrower guarantees the loan by giving up business assets as collateral for the loan. Another popular phrase for commercial finance is asset-based finance.

Account receivable factoring is one form of commercial finance. This consists of selling open invoices for cash that can be used right away in the business. There are many benefits to this financing option including not giving up equity, being able to take advantage of early payment and volume discounts from your suppliers, you can actually purchase in greater volume from suppliers, and you also accrue no additional debt in your business.

Another popular commercial finance option is purchase order financing because it offers quick cash flow reserves. When any business is growing or expanding their business the cash flow simply isn’t there because of the money it takes to market and produce products. Suppliers also want to be paid with C.O.D. and your customers are on Net-30 terms; so you run into a cash flow problem. Purchase order financing solves this issue by paying for the costs of your goods directly to the supplier, thus giving you more cash to use on more critical business expenditures. To begin with purchase order financing simply obtain a purchase order from your customer, find an approved supplier, place the order through that supplier.

Asset based loans, an additional commercial finance option, provide a short term approach to maximizing cash flow within a business. This form of financing is used as test for a business to show how they would perform with a long term loan. The business who is receiving the asset based loan has a short window to prove that with the proper financing their business model is effective, and that a long term loan would ensure business growth over a long period of time. This form of financing is perfect for the business that can’t afford to wait to establish their business credit. The assets that are accepted as collateral for this type of loan include real property, accounts receivables, and completed inventory.

Other forms of commercial finance include bankruptcy reorganization, expansion financing, import and export financing, inventory loans, secured lines of credit, and merchant account advances. Financing a business is a difficult process, but if you utilize the financing resources available, your business have a much greater chance of success.

It is also good to work on establishing your business credit, ensuring that you separate your personal credit from your business credit. With good business credit scores obtaining large loans and other forms of capital is very simple, and you won’t be one of the 97 percent that actually have a loan application denied. One other strategy that is easy to do and beneficial on your quest for business capital is to use a free business capital search engine.

The World Of Boat Financing

Boat financing, much like car financing, is, at the very least, an interesting area of discussion. While the core function remains the same, the fact remains that boat financing and car financing can be different from one another in a number of details. For example, when buying a boat, a common course of action is to apply for a financing. In contrast, one has more financing options when buying a car. Since you can only make use of a loan in purchasing a boat, it would be helpful to know how the whole process works, as well as where to apply for a loan and what the usual terms are. The more common sources for boat loans are banks, though there are some organizations that specialize in providing nothing but boat loans.

There are, naturally, several things to keep in mind when choosing an organization for one’s boat financing needs. It is generally accepted wisdom that when looking for someone to help with financing a loan for purchasing a boat, it is a good idea to go to someone who specializes in boat loans. The boating world has given rise to a number of organizations that are savvy in the nuances of the business, so finding one should be no trouble. However, as a general precaution, one must be sure to check on the reputation of that institution, to be absolutely certain one is putting their money and their trust in the correct place. The most common stop for financial agreements regarding boats are banks, though there are other groups that offer rates and terms that are competitive with what banks offer. Boat dealers and credit unions are also excellent places to check for financial deals.

When looking for a good boat financing deal, it is reasonable to check with more than one organization or dealer to find the best possible deal or rate for you. Far more competitive than the car financing industry, financing for boats comes with more varied interest rates and terms. Regardless of what sort of institution one decides to eventually apply for financing their boat purchase with, one should keep an eye on whatever deal one believes to be best suited to their needs, to their idea of how long they will keep the boat, and to their financial situation at hand and in the near-future. Some things to consider are mechanical warranties that might be offered, the company’s level of expertise in the field, special programs from the manufacturers, and services that deal with the prerequisite documentation of boat ownership.

Once you’ve decided where to apply for the boat financing loan, one should pay careful attention to what exactly is the plan for the boat. When buying a boat, you should take into account what you intend to do with it. Regardless of what the terms are, if you plan on selling it later on, it would be unwise to take a plan that will result in you owing more money than you stand to make when the boat is sold. Another important consideration would be the interest rate of the deal. One should not take the interest rate lightly and make a few quick computations and estimations to ensure that one is not being overcharged for the boat they are paying for. A general, but by no means absolute, rule is to see just how much will be added to the price of the boat due to interest and whether or not the time allotted to pay that interest off is adequate.

In the end, anyone who has gone through the process of car financing will find many familiar elements in boat financing — several options on how to go about it, different details to consider, and the changes in interest rates, just to name a few. Going with the analogy, boat financing is not as hard as one would initially think and once a person has gotten a grasp of how it works, it isn’t difficult to get the best deal out of the whole mess.