If you’ve ever dreamed of owning a recreational vehicle and going camping in style, you’ve probably asked yourself how on earth you can afford one. While some people might have enough money saved to purchase an RV outright, most folks will have to take out an RV loan to make their camping dreams come true.

Before you contact your local credit union, though, you should be aware that getting an RV loan isn’t quite the same as other vehicle loans. Knowing what these differences are before you start the application process will make your RV buying journey easier and help you get the best terms for your loan.

Here’s what you should know before getting a recreational vehicle loan

Recreational Vehicles are not a Necessity

The most important thing to keep in mind about recreational vehicles is that they are not considered a necessity. This means that lenders usually consider these loans to be riskier than a standard auto loan. As a result, they’ll be more thorough when looking at your loan application and making sure your financial information shows you’ll be able to repay the loan.

This means your finances need to be in excellent shape if you want your RV loan application to be approved. At the very least you’ll need a good credit score and a track record of steady employment. You’ll also want to make sure you have a low debt-to-income ratio so a lender can see you’ll be able to comfortably fit the loan payment into your monthly budget.

Apply for a recreational vehicle loan at First Alliance Credit Union

You’ll Need to Make a Down Payment

You don’t always need to make a down payment when buying a car, but buying an RV is a different story. Most RV dealerships require a minimum down payment of 10%, but it’s not unusual to see down payments as high as 20%.

While you might be able to find an RV dealer that won’t require a down payment, your search won’t be easy. You’ll also have more trouble finding a lender willing to give you the loan without a down payment, and even if you do they’ll charge you more interest on the loan.

Your best bet is to plan on making a down payment of at least 20%. This will give you access to a wider range of RV dealerships and could reduce the amount you’ll have to borrow from a lender. If you don’t have that much money on hand, set a financial goal to save up the amount you’ll need.

The Type of RV Determines the Terms of the Loan

While you’ll want to get the best possible deal for your loan, you should be aware that your choice of RV will affect the terms and interest rate you receive. If you buy a newer RV, you’ll probably get a loan with a longer term and a lower interest rate. On the other hand, if you apply for a loan to buy an older RV, don’t be surprised if the lender charges you more interest and gives you a shorter term.

If you’re not sure about the term and interest rate you’d get on an RV loan, your best bet is to visit a credit union or bank and get preapproved. This will not only let you know what your budget is, it will also help you figure out the particulars of your loan. It's worth pointing out that you can then use that information in an auto payment calculator to help you figure out your monthly payment. 

Got questions about getting an RV loan? Ask us!

Get a Recreational Vehicle Loan at First Alliance Credit Union

If you’re planning to get a loan for an RV, you should know a few things about the process before you start. For instance, you need to make sure you have a high credit score and a low debt-to-income ratio, so lenders can see you won’t have a problem making payments. You’ll also need to have enough money saved up to make a down payment and understand that the type of RV you’re planning to buy will affect the term and interest rate of your loan.

If you’re looking to get an RV of your own, talk to a First Alliance Credit Union lending advisor today. They’ll be able to answer any questions you have about the loan approval process and help you get an RV loan that works for you. You can also save up for an RV down payment with a traditional savings account, money market account or certificate of deposit, and even get help setting a SMART goal to buy an RV.