Want to Hit the Road? There's a Loan for That

Could an RV loan help you get out the door?

If you love to vacation but aren't a huge fan of planes and hotels, an RV may be the answer you are looking for.

Recreational vehicles come in all shapes and sizes, from small and economical pop-up campers or truck campers to travel trailers to fifth wheels and Class A RVs that can provide you with all the comforts of home.

Paying for an RV can be a bit of a challenge, though, as the price usually starts in the tens of thousands and goes up from there, with some luxury campers costing millions. While ideally you would be able to save up enough in your bank account to cover the costs with cash since unlike houses, RVs don't usually go up in value over time, this is not always possible for many people.

That's where an RV loan comes in.

What is an RV loan?

An RV loan is exactly what it sounds like: A loan for the purposes of paying for your recreational vehicle. These loans are typically secured by the camper that you purchase, and as a result, the interest rates for well-qualified borrowers are usually below the rate on unsecured loans such as personal loans.

Because an RV is an expensive purchase, many RV loans have very long payoff times. Unlike a typical car loan, which you usually pay off in well under a decade, an RV loan may have a 10, 20, or even 30-year repayment timeline.

The interest on your RV loan may be tax deductible, though, depending on the specifics. You can qualify for a mortgage interest deduction if you itemize on both a primary and secondary home. Your RV can count as your secondary residence if it meets certain requirements such as having a sleeping area, cooking area. and bathroom area.

Where to find an RV loan

If you're in the market for an RV and need a loan to buy one, your dealer is almost assuredly going to be willing to help you out with that. Most if not all RV dealers have a financing department that will work with you to get approved and compare financing options.

You don't have to just accept the loan your dealer offers, though. You can also shop around with banks and credit unions, including both local and online institutions, that offer RV loans as well. Fortunately, this process is really easy since applying for an RV loan is more like applying for a car loan than a mortgage loan -- you'll need to provide details about your credit and income, but not a ton of financial documentation beyond that as you would if you were getting a mortgage.

When you compare RV loan offers, pay attention to all of the terms including your interest rate, monthly payment, and payoff time. Don't just make a choice based on whether the monthly payments are affordable, but also think about how long you will be in debt and the total amount you will pay over time to make sure the RV is really affordable for you.

With the right loan, hopefully you can make vacation memories in your great RV while still keeping all of your financial goals on track.