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What Is an RV and How Much Does It Cost?

Recreational vehicles, also known as RVs, are a popular form of alternative travel and living for many in the United States. Roughly 11 million U.S. households own an RV. While this form of transportation is more commonly associated with retirees, rates of RV ownership are higher among working adults than retirement-age consumers.

What is an RV? These traveling motorhomes allow you to move from location to location while bringing your home with you. By squeezing a modest apartment space onto the frame of a long-haul rig, RV owners enjoy an alternative lifestyle that offers the freedom of travel with the comforts of staying home.

If you're considering an RV purchase for yourself, it's important to know what to expect when financing this purchase. Here's an overview of the costs and financing options to keep in mind as you search for the perfect RV.

How Much Does it Cost to Buy an RV?

How Do Auto Loans Work

Like traditional homes, the cost of an RV can range widely depending on the kind of RV you're looking to buy. While some RVs—particularly bare-bones and/or used models—can be available for prices as low as $10,000, a more typical price for an RV can be around $100,000. Luxury models can approach $300,000 or higher, depending on the size of the RV and the quality of its interior finishes.

Because of this high cost, it's normal for potential buyers to seek financing to cover at least a portion of their purchase—especially if you want to preserve available cash to cover upgrades, renovations, and/or planned travel in your new RV.

Applying for a Credit Union RV Loan

Given the size of the purchase you're looking to finance, the process of applying for RV financing is often similar to what you can expect when applying for a home mortgage. The first thing you want to do is get an RV loan pre-approval to find out the amount you're able to finance, as well as the potential APR for that loan.

RV loans can come with a higher interest rate than traditional home mortgages, but it's possible to find competitive rates from lenders who specialize in RV financing. You can also choose flexible payment terms that include repayment periods of up to 15 years, similar to the repayment structure on a 15-year mortgage.

Before you apply, check your credit report to verify the accuracy of its information. You will also need to line up documents related to your income and employment history, among other information. The faster you supply this information to a prospective lender, the faster you can receive a pre-approval that allows you to shop with confidence.

The Benefits of Financing an RV as a Primary Residence

If you spend more than half the year living in your RV, the IRS allows you to claim this as a primary residence. You need to finance the purchase through a secured loan, rather than a credit card or other unsecured loan, if you want to claim the mortgage interest deduction on your taxes.

Other homeowner tax deductions may also be available if your use of the RV qualifies it as a permanent residence. Make sure your lender is aware that you intend to use the RV as your primary residence. This will help the lender make sure you're getting the right loan to maximize the benefits and potential tax savings of this living arrangement.

How to Find Camper Financing Near Me

As you search for camper financing, you might want to start with your local bank or credit union. Given your banking history with these institutions, you can quickly get a pre-approval that will help you shop for competitive rates. Your bank or credit union may also be willing to adjust their proposed APR or other terms based on the offers you find elsewhere.

For potential buyers seeking bad credit RV loans for full-timers, you might have to do some extra digging to find a great lending option—once again, your local bank or credit union may be willing to work with you if your employment history and/or income are looking strong. This may be particularly true in cases where you plan to live full-time out of your RV, in which case the lack of monthly rent or a mortgage can improve your debt-to-income ratio, and improve your odds of approval.

If you currently own a recreational vehicle and are looking to refinance to lock in lower rates or better terms, search for a financing company that is willing to refinance a travel trailer, motorhome or whatever kind of recreational vehicle you own.

Whether you view an RV as a fun travel opportunity, a way to reduce your living costs, or both, lenders are ready and willing to help finance this purchase of a lifetime. Do your homework and find local lenders that offer a background in RV lending as well as a commitment to customer satisfaction.

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