Traveling in an RV (recreational vehicle) is a great way to see the country. It allows you to stop wherever and whenever you like, and you never have to search for a hotel room or a restaurant.
While there are many advantages to owning an RV, it can be expensive. If you bought your RV with a loan and you want to save on the interest you’re paying or lower your monthly payment, RV refinancing may be a great option for you.
Here’s everything to know about RV refinancing — including terms, interest rates, costs, and how to find the best deal.
Key Points
• Refinancing your RV can help you secure a lower interest rate, reduce your monthly payments, and potentially save money over the life of the loan.
• To refinance an RV, you typically need to meet certain eligibility criteria, such as having a good credit score, a stable income, and a current RV loan with a remaining balance.
• The process involves researching lenders, comparing rates and terms, gathering necessary documents, and completing a refinance application, followed by a loan approval and closing.
• Common documents needed for RV refinancing include proof of income, current loan statements, RV title, and insurance information to demonstrate your financial stability and the value of the RV.
• Before refinancing, consider factors such as the length of the new loan term, any prepayment penalties, and the impact on your overall financial goals to ensure it is the right decision.
How Does RV Refinancing Work?
Just like there are various types of car loans, there are different types of RV loans, including RV auto loan refinancing.
When you refinance an RV loan, you’re taking out a second loan to pay off the first loan. Ideally, the second loan will have lower interest so you can save money over the term of the new loan. Alternatively, you could extend the repayment period of the new loan to lower your monthly payments. Keep in mind, though, that extending your term increases the amount you’ll pay in interest over the life of the loan.
You make monthly payments on the refinanced loan until it’s paid off. However, if you are unable to make the payments, your RV could be taken by the lender since it is collateral for the loan.
RV Refinancing Terms
If you’re interested in an RV loan refinance because you want to lower your monthly payment, you can look for a loan with extended terms. Some RV refinancing terms can be as long as 20 years, especially if you’re refinancing a loan of $50,000 or more.
You can find RV refinance loans for as little as $5,000 and as much as $100,000 with low rates. Be aware you may be required to pay a processing fee for the RV loan.
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RV Refinancing Interest Rates
RV loan refinance interest rates depend on several things, including the lender you use and your creditworthiness. If you have great credit, you’ll likely be able to get a lower interest rate. If you have bad credit, your rate may be higher.
Check out this guide to auto loan terms explained to learn more about loan terms and interest rates for vehicles.
RV Refinancing Credit Score
Similar to car loan requirements, there are criteria to qualify for RV refinancing, including your credit score. Some lenders may require credit scores as high as 680. Others might not lend to you if you have a bankruptcy on your record or bad credit. Still, other lenders may lend to you with bad credit, but you’ll pay a higher interest rate.
RV Refinancing Costs
In addition to the interest you’ll pay on a refinancing loan, there may be other fees involved. These include administration fees and origination fees. There may also be a flat rate or a percentage of the loan value fee, too.
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RV Refinancing Tips
Financing an RV, or refinancing one, is a lot like applying for an auto loan. Here are tips for finding a deal that can save you money.
Weighing Your Options
Start by shopping around for the best rate you can qualify for. Often, you can get preapproved with many lenders and your credit score will only take one hit.
You can start with your bank to refinance your RV loan and look into online lenders, which may be more flexible in their criteria to qualify for refinancing. Also, check with the company you have your current RV loan with to see what refinancing options they offer.
If you want a lower monthly payment, shop for a loan that offers a longer repayment period. Just be aware that you may pay more in interest over the life of the loan with a longer term.
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Knowing Your Budget
Just like with auto loan shopping, you need to understand your budget when refinancing an RV. Start your loan search by knowing what you’re paying for your existing RV loan, including interest rate and monthly payment. If you want a lower interest rate, only consider loans that offer less than what you’re paying. If you prefer to lower your monthly payment, look for a longer loan term than the one you currently have.
Getting a Deal
RV loans may vary wildly in their interest rate and terms, so spend plenty of time exploring the options. If you have questions, call and speak to the lender. In addition to saving money, you also want to work with a lender who is responsive, available, and demonstrates excellent customer service.
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RV Refinancing Benefits
Refinancing RV vehicles offers perks. The first is that you may be able to refinance the loan at a lower rate than you are currently paying. Interest rates fluctuate over time, as can your financial situation. For instance, your credit score may be higher now than it was when you got your first RV loan, and you may qualify for a lower interest rate.
A second benefit is reducing your monthly payment. If your first RV loan payment is weighing you down, refinancing could let you extend the number of years you have to repay the loan, which will lower your monthly payment. Keep in mind, though, that you’ll pay more in interest over the life of the loan if you extend it.
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Explore Refinancing Options
Refinancing an RV will take a little time and research as you investigate your options, but it can be well worth it by saving you money on interest or lowering your monthly payment.
If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.
FAQ
Is there financing available for RVs?
Yes, there are loans specifically designed for people who are buying RVs. Just be aware that the RV serves as the collateral for the loan. If you can’t pay off the loan, the lender can repossess the RV.
What credit score is required for RV financing?
The credit score needed for RV refinancing varies by lender. Some lenders require scores as high as 680. Others will work with you if you have bad credit, but they may charge you a higher interest rate for the loan.
How long should I wait to refinance my RV?
Generally, you should wait 6-12 months to refinance your RV, giving time for improved credit, interest rate changes, or increased equity. Refinancing sooner may not yield significant savings and could involve additional fees. Waiting also allows for a payment history that makes you a stronger refinancing candidate.
Photo credit: iStock/GoodLifeStudio
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