If you’re planning to purchase an RV, it may be smart to finance the vehicle with a loan rather than paying cash. But what you might not realize is that interest rates can make a big difference in the cost of financing your RV. In fact, RV loan interest rates can vary greatly depending on your credit score, financial health and other factors. Read on to learn more about the types of RV loan interest rates you might face, as well as how you can minimize your loan costs and maximize your potential savings.

Most RV loans are secured by the vehicle being purchased, meaning the lender can repossess the RV if you fail to repay the loan. This extra layer of protection helps lenders offer lower rates than they would for unprotected loans like personal loans or credit cards. But this also means that it’s more difficult to qualify for an RV loan if you have bad credit. That’s why it’s important to shop around for rates and terms, even if you have good credit.

You can get an RV loan through your bank, credit union or a private lender. In general, you’ll likely find better RV loan rates through private lenders because they have fewer restrictions on who they will lend to. That’s because private lenders tend to be more interested in the borrower’s ability to repay the loan than they are in the specific details of their credit history.

In addition, it’s important to evaluate the lender’s reputation. Ask friends and family for recommendations and compare online reviews of the lender you’re considering. This will help you determine whether the lender has a track record of treating borrowers fairly and providing them with competitive rates and terms.

Another option is to save up for a larger down payment on the RV and pay cash, which can significantly reduce your overall loan costs. That’s because the loan amount will be smaller, so you’ll have a lower monthly payment and less total interest paid over time.

RV Loan Calculator

If you’re shopping for a new or used RV, it’s worth using an online RV loan calculator to estimate your potential monthly payments and total interest paid over the life of the loan. Then, once you know how much you’re able to afford to pay per month, use an RV calculator to determine the best loan term for your budget and needs.

To qualify for the lowest RV loan rate, you’ll need a strong credit profile. That typically means a credit score above 670, though some lenders may accept scores as low as 560. If your credit score is below this range, you’ll want to focus on lenders that specialize in working with subprime borrowers, and you should work to improve your score before applying for an RV loan. You’ll also want to avoid taking on too much debt, as this will increase the amount of your monthly payments and increase your total loan costs over the lifetime of the loan.