What Is The Minimum Credit Score For An RV Loan?

More and more Americans hit the roads with recreational vehicles to enjoy nature, experience outdoor activities or to try a new form of traveling without the conventional mode of transportation. Recent studies conducted by Harris Interactive survey show RV trips enable the RV owners to enjoy quality family time and nurture stronger bonds with the loved ones.

The RV sales registered a double-digit growth last year and has seen a fourth consecutive gains since 2013. According to Recreational Vehicle Association (RVA) , RV shipments saw an increase by 17.2 % in 2017 compared to the previous year, an impressive gain given the high prices of the RVs. The RVA data showed the number of RV shipments for the year 2017 totaled 504,599 units, up 73.908 units from 2016.


recreational vehicle

Credit Score Requirement for an RV Loan

If you’re considering buying an RV and seeking financing for your purchase with a personal loan, the first thing to consider is the credit score requirement.  As with other financing schemes, most lenders will want you to have a good credit score to minimize the risks associated with bad credit. To be eligible for an RV financing you need to have a credit score of 640 or over, depending on the lenders some require you to have at least FICO score of  700 points.

There are few instances where few lenders that are willing to grant an RV  loan to people with poor credit (those with credit scores under 600). However, the lenient policy comes with a price you need to pay, i.e., if you will need to pay substantially higher rates than paid by those with excellent credit scores.

There are substantial sections of the population with a fair credit score of 650 points who aspire to become an RV owner.  If you’re part of them,  congratulations! , you at least qualify the pre-approved requirements for an RV loan. If you’re not eligible yet, you may want to build your credit and get your house in order first.

If you fit into the category of people with bad credit yet want to go for an RV loan, you will need to improve your credit score to above 700 points.  Repairing your credit should be of your utmost priority because, unlike home equity loan or a student loan, lenders count an RV purchase with a personal loan as loans for a luxury item. Lenders lump RV loans with other nonessential loans such as boat loans since not everyone wants to shell out hundreds of thousands of dollars for a travel trailer.


minimum credit score for rv loan

How to Increase the Odds of Loan Approval for an RV financing

Getting qualified for an RV loan does not only depend on your credit rating, but there are other factors lenders take into their considerations before they approve your loan application. Before extending you the loans, they will pull hard inquiries on your credit report to look into your creditworthiness and credit history.

Before seeking an RV financing make sure :

  1. You don’t skip or make late payments on your other loans such as mortgage, personal loan, student loan or different types of loans you may owe to creditors.
  2. You have a good Debt to Income Ratio (DBI). The DBI is one of the essential parameters used by lenders to measure your ability to manage monthly payment and repay loans you owe to creditors. DTI is expressed as a percentage and is calculated by dividing total recurring monthly debt by gross monthly income.

RV Loan Interest Rates And Loan Term

You can finance an RV purchase for up to 20 years for the costlier models, and up to 12 years for RVs that cost less than $25.000.

RV loan rates vary depending on the borrowers, the state you live in, the loan amounts and length of installments and your credit score. Sam Finance Centers, one of the lenders specialized in RV financing currently has an APR between 4.99 % 5.99% for new, used RV purchases. Most RV lenders have the same APR irrespective of loan amounts or the type of financing if you want to refinance your purchase they usually charge you the same refinance rates. They typically do not charge an application fee.

Things To Consider Before Applying for an RV Loan

Before getting an RV loan and going to an RV dealership, you may want to consider the following things:

  1. Many RV dealership salespersons tend to inflate the prices to get as much commission as possible. Before you snap your long-dreaming RV, you may want to negotiate on the prices and ask them to give you the best price.
  2. Having an RV with bedrooms and a toilet such as a park model may incur taxes because the IRS will count it as your residence instead of a recreational vehicle.
  3. The maintenance costs are higher than auto maintenance. Getting an RV comes with costly routine maintenance, an RV inspection can cost you a bundle. You need to consider these costs before going to RV dealers and buy one.

In Summary

The chance of  an RV loan getting approved depends on your credit score and some other factors like credit history and debt-to-income ratio. The typical credit score requirement for an RV loan is 640 or over, depending on lenders. There are a couple of things to factor in before applying for the loan such as routine maintenance costs and additional taxes you may incur if you consider buying an RV which you will use as your permanent residence.




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