If you dream of living your life on the open road, then you might be thinking about purchasing a recreational vehicle (RV), trailer, or camper to make it happen.
However, if you search “trailer and camper loans” online you’ll be flooded with financing options. Many lenders, from dealerships and personal loan companies to credit unions and banks, offer products with the express purpose of financing your new wheels.
But before you sign on the dotted line and drive off the lot, here’s what you need to know about trailer and camper loans.
How to spot the best trailer and camper loans
Trailer and camper loans come in all shapes and sizes. When shopping around, make sure you’re looking at the APRs of offers, which include both interest rates and loan fees that borrowers are required to pay.
Also, be wary of promotional interest rates that are only attainable for some borrowers. You might need to have excellent credit, choose a specific repayment term, or borrow a minimum amount to be eligible for those low rates.
Don’t forget to include top online lenders in your rate comparisons. Although these online lenders might not market trailer and camper loans by name, they offer personal loans that could potentially be used to buy trailers, campers, or RVs.
Online personal loans might also include perks that more traditional lenders can’t match. SoFi, for example, offers borrowers unemployment protection — that is, the ability to pause loan repayment in the event of a job loss.
As long as you prioritize unsecured loans, you won’t have to fret about losing your trailer, camper, or RV. Only secured loans require you to put up collateral, which would likely be your vehicle that could be seized if you default on your loan.
How to weigh the costs of trailer and camper loans
Your dreams of comfortably crisscrossing the U.S. could be squashed by this fact: Paying for a vacation is one of the worst uses of a personal loan.
So unless you plan on making an RV, trailer, or camper your full-time home, consider these costs before using a loan to buy one.
Like other types of loans, trailer and camper loans are lent on credit. The stronger your credit history, the likelier you’ll score the lowest possible rate offered by a lender.
Say you already have a truck and are looking to borrow $15,000 for a new camper to attach to it. If you wanted to repay that amount over five years, here are the rates you could qualify for via USAA as of May 1, 2018:
- Excellent credit: 6.49%
- Good credit: 7.84%
- Fair credit: 9.44%
- Needs-improvement credit: 13.44%
Percentage points matter. Repaying that $15,000 at 6.49% would cost you $2,605 in interest, according to our personal loan calculator. If you swapped in a 9.44% interest rate, your interest burden would climb to $3,875. And that’s without considering capitalizing interest should you miss a monthly payment.
Unfortunately, not all lenders offer low rates. Personal loan rates can climb to as high as 36.00% for borrowers with poor credit, according to ValuePenguin.
Like bad-credit auto loans, be wary of trailer and camper loans offered at high interest rates. Missing a payment or defaulting on a loan with a sky-high interest rate could torpedo your finances.
Financing an RV is a lot different than buying a car. For one, an RV could cost you six figures if you’re looking for a new model with all the bells and whistles.
On the plus side, trailer and camper loans allow borrowers to finance a sizable chunk of their major purchase. Although many personal loan companies top out their offerings at $50,000, larger banks such as SunTrust or U.S. Bank could provide you with $100,000 or more in funding.
The downside is that even if you can afford to repay a larger amount, RVs, like cars, are depreciating assets.
Bankrate estimates your RV will lose as much as 30% of its value the moment you turn on the ignition. Although the decline might not be as steep for a trailer or camper as it is for a motor home, you could still end up paying much more for your purchase than it’s presently worth if you finance it through a loan because of interest.
Say you have excellent credit and qualify for a 6.49% APR attached to a $50,000 loan with a five-year repayment term for a top-of-the-line fifth-wheel trailer such as the Keystone Sprinter. You’ll end up paying $58,684 in total because of interest, more than the starting sale price of $49,718 for the trailer.
You’ll also pay significantly more than what the vehicle will be worth when it’s older. If you tried to sell it, for example, you’d likely be looking at a loss.
Are trailer and camper loans right for you?
Trailer and camper loans offer many of the conveniences of other loan types. You could handle everything easily online and work with a lender that might promise to beat a competitor’s rate, such as LightStream. Another lender might have same-day approvals.
But be sure to weigh the cons of these loans alongside the pros. Borrowing more than you can afford to repay for a vehicle that will only decrease in value might not be the wisest decision.
Note: Student Loan Hero has independently collected the above information related to RV, trailer, and camper loans. Financial institutions mentioned in this piece neither provided nor reviewed the information shared in this article.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|