|When you take out a loan and finance an RV, you pay significantly
more for that RV than if you had just paid cash for it. Since many
folks can't afford to simply walk in and pay cash for a new or used
RV, RV loan financing is the way to go. The goal is to get the RV
you want, without paying an arm and a leg for it. for your RV over
The "cost of money", as they say, is the actual cost you pay to the lender for the money you borrow. In other words, there is the amount of money you borrow, then, there is what you pay the lender to use the money - you usually pay the lender in the form of points, origination fees and interest.
RV Loan Interest Rates
Interest rates on these types of loans are often tied to the Libor index. Many lenders start with this index, then tack on "their" interest. You will find that you will typically get the best interest rates offered to you, when you are purchasing a vehicle above a certain price threshold - the "sweet spot" for the financing institution. Another factor is the amount of downpayment you offer up. Typically, the greater the downpayment, the less risky you are for the lender, the lower the interest rates.
You can work with a direct lender, that will offer you only the programs they offer, but, at the same time, may be able to offer you more incentives and be a bit more flexible. Or, you can work with a loan broker that can offer you a variety of new and used rv loan program options from a selection of sources. This route offers you more selection, but, typically, less flexibility.
Another plus of financing your RV, is that, often, you can write off the interest you pay on the loan as a second home mortgage. Rates are still low. Compared to tapping into savings, that could have been invested in cashflow or appreciating investments, financing your RV purchase can be a way to save yourself money, and put your cash to better use.
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