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Financing an RV

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Anonymous
Not applicable

Financing an RV

I am about to finance a 5th wheel RV and am curious whether it is considered a vehicle or a home.  Certainly my eligibility will depend on this...has anyone else experienced this situation?

Message 1 of 6
5 REPLIES 5
thom02099
Valued Contributor

Re: Financing an RV


@Anonymous wrote:

I am about to finance a 5th wheel RV and am curious whether it is considered a vehicle or a home.  Certainly my eligibility will depend on this...has anyone else experienced this situation?


Considered a vehicle or home by whom?  It is both.   And why would your eligibility depend on how it's classified?   Either you qualify for a loan or you don't, regardless of what type of loan it is. 

 

For licensing purposes, in nearly all states it is considered a vehicle and is subject to vehicle licensing guidelines and requirements. 

 

For tax purposes it is considered a 2nd home IF it includes cooking and toilet facilities, which most trailers/RVs have. The interest one pays on it is tax deductible as a 2nd mortgage. 

 

For insurance purposes, in many states, it is considered personal property, being neither a vehicle or a home.  My insurance on my trailer lists it as the year/make/model, but the cost is based on it being personal property and not a vehicle. 

 

As to the type of loan, most lenders will classify it as an RV loan...which it is.   RV loans are considered luxury loans, just as boat loans are, and usually have a higher interest rate versus a traditional vehicle loan.   When I first got my RV/trailer loan, my FICO scores were mid-700s and I had no problem qualifying for the loan. 

Message 2 of 6
Anonymous
Not applicable

Re: Financing an RV

Thanks for your response, thom02099, I found it both concise and informative...in other words, you answered pretty much all my questions!

Message 3 of 6
Glen_M
Frequent Contributor

Re: Financing an RV

I would be careful about where you finance through.  A bank or CU should be fine, but other lenders for a recreational/luxury item could end up being a CFA.



Message 4 of 6
thom02099
Valued Contributor

Re: Financing an RV


@Glen_M wrote:

I would be careful about where you finance through.  A bank or CU should be fine, but other lenders for a recreational/luxury item could end up being a CFA.


Yes.  Go with a trusted name whenever possible.  My credit union offered RV/Trailer loans but got out of that business as have many other credit unions.  Look to Good Sam RV loans (www.goodsamrvloans.com ), since they are a major lender and are tied in with Camping World.  My loan was originally through Essex Credit, which is a division of Bank of the West, and serviced through them.  USBank is also another major player in RV loans.  

 

Trailers are very difficult to assess value and depreciate at a different rate than motor homes.  Rates will vary based on the amount financed as well.  The more you finance, the lower the rate, generally speaking.  You get a better rate financing $40k vs $20K, and the term length will vary.  Some lenders won't go below a specific amount to finance, usually $10K. 

 

I do not work for any of these entities nor do I have a vested interest in any of the lenders mentioned. 

Message 5 of 6
LakeLife
Established Contributor

Re: Financing an RV

In 2003 I financed my RV with Wells Fargo.  The rate was great at the time, and they were good to deal with.  Obviously a well known name.  Good luck with the RV.  




Message 6 of 6
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