Are You Ready for Your Dream Boat, RV or Motorcycle? (2023)

FAQs

What is a good interest rate for a boat loan? ›

What is a good interest rate for a boat loan? Borrowers with strong credit can expect boat loan interest rates in the 4% to 5% APR range for new and used boats.

Bank of America: Bank of America only offers RV loans indirectly through select dealerships. You won't be able to apply online on your own, or purchase outside of a dealership.

The best RV loan interest rates currently start around 4.49 percent for borrowers with excellent credit. However, the actual rate you receive depends on factors such as your credit score, debt-to-income ratio and annual income.

On average, RV loans range from 10-15 years, but many banks, credit unions and other finance companies will extend the term up to 20 years for loans of $50,000 or more on qualified collateral. Get a loan term up to 15 years¹ (180 months) for fixed RV loans with Mountain America Credit Union.

How Long Can You Finance a Boat? Even though the typical boat loan is approximately 120 months (10 years), it is possible to find lenders who will finance a loan for 180 months (15 years) or even 240 months (20 years). Generally, these will be secured loans, and the boat will be named as collateral.

Most people will finance a boat for about 10 years (On Average). the reason boat loans are longer is because banks and lenders recognize that boats hold their value far longer than cars.

For example, never tell an RV salesperson that you're new to RVing and are buying your first rig. This may lead the salesperson to try to get you to buy something you don't need. You'll be spending more money than necessary.

If you are considering purchasing a camper and are more patient than wealthy, save for it. A $10,000 loan financed for 5 years at 4% interest would have payment of about $185 per month. If you saved that same $185 you would be able to pay cash in 54 months (4 1/2 years) and save yourself over $1000 in interest.

Not everyone has enough money in savings to buy an RV outright, but if you do, you should consider skipping the loan. Paying in cash can mean huge savings, since you'll skip the lender fees and interest charges. Just be sure you don't deplete your emergency savings.

You'll generally find the best time to buy an RV is during late fall and winter. Fewer people shop during this period, and less competition means you'll have more negotiating power. You can also find bargains right before a new RV model is released, when gas prices are up, and at RV trade shows.

Is it smart to finance an RV? ›

Financing allows nearly anyone with a decent credit score and a saved-up down payment to purchase the RV of their dreams. You can set a monthly payment that's well within your budget so that you can confidently pay off your RV over a period of months or years, rather than having to have all the money for it at once.

What is the average lifespan of a travel trailer? At a minimum, your travel trailer needs to be able to last for 10 years. You might be able to prolong its longevity and add about two to five years by taking good care of it. However, some travel trailers can last up to 30 years with proper usage.

The RVIA sees this decline as a return to normal market trends, which it expects to carry over in 2023. As 2022 draws to a close, RV prices are declining across all classes but one. Class B motorhomes are still very in high demand, perhaps in response to high fuel prices.

Most RV loans are long-term, which can help keep your monthly payments low. Terms will vary depending on several factors, including the RV's age, credit history, et cetera. As for monthly payments, the average monthly payment for an RV will be anywhere from $225 to $650 monthly.

“An RV loan is typically a simple interest loan, similar to an auto loan, generally with longer terms,” Greene says. Typically, RV loans offer repayment terms of one to 15 years, but some lenders may even offer repayment timelines of as long as 20 years.

Most lenders will be looking for credit scores of about 700 or higher. You can get a boat loan with a lower credit score, but expect that you may have to pay a penalty in the form of a higher interest rate or a larger down-payment.

Even in the current boat-buying climate, the facts of financing a boat purchase remain the same. Buying a boat in 2022 is challenging—supply is low, demand is high, and waiting lists continue to grow as manufacturers play catch-up.

Financing a boat is way more expensive than buying it outright because you have to repay what you borrowed, including interest. Depending on your loan amount, you may have to pay thousands of dollars in interest over the life of the loan. You can lose your boat.

Boat loans through LightStream are offered from $25,000 to $100,000 with repayment terms ranging from 24 to 84 months. Current interest rates start from 5.99% with a 0.50% auto-pay discount.

The best time to buy a boat is typically in the fall. The weather is getting cooler, and the boating season is mostly over. Boats are coming out of the water and going into dry storage for the winter, and most people have finished shopping for boats until the spring.

Is it harder to finance a boat than a car? ›

Since cars generally have a smaller purchase price, you won't need to meet the same financial thresholds. In a similar vein, it can be harder to get a boat loan simply because you'll often need to provide a notably larger down payment.

The short answer is that the average lifespan of an RV is around 20 years or 200,000 miles, whichever comes first. But the answer isn't quite that simple. That number can vary depending on the class of your motorhome, how well you take care of it, and a few other factors.

Brand-new RVs start losing value as soon as they're driven off the lot and continue to lose value throughout the first year rapidly. The RV depreciation rate increases at a steady rate after that until your RV hits double digits in age. Once an RV is ten years old or older, its value drops more rapidly.

With an RV, there's less need to spend money on hotels or restaurants. And since you're saving money on accommodations, you can stay on vacation longer, spend more money on activities, and create possibilities where you had none before. If you choose a travel trailer, there's no need for a special vehicle to tow it.

The specific credit score you'll need to qualify for an RV loan will vary from one lender to another, with the most common score being 660. This is considered an average score, and many people will have no problem meeting this requirement. When considering you for an RV loan, your lender will look at several factors.

If you live thoughtfully, you can absolutely save money while living in an RV, even while traveling. But, if you're the kind of person who wants to stay at luxury RV parks and spend money on food and experiences, you might find it just as pricey (if not more so) than stationary life. There's no right or wrong here.

Cash Isn't King

In reality, RV dealers don't want cash. They make money with financing, which is just easy income to them on top of the initial price paid. The tip here is to negotiate, but do not commit to financing or tell them you're paying cash until the paperwork is delivered.

Yes, in most states, the interest on your RV financing is tax-deductible. This is typically available whether your RV is your primary or secondary home, though some states may have their own requirements.

Fiberglass wins hands-down in durability, shine and cleanliness. If you're looking at your RV as an investment, fiberglass RVs tend to hold their resale value much better than aluminum models.

Is buying an RV lot a good investment? ›

Generally, RV parks offer a higher ROI than most other types of commercial properties. According to most sources, you can expect anywhere from a 10% to 20% return on your initial RV park investment.

34% are between the ages of 18 – 54 and 66% are 55+.

People usually get loans to buy an RV through dealers, a bank, or an online lender. These financial products are far more varied than car loans since they can be secured or not. Having a secured loan means that if borrowers do not make their payments, the lender repossesses the motorhome.

In a classic example of supply and demand, the low RV supply during the pandemic drove up RV prices. With RVs, building supplies, and parts in high demand, prices increased to keep up.

Typically loan terms are offered at 36, 48 and 60 months.

What are the top five best RVs? According to our research, the top five best RV brands are: Grand Design, Airstream, Oliver Travel Trailers, Winnebago, and Newmar.

Fuel Efficiency

When comparing a diesel vs. gas motorhome, diesel motorhomes are much more fuel efficient. That is partly because diesel fuel has a greater energy value than gasoline does. Its higher energy density means that diesel fuel can offer up to 10 percent better fuel economy by volume.

Even though many four-season RVs come with thermal packages, which include extra insulation, it's still not enough for extreme cold weather RVing in sub-zero temperatures. If you're camping in extreme cold, put your RV in a skirt!

Modern Boat Financing Options

Boat loans used to be more limited in duration, but now typical boat loan terms of 10 to 20 years are standard. Interest rates are very low, and the down payments required these days can range anywhere from no money down to 20 percent.

What credit score do you need for a boat loan? Every lender has their own credit score requirements, but you can typically qualify for boat financing with a credit score of 600 or better. Those with a credit score above 700 will usually receive the best interest rates and lower down payments.

What kind of loan should I get for a boat? ›

Boat loans can be either secured or unsecured. Secured loans require collateral. In this case, the collateral would be the boat you are purchasing. If you do not want to run the risk of losing your boat, it may be a good idea to take out an unsecured loan.

Fact #1: Getting a boat loan is harder than getting an auto loan, but easier than getting a mortgage. Yes, securing a favorable boat loan can be tricky, and it's certainly not as easy as financing a car purchase at your local bank or credit union.

You can generally apply for up to a 20-year loan term for a secured boat loan, depending on the loan amount and lender.

The best time to buy a boat is typically in the fall. The weather is getting cooler, and the boating season is mostly over. Boats are coming out of the water and going into dry storage for the winter, and most people have finished shopping for boats until the spring.

For federal tax purposes, a boat or a recreational vehicle can be either your main or secondary residence, entitling you to take advantage of the same tax deductions as a homeowner of a typical house.

Most lenders will be looking for credit scores of about 700 or higher. You can get a boat loan with a lower credit score, but expect that you may have to pay a penalty in the form of a higher interest rate or a larger down-payment.

If you are looking at a marine gasoline-powered boat to purchase that has reached 1500 hours, this is considered a lot. Unless it has been meticulously maintained, its dependability is very questionable. Properly maintained diesel engines give boaters 5000 or more hours of dependable service.

Because boats tend to be more expensive than cars, it can be a bit more difficult to qualify for a boat loan than a car loan. However, eligibility requirements can vary by lender, so you can shop around and find lenders with criteria that work with your needs.

“A boat is typically owned for 2-5 years, so it's better to finance it and hold on to the cash for other uses.” Boat loans today can be for 10-30 years although most loan periods hover around 10-15 years. Major marine lenders specialize by the size of the loan.

Are boats a good investment? ›

Buying a boat can be a great way to boost your income or perhaps a way into starting your own side hustle. Buying a boat is a long-term investment, and when you factor in purchase costs, running and maintenance costs, the numbers can quickly add up.

You will have fewer costs

Mooring, insurance and fuel, as well as constant maintenance, repairs and winterising your boat are only a few of the costly expenses you'll have to reckon with. Remember that if your boat is a bit older or pre-owned these costs will increase significantly over time.

The lender usually requires that the boat be no older than a certain age, and most lenders won't finance a boat that is more than 20 years old. However, some will finance boats of any age and price range, but you may end up paying a higher rate and making a larger down payment.