While the decision to purchase an RV is a thrilling step, the process of financing the purchase can be daunting. Many buyers are asking the question of whether it is more reasonable to compare RV loans with personal loans. Both can get you on the road, but they’re very different. An RV loan is a secured loan utilizing your camper, motorhome or travel trailer as collateral. A personal loan, by contrast, is typically unsecured and offers you greater flexibility, but often at a higher interest rate.
The right option depends on your situation – your credit score, down payment ability, and the type of RV you’d like to purchase. For instance, credit unions, U.S. Bank or Camping World can provide long-term RV financing with lower monthly payments. At the same time, if you’re looking to fund purchases for older RVs, private-party RVs, or even van conversions, several personal loans provided through recommending lenders like LendingTree or Credit Karma‘s recommended lenders can help you cover the costs. By weighing APR, loan term, and total interest, you can make an informed decision that best suits your balance between affordability and flexibility.
In this guide, we’ll explain how RV loans and personal loans work, their advantages and disadvantages, and the hidden costs you should be aware of. We’ll also look at examples of monthly payments, what lenders require, and how in some cases one option may be an obvious choice over the other.
How Each Loan Works
What Is an RV Loan?
An RV loan is a secured loan that uses your motorhome, travel trailer or camper as collateral. This means the lender attaches a lien to the title of the RV and if a payment is not made, the lender can repossess it. Most banks, credit unions, and even RV dealerships such as Camping World or Alliant Credit Union offer financing for RV. Loan terms are typically longer than other loans-often 10 to 20 years-long, which can help keep your monthly payment low. However, most RV lenders will need a 10% to 20% down payment, and your credit score and debt-to-income ratio (DTI) will be checked before approval.
RV loans are popular with buyers who are purchasing new or high-end RV models such as a Class A motorhome or fifth-wheel trailer. Due to the collateral backing, you may be able to qualify for a lower APR than unsecured options. The trade-off is that you’re committed to longer repayment terms, and therefore, more money spent on interest over time. You can use RV Loan Calculator to estimate the amount of loan and interest.
What Is a Personal Loan?
Unlike more traditional loans, a personal loan is typically unsecured, which means that your RV or another asset isn’t used as collateral. Online financial services, Credit Karma’s recommended banks, and other lenders like Lending Tree can approve these loans in days. Term is shorter for each loan (usually 2 to 7 years) but monthly payments are higher, and because the loan is repaid in a shorter time, you may save on long-term interest.
Personal loans are typically more suitable for smaller purchases, used vehicles, private-party sales, or even DIY van conversions. They also allow you to use the funds in related expenses such as upgrades, insurance, or repairs. The downside is that the interest rate is typically more than secured RV loans, particularly if you don’t have great credit.
Rates, Terms & Monthly Payment Impact
When comparing RV loans and personal loans, the biggest difference comes down to APR, loan terms, and monthly payments. These three factors decide how much you pay every month and how much you end up paying overall.
RV Loan Rates and Terms
RV loans usually come with lower interest rates compared to personal loans because they are secured by the vehicle. If you have excellent credit, you may find rates in the single digits through lenders like U.S. Bank, First Citizens Bank, or credit unions. The terms are much longer, often 10 to 20 years, which means your monthly payments are lower. For example, financing a $60,000 motorhome over 15 years will keep your monthly cost smaller, but because of the long term, you’ll likely pay more in total interest.
Personal Loan Rates and Terms
Personal loans typically have shorter terms—between 2 and 7 years—and higher APRs because they are unsecured. Online platforms like LendingTree or Credit Karma’s lending partners may approve you faster, but you’ll likely pay more per month. For example, if you borrow $30,000 with a 5-year personal loan at a higher rate, your monthly payment could be almost double compared to an RV loan, though you’ll pay less total interest in the long run.
The Monthly Payment Trade-Off
The key difference is simple:
- RV loans = lower monthly payment, higher total interest
- Personal loans = higher monthly payment, lower total interest
If your goal is to make RV ownership affordable month-to-month, an RV loan may be the better fit. If you want to pay off your debt quickly and avoid years of interest, a personal loan may be smarter.
Eligibility & When Each Is Easier to Get
Getting approved for an RV loan or a personal loan depends on a few key factors, such as your credit score, income, debt-to-income ratio (DTI), and the type of RV you plan to buy. While both loans can help you finance your purchase, the approval process is not the same.
Eligibility for an RV Loan
RV loans are generally harder to qualify for because they are considered luxury loans. Lenders like Alliant Credit Union or U.S. Bank usually require:
- A good to excellent credit score (often 680+)
- A down payment of 10–20%
- Proof of steady income and low DTI
- A newer RV that meets the lender’s age and mileage requirements
Since the loan is secured, the lender wants to make sure the RV holds enough value as collateral. If you’re buying a new Class A motorhome or a fifth-wheel trailer from a dealer, you’ll have a better chance of getting approved for RV financing.
Eligibility for a Personal Loan
Personal loans are typically easier and faster to get because they don’t require collateral. Online platforms like LendingTree and banks that partner with Credit Karma often allow you to check your rate and prequalify within minutes. Lenders usually look at:
- Your credit score (higher scores mean lower APR)
- Income and employment history
- Existing debts
Personal loans are especially useful when the RV is older, bought from a private seller, or doesn’t qualify for traditional RV financing. For example, if you want to purchase a used camper van or finance a DIY conversion project, a personal loan is often the only realistic option.
Costs Beyond APR
When it comes to RV loans versus personal loans, most people look at the interest rate (APR) as a reason to choose one loan over another. While APR is important, it’s not the only cost you’ll incur. Additional costs: Both types of loans can come with additional costs that impact the overall cost of RV ownership.
Down Payment
Almost all lenders require a down payment on an RV loan, typically 10-20% of the purchase price. For instance, if you’re financing a $50,000 travel trailer, you might be required to pay a down payment of $5,000 to $10,000. Personal loans typically don’t need a down payment, so they’re easier to get if you don’t have cash on hand.
Origination Fees and Loan Charges.
Some lenders will charge origination fees, application fees, or processing fees. These fees can be taken from the loan amount and are included with the personal loans, especially the online ones. With RV loans, there may also be title and lien recording fees, which secure the RV’s title as collateral.
Insurance and costs of ownership
Most RV lenders insist that you carry comprehensive and collision insurance on the RV with full coverage. This safe-guard the lender’s investment but raises your monthly expenses. Personal loans don’t require insurance, but you’re still asked to comply with the state laws for car coverage.
Depreciation and Negative Equity.
RVs are depreciated rapidly, most during the first few years. If you take out a long-term RV loan, it’s possible for you to end up owing more than your RV is worth, a phenomenon known as negative equity. This means it will be harder to sell or trade in your RV that won’t lose you money. With a shorter term personal loan, this risk is less as the balance is paid off quicker.
Pros & Cons Side-by-Side
Both RV loans and personal loans can get you on the road, but each comes with strengths and trade-offs. Here’s a breakdown to help you see the differences at a glance.
RV Loan – Pros
- Lower monthly payments thanks to long terms (10–20 years)
- Potentially lower APR than unsecured loans if you have strong credit
- Builds an RV credit profile with lenders, helpful for future financing
- Works best for new or high-value RVs purchased from dealerships
RV Loan – Cons
- Requires collateral (the RV itself)
- Usually needs a 10–20% down payment
- Stricter approval process with higher credit score requirements
- Risk of negative equity because RVs depreciate quickly
- Longer repayment means more total interest paid
Personal Loan – Pros
- No collateral required, so your RV isn’t at risk
- Fast approval and funding (sometimes within a few days)
- Can be used for older RVs, private-party sales, van conversions, or upgrades
- Shorter terms (2–7 years) help you get debt-free faster
- Flexible — money can cover extras like insurance, gear, or repairs
Personal Loan – Cons
- Higher APR compared to secured RV loans
- Shorter terms = higher monthly payments
- Smaller loan amounts, may not cover a large Class A motorhome
- Interest is usually not tax-deductible (except in rare business cases)
Special Cases
Sometimes, your situation doesn’t fit the “standard” RV purchase, and that’s where choosing between an RV loan and a personal loan becomes even more important.
Financing Used or Older RVs
Most RV loan lenders have strict policies regarding the age, mileage, and condition of the RV. If you’re purchasing an older camper, travel trailer or used motorhome from a private seller, many banks won’t agree to a secured RV loan. In such a situation, a personal loan is usually the only way forward as it doesn’t rely on the value of the RV as collateral.
Van Conversions and Home Improvements
Camper van conversions have become increasingly popular in the last few years. Since most of these projects don’t qualify for traditional RV financing, many buyers rely on personal loans to fund expenses such as the purchase of the van, installation of solar panels, or interior upgrades. The versatility of a personal loan makes it a suitable option for creative builds.
Tax Considerations
There is also a difference with regard to the treatment of loan interest. Certain RV loans may be tax-deductible if the RV is viewed as a second home (with sleeping, cooking and bathroom facilities). On the other hand, personal loan interest is typically not tax-deductible unless the money is used for certain business purposes. As always, it’s best to consult with a tax professional before making decisions based on deductions.
Real-World Scenarios: Which Should You Choose?
Sometimes the best way to decide between an RV loan and a personal loan is to look at real examples. Your budget, the type of RV you want, and your credit score all play a role. Here are a few common situations:
Budget Buyer – Small Travel Trailer or Used Camper
If you’re buying a used RV under $20,000 from a private seller, a personal loan often makes more sense. Many RV lenders won’t finance older models or small trailers, but a personal loan gives you the flexibility to buy what you want without strict age or mileage rules.
New Luxury Motorhome – High Purchase Price
For a brand-new Class A motorhome costing $80,000 or more, an RV loan is usually the better choice. Lenders like U.S. Bank or First Citizens Bank can offer long repayment terms (up to 15–20 years), keeping your monthly payment more affordable.
Repairs, Upgrades, or Add-Ons
Maybe you already own an RV but need funds for repairs, solar panels, or interior upgrades. Since RV loans can only be used to purchase the vehicle itself, a personal loan is the better option here. It gives you the freedom to use the money however you want.
Rate-Sensitive Buyer – Strong Credit
If you have excellent credit and can shop around, you might qualify for a low APR RV loan through a credit union or trusted lender. But it’s still smart to prequalify for both loan types and compare the total cost of borrowing before making a decision.
How to Shop and Compare (Checklist)
Whether you choose an RV loan or a personal loan, shopping smart can save you thousands of dollars. Before signing any agreement, use this checklist to compare lenders and find the best deal.
- Prequalify with multiple lenders — Many banks, credit unions, and online platforms like LendingTree let you check rates without affecting your credit score.
- Compare APR, loan term, and total interest — A lower monthly payment may look attractive, but always calculate how much you’ll pay over the life of the loan.
- Look at fees — Watch for origination fees, late payment charges, and prepayment penalties. These can increase the real cost of borrowing.
- Check RV eligibility — Some lenders won’t finance RVs over a certain age or mileage. If your RV doesn’t qualify, a personal loan may be the better option.
- Review insurance requirements — RV loans often require full coverage insurance. Make sure you factor this into your monthly budget.
- Ask about prepayment policies — If you plan to pay off your loan early, confirm there are no penalties.
- Get the out-the-door cost — Ask lenders to break down the loan so you know exactly what you’ll owe each month and in total.
By following this checklist, you’ll have a clearer picture of which loan option works best for your situation and avoid costly surprises later.
Alternatives to Consider
If neither an RV loan nor a personal loan feels right, there are other financing options that may work depending on your needs and financial situation.
Home Equity Loan or HELOC
If you own a home, a home equity loan or HELOC (home equity line of credit) can offer lower interest rates than RV loans or personal loans. The risk, however, is that your home is used as collateral.
Dealer Financing
Many RV dealerships, such as Camping World, offer in-house financing. While convenient, dealer loans sometimes come with higher rates or extra fees, so always compare them with offers from banks and credit unions.
Credit Union Financing
Credit unions often provide some of the best rates for motorhome financing or travel trailer loans. They may also be more flexible with approval if you’re an existing member.
Paying Cash
If possible, paying cash is the simplest option. You avoid interest charges, monthly payments, and the risk of negative equity. This works best for smaller purchases or if you’ve been saving for an RV.
Example Numbers: RV Loan vs Personal Loan
To really see the difference between an RV loan and a personal loan, let’s look at a quick example.
Scenario: Buying a $30,000 RV
Option 1: RV Loan
- Loan amount: $30,000
- APR: 6.99% (secured loan, good credit, through a credit union)
- Term: 12 years (144 months)
- Estimated monthly payment: about $300
- Total interest paid: around $13,000 over the life of the loan
Option 2: Personal Loan
- Loan amount: $30,000
- APR: 12% (unsecured loan, average credit)
- Term: 5 years (60 months)
- Estimated monthly payment: about $670
- Total interest paid: around $10,000 over the life of the loan
What This Means
- The RV loan keeps your monthly payment low, but because of the long term, you end up paying more interest overall.
- The personal loan requires a much higher monthly payment, but you finish the loan faster and save money on total interest.
This example shows the classic trade-off: RV loans = lower monthly payments but higher total cost, while personal loans = higher monthly payments but lower overall cost. Your choice depends on whether you value affordability month-to-month or saving money in the long run.
Bottom Line
Determining whether to opt for an RV loan or a personal loan hinges on your budget, credit score, and the type of RV you’re interested in purchasing. An RV loan is typically a better option if you’re buying a new or high-cost motorhome and want lower monthly payments for many years. A personal loan, on the contrary, can be a better option if you’re purchasing a smaller or older camper, are in need of immediate funding, or want flexibility without having to use your RV as collateral.
The trick is to look beyond the initial aPR, and review the overall cost of borrowing in terms of fees, insurance, and the length of the period you’ll remain in debt. By comparing offers from banks and credit unions, online lenders like LendingTree, and others like U.S. Bank or Alliant Credit Union, you’ll be able to secure a loan that aligns with your travel aspirations and financial tolerance.
At the end of the day, the best loan is one that allows you to enjoy the RV lifestyle without any financial burden. Whether you’re hitting the road in a brand-new motorhome or upgrading a used camper, being knowledgeable about your financing options empowers you with the power to make informed decisions.
Leave a Reply