RV Financing

RV financing in Canada allows you to finance the purchase of a recreational vehicle through a loan. Banks, credit unions, and RV dealerships offer RV loans so you can pay for your RV over time rather than paying the full cost upfront. RV loans have longer terms than auto loans, often 10-20 years, to keep payments affordable given the high cost of RVs. You’ll need a good credit score to qualify for the best RV loan rates in Canada.

Interest rates on bad credit RV loans are typically quite high compared to rates for borrowers with good credit. Expect rates from 10% to 20% or higher, depending on your specific credit situation. The better your credit score, the lower your interest rate will be. Anything under 12% is considered excellent for bad credit.

Most lenders recommend a minimum credit score between 660-700 to qualify for RV financing in Canada. The higher your score, the lower your interest rate will be. Anything below 650 and you may have trouble getting approved. Focus on improving your credit before applying for an RV loan by paying bills on time, paying down debts, avoiding new credit applications, and correcting any errors on your credit report. A score of 720+ will get you the very best RV financing rates.

The main options for RV loans in Canada are:

Banks – Major banks like RBC, TD, Scotiabank, and CIBC all offer RV financing. Banks typically have competitive rates but can have stricter approval criteria.

Credit Unions – Local credit unions often provide RV loans and may offer better rates than big banks. They’re worth checking out.

RV Dealerships – Many RV dealers partner with lenders to offer in-house financing. This is convenient but dealer interest rates tend to be higher.

Private Lenders – Specialized RV lenders like Route 66 Financial and Lendcare provide loans with flexible terms for both good and bad credit.

Personal Loans – Banks and online lenders offer personal loans that can be used to finance an RV if you don’t qualify for an RV-specific loan.

Many lenders do offer bad credit RV refinancing loans. These enable you to get a lower interest rate to reduce your monthly payments or access cash by tapping available equity. Lenders will appraise your RV to ensure the loan-to-value ratio meets their requirements before approving a refi.

Current RV loan interest rates in Canada range between 5-15%, depending on your credit score, down payment, loan term, and lender. Applicants with excellent credit scores (720+) can qualify for rates around 5-7% at banks and credit unions. Those with poor credit (below 650) will see higher rates from subprime lenders, closer to 15%. The average RV loan rate is currently around 10% APR. Compare rates from multiple Canadian lenders to find the best financing option for your needs and budget.

Most lenders in Canada will approve you for an RV loan amount up to 125% of the purchase price, though some may go a bit higher. So if you’re buying a $100,000 RV, you may be able to borrow up to $125,000 to cover the sales price plus taxes, fees, insurance, and any extra accessories or upgrades. The maximum loan amount also depends on your income, credit score, and ability to make the monthly payments. Expect higher loan-to-value and longer terms from private lenders that specialize in RV financing.

RV lenders in Canada usually require a minimum down payment of 10-20% of the purchase price. So on a $60,000 RV, you’ll need around $6,000-$12,000 down. A larger down payment reduces the amount you have to finance, lowers your monthly payments, and improves the chances of loan approval. Some private lenders offer RV financing with little to no money down for borrowers with good credit, but interest rates are higher. For the best rates, aim for a 20% down payment if possible.

When applying for an RV loan with a bank, credit union, or dealership in Canada, be prepared to provide:

Proof of income – Recent pay stubs, tax returns, profit and loss statement if self-employed.

Down payment funds – Bank statements showing you have cash for the down payment.

Collateral – The RV itself serves as collateral. Have the VIN, mileage, and condition info ready.

ID – Driver’s license or other government-issued ID.

Proof of insurance – Get an RV insurance quote so you know this cost.

Having these documents ready will make the application process much smoother.

Making a down payment of 10-20% or more is advisable when financing an RV with bad credit. The larger your down payment, the better the loan terms will be. A higher down payment shows the lender you are financially committed. It also lowers the amount borrowed so monthly payments are more affordable.

RV loan terms in Canada generally range from 5 years up to 20 years. The longer the term, the lower your monthly payment will be since the loan cost is spread out over more time. But you’ll pay more interest over the life of the loan. Common RV loan terms include:

5-year – Best if you plan to pay off the RV quickly. Higher payments.

10-year – A good middle ground term to balance payments and interest.

15-year – Keeps payments low but interest paid increases significantly.

20-year – Allows very low payments for maximum affordability. Highest interest costs.

Choose the shortest term you can afford to save on interest charges. You can always pay off your loan early.

Yes, getting pre-approved for an RV loan before shopping is highly recommended. Pre-approval provides you with a letter stating how much the lender is willing to finance at what interest rate, based on your credit and income. Showing RV dealers proof of your pre-approval will give you stronger negotiating power and financing security when you find the RV you want. The pre-approval process is quick and doesn’t affect your credit score.

If you have bad credit (scores below 650), your options for RV financing in Canada include:

Subprime lenders – Specialized lenders provide RV loans to borrowers with poor credit at higher interest rates.

Co-signer – Asking a friend or family member with good credit to co-sign improves your chances.

Down payment – At least 20% down shows lenders you’re committed.

Secured loan – Using the RV as collateral reduces risk for the lender.

RV dealerships – Dealers arranging financing may be more flexible than banks.

Personal loans – Unsecured personal loans can be used as alternative RV financing.

With some effort, you can find bad credit RV financing, but expect higher rates and costs.

When budgeting for your RV financing, be aware of these common fees:

Interest charges – By far the largest expense over the loan term.

Origination fee – Upfront fee charged by the lender, often 1-2% of loan amount.

Documentation fee – Cost for preparing your loan documents, $50-$500.

Title and registration fees – Paid to register the RV title and license plates.

Dealer fees – Dealers may charge doc fees, prep fees, etc. that get financed.

Insurance – You’ll need full-coverage RV insurance for the duration of the loan.

Property tax – RVs over a certain value are subject to annual property tax in some provinces.

Read the fine print so you understand all costs before signing your RV loan agreement.

Yes, many lenders allow trade-ins on bad credit RV loans. The value of your old RV would go towards the down payment on the new one. This reduces your out-of-pocket expense. Be aware that you may end up with negative equity if you still owe more than your trade is worth. This gets added to the new loan.

Tips for scoring the lowest RV loan interest rate in Canada:

Shop multiple lenders – Compare quotes from banks, credit unions, and specialized RV lenders.

Improve your credit – Work on increasing your credit score above 720 before applying.

Make a large down payment – At least 20% down looks attractive to lenders.

Shorten the term – Opt for a 5 or 10 year term instead of 15+ years.

Become a member – Credit unions offer better rates for their members.

Consider used RVs – You can often get lower rates on used RVs less than 10 years old.

Offer extra collateral – Pledging other valuable assets besides the RV itself.

Taking these steps can help you secure the most competitive RV financing rate in Canada.

Banks and credit unions are good options for RV financing in Canada thanks to competitive interest rates, flexible terms, and potential member discounts. The advantages of getting your RV loan through a bank or credit union include:

Established relationships – Existing accounts improve chances of approval.

Lower rates – Banks offer prime rate financing around 5-8% for good credit.

Flexible terms – Long loan terms of up to 20 years to keep payments low.

No prepayment penalties – Allows you to pay off your loan early with no penalty.

Member discounts – Some credit unions offer rate discounts for members.

Just be aware that banks and credit unions have stricter credit requirements and full documentation of income is needed. Overall they offer affordable RV loan options worth pursuing.

While convenient, there are some potential downsides to watch for with RV dealer financing in Canada:

Higher interest rates – Dealers often charge rates of 10-15% through their lender partners.

Loan packing – Unwanted items and fees can get packed into the loan amount.

Limited-term options – Dealers may push short terms of 5-7 years to keep payments high.

Prepayment penalties – Review the contract to avoid penalties for paying off early.

Lower loan amounts – Dealer financing may only cover a portion of the RV’s cost.

Credit requirements – Standards may be loose resulting in excessively expensive loans.

To get the best deal, compare dealer financing to loans from your bank and credit union first before deciding.