How this calculator works
An RV loan works like other instalment loans. The amount financed is the purchase price less your cash down payment and any trade-in credit, and it is repaid in equal monthly payments with interest compounded monthly. A longer term lowers the payment but raises the total interest, because interest accrues for more months. RV loans commonly run from 5 to 20 years depending on the amount and the lender. This model ignores sales tax, registration, dealer fees, extended warranties and any prepayment penalty. Add those costs to the price or to the amount financed if the lender includes them.
Formula
Principal = RV price - down payment. Monthly rate i = annual rate / 12. Payment = P x i / (1 - (1 + i)^-n) for n months; at 0% the payment is P / n. Total paid = n x payment and total interest = total paid - P.
Worked example
An $85,000 RV with a $17,000 down payment finances $68,000. At 8.5% over 120 months the monthly payment is $843.10, total payments are $101,172.32 and total interest is $33,172.32.
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Frequently asked questions
Are RV loans usually simple interest?
Most are simple-interest instalment loans, so interest accrues on the balance outstanding. Paying extra reduces the balance and therefore the interest, though some lenders charge a prepayment fee.
Does a longer term always cost more?
Yes, in total interest, unless the shorter term carries a much higher rate. The monthly payment falls with a longer term, which is why dealers often offer long terms.
Can I deduct RV loan interest?
In the United States, interest on a loan secured by a motorhome may qualify as home mortgage interest if the RV has sleeping, cooking and toilet facilities and serves as a qualified residence. The rules are specific, so confirm with a tax adviser. This calculator does not model tax.
What costs are missing?
Sales tax, title and registration, dealer preparation, insurance and any warranty are not included. Enter a price that includes the items you plan to finance, or add them to the amount financed.