There are many budget accommodation options on the Island of Rab Croatia.

You can find inexpensive private accommodation like Badurina, Banjol 169, 51280, www.badurina-rab.com/apartments.htm with spotless rooms within easy walking distance from both the sea and the town and within meters of a supermarket. The view of Rab from the terrace is breathtaking. The family who run the business is friendly helpful and genuinely good people.

With a little internet research, you can also find backpacker and youth hostels. 

There are also plenty of inexpensive hotels and bed & breakfasts in town, if that type of accommodation suits you better. Click to go to the TA Pages for Rab