So, here are six quick caravan finance tips designed to help you get the best deal possible:
1. Shop around for the best interest rate
The first tip for caravan finance is to shop around for the best interest rate. Caravan loans are typically secured against the caravan, so the interest rate will be lower than an unsecured personal loan. However, there can be significant differences in the interest rates offered by different lenders, so it’s important to compare rates before you apply for a loan. A specialist finance broker will help you do this without the need for you to do all the research.
2. Use a caravan loan calculator
A caravan loan calculator can help you work out how much you can afford to borrow and what your monthly repayments will be. This is a useful tool if you’re not sure how much you can afford to spend on a caravan. Our caravan loan repayment calculators allow you to model loans at various interest rates, repayment terms and loan amounts. We also include detailed loan amortization charts so that you can see the interest paid and ca[ital reduction over the term of the loan.
3. Get pre-approved for a caravan loan
Getting pre-approved for a loan before you start shopping for a caravan can save you considerable time and money. Some dealerships offer discounts for customers who have pre-approval, so it’s worth asking about this before you start negotiating the price of a caravan. Use our free online loan eligibility assessment to find out if you qualify and to access our caravan finance broker panel for comparative rates and options from multople lenders. Your finance broker can then step you through the loan pre-approval process.
4. Make a deposit
Making a deposit on your caravan will reduce the amount of interest you pay over the life of the loan. If you have a deposit saved up, it’s worth using it to reduce the amount you need to borrow. The larger the deposit, the better. A larger deposit from you means lower risk for the lender, so you may even qualify for a lower interest rate if you have sufficient equity in the caravan. Talk to your finance broker about lenders that provide lower rates for a bigger deposit.
5. Choose a shorter loan term
Choosing a shorter loan term will save you money in interest charges, but it will also mean higher monthly repayments. If you can afford the higher repayments, opting for a shorter loan term is a great way to save on interest and pay off your caravan sooner. Our caravan loan calculator will illustrate the amount of interest that you can save with a shorter term loan.
6. Make extra repayments
If you have the opportunity to make extra repayments on your caravan loan, do it! Making extra repayments will reduce the amount of interest you pay and help you pay off your loan faster. Not all loan agreements will allow you to do this however, so your finance broker can identify the lenders that offer caravan finance contracts with the ability to pre-pay your instalments or to make lump sum payments in order to save interest.
Published: Monday 10th October, 2022
Last updated: Tuesday 2nd May, 2023
