Caravan Finance

One of the major benefits of a caravan loan is the ability to purchase a caravan (or other recreational vehicles such as a motorhome, camper trailer or toy hauler) immediately and pay it off over time.

With a caravan loan you could head away in a caravan that you may otherwise not be able to afford with just your savings alone.

Like any lending product, if you correctly manage your caravan loan and repay it on time – consistently, it can have a positive impact on your future loan requirements by demonstrating to leaders that you are a reliable and lower risk customer.

A caravan loan may also assist in building up a positive Credit Profile and Credit Score. Maintaining a good Credit Profile, can be of great benefit when it comes to purchasing other assets such as a car, home, boat or even equipment.

A caravan loan is a type of loan used for the specific purpose of buying a new or used caravan including camper trailers and toy haulers (often referred to as a “secured caravan loan”).

When you take out a caravan loan, you borrow an agreed amount of money (loan amount) from a financier (lender) for a set period of time (loan term) that you agree to repay in weekly, fortnightly or monthly repayments.

Loan repayments are calculated based on paying back the amount borrowed, interest payable on the loan and any fees charged for setting up the loan. The interest rate you pay is largely determined by the lender based and on a number of factors such as the age and value of the caravan you are buying, the lenders specific criteria; and your credit profile/credit score.

Caravan Finance is generally available as either a secured loan or unsecured loan. Which one will depend on if you agree to use the caravan as security on the loan or not (which is a very common arrangement).

If you do put your caravan up as security on the loan, it reduces the risk to the lender in the event you are unable to meet your repayments or financial commitments of the loan. This reduced risk to the lender often means they can offer a lower interest rate or more favourable terms. A 'Secured Caravan Loan' generally is only available up to the value of the caravan.

An Unsecured Caravan Loan however, does not use the caravan as security, and therefore the risk to the lender is greater and the interest rate often is higher.

There is no ‘absolute' limit for how much you can borrow with a caravan loan. Each financier (or lender) has different minimum and maximum loan amounts, but mostly the loan limit is determined on a case-by-case basis depending on your choice of caravan, the type of loan and your personal financial circumstances.

As a general guide, many Australian lenders have a minimum borrowing amount of $5,000 or $10,000.

In some cases, you may not be able to borrow the full amount of the caravans purchase price, but will be required to provide a portion of the caravans purchase price via a deposit (or down payment). For Secured Caravan Loans, you generally cannot borrow more than the total value of the asset used as security on the loan.

The first stage of the caravan loan process is to find out how much you can borrow, what you can afford and if this amount is enough to purchase your dream caravan. An online Caravan Finance Calculator can give you a quick idea of what your caravan loan repayments might be; or how much you may be able to borrow based on your weekly budget.

The next step is to contact a Finance Specialist who will quickly assess your basic information and financial circumstances before guiding you through the loan process to receive caravan finance pre-approval.

Once you are happy with the proposed loan structure (term, amount, interest rate etc) your application will be submitted to the selected leader for Settlement of the Loan. When the loan ‘Settles’ the money will be transferred to the caravan seller (private or dealership) and the caravan, camper trailer or toy hauler is yours - and away you go!