Caravan Finance in Australia
All over Australia, caravans have become increasingly popular as a way to expand your car, ute, or pickup truck into a mobile apartment. However, affording a caravan can be a major barrier. This article presents information and strategies on finding the best caravan finance options so that you can get on the road for the best rate possible.
What is caravan financing?
Caravan finance is a way to get immediate funding for a caravan purchase from a lender. Similar to any other vehicle loan, you get to enjoy the full use of the caravan while repaying the loan amount in instalments. Multiple types of caravan loans in Australia are available to help cover the costs of buying a caravan. Whether you’re looking for caravan finance across Australia, there are options available for you.
Picking the Best Caravan Finance
To help make your caravan purchase more affordable, it is useful to understand the loan options you have available.
Caravan loan types
A secured loan means that the caravan itself will act as collateral for the loan, so it can be repossessed by the lender if you stop making payments.
An unsecured loan means that there is no collateral for the loan, so the caravan can’t be repossessed. However, this comes with higher interest rates.
Caravan loan interest rates
Fixed interest rates
Fixed caravan loan interest rates stay locked in for the whole life of the loan. The amount you pay is stable and will not change, making it predictable.
Variable interest rates
Variable caravan loan interest rates will change throughout the loan. The amount you pay is influenced by ups and downs in the overall economy.
Further sources of caravan loans
If you’re looking for alternative means of getting money for a caravan loan, these may interest you.
Low-doc loans Most loans require detailed salary records from your employer, but this can be difficult for self-employed applicants or others with irregular pay. Low-doc loans have minimal paperwork requirements.
Bad credit caravan loans A poor credit history makes it harder to find caravan finance options. Lenders are still available, but they view you as a greater risk and charge higher interest accordingly.
Joint application caravan loan If a friend or family member with strong credit is able to cosign a loan for you, that can be a way to access caravan financing. You would then share repayments with the co-borrower.
Specialised caravan loans Some lenders offer custom loans specifically designed for caravan buyers. These usually incorporate insurance, extended warranties, and credit protection plans.
What types of caravans can I finance?
Finance options are broadly available for all types of caravans and recreational vehicles. Caravans vary widely in terms of size, function, and features, all of which affect the price. When buying a caravan, consider what you will be using it for, how much time you’ll spend inside it, and how you’ll store and maintain it.
These are the conventional caravans that resemble a studio apartment on wheels. Their tall roofs make it easy to walk around, and block out wind and rain.
These are full caravans that also allow you to expand the ends of the van to make it even roomier.
These campers have a mechanical engine that elevates the roof, and the canvas walls around the edges create a tent-like structure.
These campers are compact and rounded, making them easier to tow and store. You generally cannot stand up and walk around in these.
These large caravans are hitched to the back of a truck. Their size is great for comfort and storage, but may bring certain driving restrictions.
RVs or motorhomes
These are 2-in-1 vehicles where the residential structure is part of the same vehicle that has the engine, as opposed to being towed in the back.
Steps for comparing caravan loan options
Follow these steps to make sure you get the best caravan loan that you’re eligible for.
Calculate how much you need to borrow.
Caravan loans have caps between $5,000 and $100,000, and will depend on your credit history and income.
Choose a loan term.
Loan terms range anywhere from one to ten years. The term is affected by the size of the loan and how much you are able to pay each month. A longer term typically means smaller monthly payments, but more interest paid back overall
Pick between a secured and unsecured loan.
Consider whether you are okay with the caravan serving as collateral for a secured loan, or if you’d prefer to go with an unsecured loan at the risk of higher interest rates.
Consider specific features and customizations.
Caravan loan interest rates can vary dramatically. Decide whether you favour a fixed or variable interest rate, and whether you’re interested in early repayment, redraw facilities, and payment schedule flexibility.
Dig into fees and extra costs.
Search for lenders that offer discounts or waivers on startup costs, like application fees and loan setup fees. Your budget should also accommodate caravan registration and insurance, dealer delivery charges, storage costs, stamp duties, inspection costs, and roadside assistance.
Consider a balloon payment.
A balloon payment means that at the end of the loan term, you’ll pay a lump sum to close out the loan. The advantage here is that it keeps your monthly costs low and shifts a greater bulk of the cost towards the end of the term. There are also refinancing options for balloon payments.
Submit your application.
To apply for a caravan loan, you’ll need to be 18 or older, be an Australian citizen or permanent resident, and have a government ID. You will also be asked for proof of income, proof of address, details on your other debts and expenses, and your credit rating.
Caravan loans Australia FAQ
Caravan loans, summed up
Caravans are a great way to get out on the open road while still enjoying many of your home comforts. While the sticker price on a caravan may seem daunting, caravan finance options in Australia are widely available to help afford these purchases.
Becoming an educated consumer can help you navigate tricky caravan finance deals. Our goal is to connect you with the best caravan loans in Australia so that you can have the caravan of your dreams at a great price.