We’ve now seen the RBA Board increase the cash rate for four months consecutively. In its August statement and in those prior, the Board strongly indicates that further rises will be in order to return inflation to the range of target settings. For those planning the purchase of a new RV with caravan finance, questions will likely arise around what changes to current and new loans will these rate rises impact. Doubt may also exist around how if at all, cheaper rates can still be achieved on caravan loans.
The latest 0.5% rate rise announced in August has hiked the cash rate to 1.85% over the past four months. A significant increase from the historic 0.1% low that was enjoyed by loan seekers for quite a long time in 2020 and 2021. Further rate rises have been indicated by the RBA which will be guided by data around employment and the inflation figures which were recently reported at exceptional levels.
Changes in caravan finance interest rates will result from RBA rate rises but buyers may source better interest rate caravan loans through Jade Caravan Finance. We outline what changes may occur to caravan loans as a result of these cash rate decisions, what aspects of caravan finance will remain unchanged and how cheaper rates may still be achieved.
Unchanged Caravan Finance Aspects
The general structure of the most popular caravan loan, the Secured Caravan Loan remains unchanged as a result of rate changes. The features and conditions of the loan will not alter.
The same application form and assessment process will be undertaken when quoting and approving loan applications.
However, it is worth noting that there are differences in the types of loans for caravan purchases available through different lenders. Not all will offer a specifically named ‘caravan loan’ but will include RV finance under a more generic ‘personal secured loan’ category.
These differences can include the type of interest rate that applies to that loan and that is a factor that should be looked into. While we offer a fixed interest rate, some lenders will offer a variable interest rate caravan loan. This is significant in the light of rate rises as variable rate loans are subject to change with rate changes.
Reviewing the different types of loans from some lenders highlights this point.
Another unchanged aspect will be to existing caravan finance that has a fixed interest rate. A fixed interest rate consumer loan typically has that rate fixed for the entire period of the loan. When the RBA moves on rates, existing fixed-rate loans should not be impacted.
Many caravan buyers have been applying for pre-approved caravan finance. These have been extremely popular in the recent short-supply situation. Pre-approved loans are also extremely useful when planning to order at a caravan show. Having the finances approved and confirmed prior to inspecting the vans can clarify budgets and narrow down the wish list. It can also enable buyers to act quickly to place orders when supply is limited.
Those with existing pre-approved loans with firm quotes should not typically see any changes to the offer IF the loan is acted on prior to the expiration time. If however the loan is not processed before expiry, changes to the rate and quote may occur. After a pre-approved loan offer expires, it would be re-quoted if required at a later stage.
Changed Caravan Finance Aspects
The major change to caravan loans as a result of RBA rate rises will be to the interest rates. The lending market in general reacts to these RBA decisions by adjusting their rates according to their individual requirements.
Interest rates on caravan loans do vary across the lender market. This is due to a range of reasons including the lender’s exposure to the market, interest in financing the sector, source of funding, costs of operations and general operational directives.
As a result of the current economic conditions where RBA rate rises have been expected, some lenders have increased rates prior to the monthly RBA Board announcements. The amount that a lender will increase their caravan loan rates will be an individual decision. Only the rate rise may be passed onto consumers or a larger increase may occur. Some lenders may increase rates to a higher amount in one month to cover off on expected future increases and then hold off making further adjustments.
Whatever the policy of lenders, what is generally universal is that the lowest interest rate on caravan loans that a lender will advertise applies typically for good credit score applicants and for new RVs.
The current changing rate scenario has created a more complex situation. A situation where buyers seeking the lowest interest rate caravan loans may need to do more homework to find that elusive cheapest rate. Alternatively, they can save time and hassle and simply use our services.
Owners with existing variable rate loans may see an increase in their rate and their caravan loan repayments as a result of RBA decisions.
Achieving Cheaper Interest Rates
With many banks and lenders in our lending panel, Jade Caravan Finance remains ideally placed to source better caravan loan interest rates for our customers. The greater choice allows us to immediately identify which particular lender is offering the best rate to suit that particular customer’s profile. In addition, our industry knowledge provides us with information on lender rate movements, often prior to new rates being advertised.
As further rate rises are anticipated for September, buyers are encouraged to fast-track purchases with finance wherever possible to capture cheaper rates prior to the next rise.
Contact Jade Caravan Finance on 1300 000 003 to source the cheapest interest rate caravan loan.
DISCLAIMER: THE DETAILS AND INFORMATION IN THIS CONTENT ARE PREPARED AND PRESENTED PURELY FOR INFORMATION AND NOT INTENDED IN ANY WAY AS THE SOLE SOURCE OF FINANCIAL ADVICE FOR CARAVAN PURCHASING. IF ADDITIONAL FINANCIAL ADVICE IS REQUIRED, READERS SHOULD REFER TO A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY ERRORS, PRODUCT DESCRIPTION VARIATIONS, OR OTHER MISREPRESENTATIONS OF INFORMATION AS PRESENTED.
