RV buyers may improve their prospects of securing better caravan loan rates by addressing their credit score, personal balance and the loan amount requested. The interest rate is critical to the cost of RV finance payments, the total cost of the loan and as such, the total purchase. A lower rate means less interest accruing over the term and a lower overall cost to acquire the RV. With the Reserve Bank (RBA) increasing the cash rate on 29 September and another rise possible in November, securing the best possible rate will be a high priority for buyers.
While our brokers work hard to source the best caravan loan rates for our customers, individual credit scores are an extremely important consideration when lenders assess applications. Applicants with good scores are offered the best rates.
If planning to buy a new RV in the near future, possibly for the summer holidays, now could be the time to address any issues with your credit score. We explain how credit scores affect loans and what you may consider actioning.
Caravan Loan Rates – Update
Interest rates on loans for RVs vary across the lending market, with individual lenders setting their rates for their specific credit products. Lenders typically use the official cash rate as a base from which they set their rates.
The RBA increased the cash rate on 29 September to 4.6%, and it can be expected that consumer credit rates will also increase from many lenders. A further rate rise is highly expected at the RBA’s 3 November meeting as inflation also jumped to 4% from 3.5% in August as reported by the ABS.
Your Credit Score and Loan Offers
Personal credit scores are calculated and compiled by Credit Reporting Agencies based on information submitted by credit providers. These providers include banks, finance providers, credit card companies, telcos and utility companies and other organisations which offer services to customers.
Payment histories, loan defaults and other issues negatively impact a score. A good payment history and other positive information positively impact scores. The specific score depends on the individual rating system used by the agency. On the 0-1000 system, a very good score would be 700+. On the 0-1200 system, 800+ is considered very good. An excellent score is in the top 20% of scores.
When assessing loan applications, lenders access credit scores from the Credit Reporting Agencies. The information is assessed alongside the financials. The score represents creditworthiness to lenders, that is, how reliable the applicant is to repay finance.
The assessment made by lenders affects many aspects of any loan offer made. Primarily it can affect the interest rate offered. Rates essentially represent the risk of lending to an individual. Buyers may note that lenders advertise their best rates to applicants with a good credit score. A less than good score essentially means a lower rate offer.
The score may also impact how much a lender is prepared to approve extending to you. That can then affect how much is required for a deposit or which RV can be purchased. Applicants with good scores may be approved for a higher percentage of the purchase price than those with poor and low scores.
Do you know your credit score? If it is less than good, what can be done to improve it?
Many people don’t know their score or what appears on their Credit Report. A copy of a Credit Report can be sourced through Agencies – refer to the directions at Moneysmart.
Look for any errors such as wrong entries etc, and work to have them fixed. Credit scores may be improved by improving the personal balance sheet. That can involve paying off other loans, reducing spending and reducing the limit on credit cards.
If you do have a less than good score and any of these actions are possible, the results may be significant when applying for a caravan loan.
Securing Best Caravan Loan Rates
Using a specialist RV broker such as Jade can assist buyers in sourcing their best possible caravan finance rate. We have connections with many lenders and quickly find buyers the lender that is the best match with their profile. We use our leverage with lenders to negotiate the best possible rate and most suitable loan terms and repayments. Review our latest caravan loan rates on Secured Caravan Loans to see how competitive we are in the market. Use our current rates on the Caravan Finance Calculator to obtain quick loan estimates to start planning your purchase.
To have greater clarity around your rate prospects, submit your loan application for pre-purchase assessment and a quote.
For highly competitive caravan loan rates and advice on improving your credit score, contact Jade Caravan Finance on 1300 000 003 or connect online.
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.
