This is not the first time we’ve ‘been here’ this year. In fact, it’s now more than 8 times. The number of times the Reserve Bank of Australia Board has lifted interest rates this year. Decisions which can potentially flow through to the caravan finance market. Decisions which can have buyers searching for the cheapest caravan finance.
But interest rates are not the only reason that buyers may be seeking cheaper finance. As pandemic restrictions which had held up manufacturing are now lifted and hopefully supply chains for components also eased, buyers may find it easier to buy a caravan with usual delivery times. That’s opposed to up to a 12 month wait.
But with the rise in inflation and costs both here and overseas, buyers may find the price of the new caravan they had their eye on is now higher. Or maybe there is a change in travel plans and a more luxuriously appointed model, a larger caravan or an RV with greater off-road capabilities is now required. A model with a higher price tag which could mean a higher finance amount is required to make the purchase.
Whatever the reason, securing the cheapest caravan finance can be key to affordability of the preferred RV so buyers can balance the effects of inflation and interest rate rises. A number of times this year we have covered off on the various approaches caravan buyers can take to achieve a cheaper caravan loan and/or reduce the monthly finance repayments. But with the latest RBA rate rise and the note from the Governor that further rises are to be expected, it is timely to revisit and remind buyers of those tips and hints and how we can assist.
RV Finance Products
While caravanning is extremely popular in Australia, specific loans for purchasing RVs may not be so easy to identify. Yes, there are many banks and lenders that will offer loans to finance new caravans. But they may be included in a general recreational or leisure products loan category. Possibly a generic Personal Secured Loan. This may be designed to suit a wide range of products including boats, caravans and other goods.
A number of manufacturers and caravan dealers also offer finance to buyers. But these will usually be through a third party – a finance company. As such, buyers should look closely into these offers to ensure they are not over-paying fees and other charges. And of course, to ensure that the rate offered is the cheapest they could achieve.
As a specialist in caravan finance, we do offer a specific Secured Caravan Loan with cheaper rates.
The format of any secured loan is fairly standard. The lender accepts the new caravan or other RV as the security for the finance. But across the lending market, the type of interest rate offered and other loan conditions such as maximum loan amounts and finance terms can differ.
We offer a fixed interest rate but some lenders may offer a variable interest rate. This difference can be key to the cheapest caravan finance over the full term of the loan. A variable interest rate loan can be subject to fluctuations in rates as per RBA decisions. Buyers that opt for a variable rate caravan loan may find their rate and their repayments increase at some point during the loan term.
Tip – ensure your loan has a fixed interest rate and that the finance conditions suit your requirements. As a broker-style lender, we source and negotiate every caravan loan on an individual basis.
Caravan finance is consumer finance and all lenders that offer these types of loans must abide by the Responsible Lending Guidelines as set by ASIC. Lenders must be licensed and must not make a loan offer to an applicant which is deemed inappropriate for that individual. Always ensure you are accepting a finance offer from a licensed lender.
Getting the Cheapest Interest Rate Finance
Sourcing the cheapest caravan finance may mean the lowest monthly payments or the lowest cost overall for the loan. That is the cost of the total interest, fees and the loan amount. These elements all add up to the total cost of the caravan.
The interest rate is at the centre of achieving the cheapest caravan finance. The rate, along with the term and of course the amount borrowed, determine the repayments and the overall total. As can clearly be seen in our caravan loan comparison table, the interest rates advertised on caravan finance do vary across the lending market. Note how those rate variations affect the monthly estimated repayments. Significant isn’t it and it highlights how important it can be to secure the cheapest interest rate to ensure the cheapest caravan finance.
The interest rates on caravan finance set by lenders will be determined by their own decision-making procedures. Hence the variations. The rates advertised by lenders for all types of finance generally refer to their lowest achievable rate for new caravans and RVs for finance applicants that have a good credit profile or credit score.
That can be a critical point to note for those seeking the cheapest caravan finance. Ensure your credit score is in the good band by requesting a copy of your credit report and checking there are no errors which may prevent you from being offered the best interest rate and loan conditions. Directions around fixing credit report issues are available at Moneysmart.
When assessing caravan finance applications, lenders will also be looking at creditworthiness and the ability to repay the finance. Ensuring the personal ‘balance sheet’ – what is owed compared to what is owned, is in good shape can contribute to being offered a better rate and more amenable loan conditions.
Getting the Lowest Caravan Finance Repayments
While the interest rate is central to the overall cost of the finance and will determine the repayments, there is another angle to consider in terms of the definition of cheapest. That is achieving the lowest possible monthly payment. That is often the figure that most buyers can relate to more easily. The amount they will need to pay each month.
Tip – when you see ads from caravan sellers with a price per month amount, delve deeper before committing. As mentioned above, the repayments are calculated based on the interest rate and the finance term. A longer finance term reduces the monthly commitment while a shorter term increases the monthly payment but reduces the total interest on the finance.
An advertisement for a lower monthly finance payment may actually simply be calculated over a longer term. The buyer may pay less each month but more overall.
Securing lower monthly repayments however, can be a way to afford a caravan with a higher price tag. But there are other considerations. These include paying a larger deposit to reduce the amount required for the loan and ensuring that the lender will approve a longer finance term.
We assist buyers to achieve that target repayment amount as best as possible and achieve the cheapest caravan finance through better interest rates and personally negotiating every application. Achieving the cheapest caravan finance can be critical to being able to proceed with that dream caravan purchase and may be possible in a streamlined manner with our professional expertise to assist.
For the cheapest rate caravan finance, contact Jade Caravan Finance 1300 000 003
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.