Caravan loan interest rates are set by lenders individually with many reducing their rates following the May decision by the Reserve Bank to cut the cash rate. Paving the way for buyers of new RVs requiring finance to achieve a lower rate, possibly upgrade to a better van, or to add accessories or extras to their vehicle purchase more affordably.
Lenders are not compelled to change their lending rates following RBA decisions and the cash rate which is set by the RBA is not the rate which applies to consumer credit. The cash rate is now 3.85% and this is an overnight borrowing rate for lenders. Whether a lender follows the RBA with a full 0.25% reduction on their loans will depend on the lender and individual loan products.
It is typical for banks to quite quickly, if not immediately, pass on a full rate cut to their mortgage customers. How a cut is applied to other loan products in their portfolio can vary. Changes may also vary with fixed and variable rate loans and the effect will be different for current loan holders and new loan applicant. To clarify the situation, we explain how the May RBA decision will affect RV finance and how those seeking loans for new caravans can achieve their best rate.
Changes to Caravan Loan Interest Rates – Current Loans
If you have a current loan for your RV, any impact of a decision by the RBA to cut cash rate on your loan will depend on the rate type – variable or fixed. If you used the RV as collateral for the finance and have a secured loan, it is likely that your rate is fixed. We arrange our Secured Caravan Finance with fixed rates as they are lower than variable rates.
Fixed rate finance is not subject to change when lenders change their rates or when the RBA changes the cash rate. Your rate and repayments will remain the same following the May RBA decision.
If the RV was not used as collateral, such as can be the case with some older vans and with share vans, the rate may be fixed or variable. This type of Unsecured Personal Loan can be offered with either a fixed or a variable interest rate. If a fixed rate applies, there will be no change. If a variable rate applies, it is likely you will be advised by your lender of a rate reduction.
The amount that an individual lender reduces their variable rates on unsecured personal loans will be an individual decision. The rate should be reduced which will then reduce the monthly amount of the repayments. Contact your lender if you have not yet received notification from them.
Caravan Loan Interest Rates – New Loans
For RV buyers planning to take on new finance, rates will tend to be lower across the market. Lenders will be seeking to remain competitive in the highly competitive consumer lending market and we should see rate cuts from the majority of our lender base. This should apply to both our variable and our fixed rate loans.
Achieving the best rate on a new RV loan will depend on the vehicle, your individual credit profile and financials, and the lender. New RV finance typically attracts a lower rate than used RV finance. Applicants with good credit profiles and scores are offered the best rates. The amount of the loan relevant to the value or price of the RV will also affect the rate offer.
Our brokers will take care of finding you the most suitable lender and the best rate to suit your profile and application specifics. But there are actions you can take which may deliver you a better rate.
Consider your personal balance sheet – your assets and income compared with your debts and expenses before applying. If you can tip the scales in favour of assets and income by reducing debt through paying out other loans, you may be offered a better rate.
Also look at the deposit you are planning to make on your vehicle. If you can increase that, your loan will be reduced, you may be seen by lenders as a lower risk loan and be offered a better rate and subsequently pay less interest and less for your vehicle. Use our Finance Calculator and our latest best rates as a guide to see the difference in repayments with different loan amounts.
Future Rate Cuts? What the RBA is Saying.
In the May Monetary Policy Statement, RBA Governor Michelle Bullock said the Board would be considering the data with their future decisions. The next decision is due on July 8th. The May 0.25% followed inflation falling to within the Board’s target of 2-3% for the first time since 2021. The Board is focussing on ensuring that the rate of inflation is stable and sustained in this range. Though it does forecast a rise due to global uncertainties.
Global uncertainties dominated the Board’s comments following the May decision, as the US tariffs cause issues around the world. How countries respond and these responses impact domestic and global economic growth will be closely watched by the Board and will be influential in future Monetary Policy decisions.
The Minutes of the May RBA Board meeting will be published for public reading on June 3. This document generally includes the issues discussed and rationale around the decision made, and can provide insights into forecasts.
To achieve your best caravan loan interest rates, use the experts at 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.
"
alt="">