Hitching up the caravan and heading off into Australia's great outdoors should be a completely enjoyable experience. But if you get 'stitched-up' with a caravan loan that doesn't really suit your requirements, is priced at a higher interest rate than is achievable from other sources or has been a totally stressed-out, time-consuming hassle of an experience to arrange - your 'enjoyment' may be as great as it should be.
At Jade Caravan Finance, we’re specialists in recreational and leisure finance and we’re sharing some of the key things that people sourcing a caravan loan should know. From the range of lender options available, to how to suss out when an offer is too good to be true to how to achieve the lowest interest rate on your caravan loan.
Know Your Lender Options
When seeking a caravan loan, buyers have a range of lenders available to them. Knowing the advantages and disadvantages of each source should assist you in deciding which way to go.
- Banks: The banks are usually easily accessible and with most people operating transaction accounts and credit cards, the bank is the popular first choice for most consumer finance. But not all banks offer specialist ‘leisure’ loan categories such as caravans and may offer a more general personal loan. This type of loan may be priced at a higher rate than a specialist caravan lender will offer.
Banks have strict loan guidelines which they are not usually in a position to vary. So if you want to talk loan deals, the bank may not be the place to start a conversation.
- Direct to finance companies: There is a plethora of non-bank finance companies currently advertising all types of loan offers for consumer finance. Non-bank lenders can be easier to negotiate with than the banks, but they are professionals and trying to negotiate with a professional negotiator may be a tricky exercise in getting what you want. As a business they’re in it to make profits. So watch the fees and charges element of the loan offer.
- Manufacturer and dealer finance: Many caravan dealers and manufacturers now offer a finance option and present as a source to both order your van and get your loan at the same place and same time. These are usually arrangements with a separate finance company and there may be commissions or other rebates involved which may increase the loan price.
- Finance broker: Using the services of a finance broker such as Jade Caravan Finance allows you to easily cover off on many lender options simply and easily. Jade is accredited with both banks and non-bank lenders so we can source you the cheapest quote from what is currently available across the market. We have contacts with specialists in the leisure/caravan finance sector.
When it comes to taking on the tough non-bank lender negotiators, Jade has that covered for you too. Our consultants are highly skilled in that area and with the large amount of business we do in the caravan sector, we have the bargaining power to back us up when negotiating a cheaper interest rate for you.
Know Your Loan
The most popular loan for the purchase of caravans, camper trailers, motorhomes and other RVs is the Secured Caravan Loan. This loan type has a standard format which should be universal across all lenders.
- The caravan is used as security against the amount being borrowed.
- The interest rate is usually at a fixed rate.
- The loan term is fixed and usually represented in months such as 48-60 months/4-5 years.
- The repayments are in equal monthly instalments and due on a set date each month.
This type of consumer finance loan is regulated under ASIC rulings and all Approved Credit Licensees, must abide by these rulings when arranging and offering personal caravan loans to their customers.
- Individual lenders will have their own requirements in regard to individual applicants.
- Some may request that a larger deposit be paid and/or have other requirements in regard to minimum/maximum loan amounts and loan terms.
- With used caravans, the age and condition of the vehicle will be taken into account by the lender.
While the loan format is standard, the actual value of the interest rate and the length of the loan term can usually be negotiated with the right lender to achieve the repayment level that is desired. Working on your behalf and in your best interests, your Jade broker will negotiate the elements of your loan to achieve the best outcome possible.
Know when it’s Too Good to Be True
There are a number of loan promotions and special offers that you should be aware of and consider in great detail before accepting on face value.
- 0% Interest Rate Loans: Really???? Clearly there has to be a catch with this type of offer. Interest rates may be at historically low levels but consumer finance is certainly not that low. On further investigation you may find that this is a promotional offer. The zero rate is for say the first 6 months of the loan term after which a much higher rate kicks in. Alternatively, this type of offer may conceal much higher fees and charges built into the loan. Always compare the total loan amount and ask for an itemised quote which details the charges. Under ASIC rulings, lenders are required to reveal the fees and charges on loans.
- No deposit finance: This is very popular in finance company advertising and to a great extent, it’s quite irrelevant. The lender will not necessarily request a ‘deposit’ from the borrower. The seller may request a deposit from their buyer to secure the sale. If a borrower is wanting to borrow 100% of the purchase price of the caravan, some lenders may request that the borrower pays a deposit to reduce the total loan amount. This would be based on the lender’s assessment of the overall loan application. This is the type of aspect that your Jade consultant can negotiate on your behalf.
Know Your Broker
Having Jade Caravan Finance as your finance broker can deliver significant benefits to your loan search. You will be assigned your own broker so you’ll have a single point of contact throughout the process to easily stay across what’s happening.
To know more about sourcing a cheap caravan loan, contact Jade Caravan Finance at 1300 000 003 to discuss a loan
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