How to have full ownership of your under-finance caravan sooner.
When you don’t have or you choose not to use your cash to purchase a caravan outright, taking out a caravan loan is a convenient and very popular way to go. The current low interest rate scenario is also a big attraction for buyers to purchase large ticket items with finance. When taking out caravan finance we discuss with our customers the term they would prefer to repay the loan and negotiate with lenders to achieve the preferred timeframe.
Some customers are keen to seek the maximum loan term possible as that can mean the lowest monthly repayments. But it also means that it will take a longer timeframe to take full ownership of their RV.
Other customers are seeking to own their caravan outright as soon as possible. Their motivation may include:-
- Wanting to reduce their debt levels and increase their assets to be in a better position to take on other financial commitments.
- Personal preferences such as their own financial objectives and goals.
- Intending to upgrade to a better RV in a few years and have their current caravan fully paid off at that time rather than having to sell or trade-in a RV under finance.
- To work with any possible changes in their personal financial situation in the years ahead.
To achieve the objective of owning your caravan sooner rather than later, our customers can consider a number of aspects during the actual loan application process and at different stages of the loan term. We provide details on a number of strategies that may be implemented to own a financed caravan sooner that you may like to consider.
Considerations Prior to Making a Loan Application
When approaching the process of applying for caravan finance, buyers should have a clear idea of their own personal financial objectives and consider the loan options that will meet those objectives. One of the initial considerations can be selecting the most appropriate type of caravan loan. Specifically whether a Secured Caravan Loan or Unsecured Personal Loan is best suited.
Secured loans are by far the most widely used loan type for many purposes and they do attract a lower interest rate than an unsecured loan. But break fees usually apply when a secured loan is paid out prior to the end of the loan term. These fees may also apply to unsecured loans but may be sourced so as not to apply. If a buyer is considering paying out the loan early, selecting a loan type with the lowest or no break fees may be the way to go.
Key to repaying any loan faster is securing lower repayments and that often starts with securing the cheapest interest rate loan. In order to secure the cheapest loan, applicants should have a good credit rating and profile. Lenders will assess an applicant’s credit profile when making a loan offer. Applicants can ensure their profile is as good as possible by attending to any errors or issues by checking their credit report before submitting a loan application.
A good credit profile can mean achieving a better interest rate which in turn can mean lower repayments and owning your caravan earlier.
Another consideration is deciding between a new or a used caravan. Across the lending sector, used goods can attract higher interest rate loans than new goods. Assessing the overall costs of both types of loans in discussion with one of our consultants may assist your decision in this regard.
Structuring Your Caravan Loan
A key element of your caravan loan is structuring the finance to meet your objectives and our consultants will discuss the options with you before proceeding to source and negotiate your loan. If owning the caravan sooner rather than later is your preference, then requesting a shorter rather than longer finance term can be considered.
The finance term, the total amount of the loan and of course the interest rate will determine the repayments. A shorter finance term will result in higher repayments compared with a longer finance term but the loan will be repaid sooner. To see how this may affect your particular caravan purchase, please use our Caravan Finance Calculator.
Buyers can also consider actually reducing the amount of the finance required by paying a deposit. A lower loan amount can be combined with a shorter term and hence the caravan is owned earlier.
Making Changes to the Contract
Making structural changes to a finance contract during the term of the loan can be complicated and significant changes could mean refinancing. However, to own your caravan sooner, borrowers can also consider making extra payments in addition to the scheduled monthly repayments.
This is permitted under our caravan loan types. Customers can contact the lender to advise their decision and make the extra payments either now and then or as a regular process. This will mean the total loan is paid out earlier than the loan term and the total interest payable may be reduced. However, break fees will apply to some caravan loans when this occurs. These fees are considered ‘minimal’. Speak with one of our consultants about how break fees are calculated or refer to the articles in our library for more information.
Whatever your personal financial objectives in regard to your caravan loan and your ownership timeframe, your Jade Caravan Finance consultant will work with you to structure your loan to suit your goals.
Call 1300 000 003 to discuss structuring a loan to suit your goals with a Jade Caravan Finance consultant
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.
