One of the biggest disappointments for a lot of people in this coronavirus environment is the halt to their caravan holiday and touring plans. With the caravan essentially hibernating in the driveway, backyard or storage unit and many household budgets feeling the pinch, refinance caravan loan might be an option.
Apart from easing budget and cash flow pressures, another major reason for people seeking to refinance a range of loans is the current historic low levels of interest rates.
How does refinancing work?
Refinancing involves establishing a new caravan loan for the balance on your existing loan.
You are paying out the existing loan and taking out a new loan on the balance.
Your Jade Caravan Finance consultant approaches the process in a similar way as setting up new caravan loans: using our wide range of banks and lenders to source you the best loan offer with the cheapest caravan loan interest rates.
What can you achieve with refinancing?
If you existing caravan loan is based on a fixed interest rate which is considerably higher than current rates you may:
- Reduce your fixed repayments while retaining the same loan term, ie number of years remaining on your loan.
- Maintain the same repayment level but shorten the loan term, ie payoff the loan earlier.
- If you are in a better financial position than you were when you set up your existing loan a new lender may impose less restrictive conditions to your refinanced loan by way of offering a better interest rate or terms.
What costs are involved?
- The usual expenses associated with establishing a caravan loan will usually apply.
- You should consider any fees and charges which may be applied by individual lenders. Your Jade consultant can provide you with a total cost of your loan so you can compare with your existing loan to make an informed decision.
- Break fees apply to most loans when the loan is paid out early, which essentially is what you are doing when refinancing. Your Jade consultant will work to minimising these costs for you.
What should I consider?
There are a number of issues to consider in regard to refinancing your caravan loan:
- The historic low levels of interest rates. Where your existing loan is at a higher rate than the current rate this may be a strong motivator. But this must be balanced with any costs involved as mentioned above.
- Your payment history: if you have or have not been repaying your loan on time and as such how lenders will view your payment record.
- Your income pre, during and post the coronavirus crisis. If your income has been reduced and you are currently on JobSeeker or JobKeeper and your prospects of returning to your full/usual income levels in what timeframe will be considered by lenders.
- Your hardship status will be considered. If you have applied for a 6 month deferral of repayments on your caravan or any other loan, this may be taken as an indication of hardship by some lenders. While we have been informed that deferrals due to coronavirus impacts will not negatively impact credit records and scores, it may be considered by lenders.
- The value of your caravan. Depending on how long you have had the van and if it was new or used when purchased will affect its current value and that will influence lenders.
What should I do if I want to refinance?
If you have considered all the points we have mentioned and would like to proceed with refinancing your caravan:
- Head to our Caravan Finance Calculator and use the interest rates we are advertising today to calculate a rough repayment estimate on a loan for the balance on your account.
- You may call your lender and ask for a payout figure on your existing loan so you know what the amount of your new loan will be.
- If you feel you need expert advice, contact your financial advisor for a full appraisal of your overall financial position.
- Contact Jade Caravan Finance and get the process started.
As with all our loans, we will provide you with a quote on your refinanced loan and there is no obligation to accept that offer or proceed further if you consider that the outcome will not benefit your overall financial situation.
If you would like to discuss refinancing your caravan loan, please contact a Jade consultant for a confidential conversation. Call 1300 000 003
