The maximum repayment term for caravan finance can be up to 84 months but will depend on individual credit products, the lender and the borrower’s profile. The length of time to pay off a RV loan is an important issue for buyers to consider when applying for financing. It effects the amount of interest that accrues on the loan and therefore the total cost of buying the RV.
The term also has a direct impact on the amount required to be paid each month in the repayments with longer terms delivering small payments each month. This may make the purchase of a higher priced, high-end model such as a Bruder an affordable proposition. But is it right for you?
The terms also affect how long it will be before you own the vehicle outright. While this may not seem an important issue at the time of purchase, a few years down the track if you are considering taking on finance for another purpose, the debt may affect your new loan prospects.
Buyers can request their preferred term, and many will think opting for the longest term is the sensible thing to do. Allowing plenty of time to repay the finance and enjoy lower monthly payments. But before making that decision, which will ultimately be up to the lender to approve, take a few minutes to consider all options, the upsides and the downsides.
How is the maximum repayment term for caravan finance decided?
When applying for a RV loan, buyers can make their request for their preferred repayment period to our broker or the lender if applying directly. Will that be approved? The decision as to all aspects of a loan will be with the lender.
Lenders will be considering the amount of the loan, the credit profile and credentials of the applicant and the interest rate on the loan. The credit product will also affect the term offered. Lenders have set loan amounts and terms for some of their products. Some lenders may provide borrowers with a term of 7 years or 84 months on secured loans for RVs while others may limit the repayment period to a lesser term such as 4 years or 48 months.
For smaller loan amounts, lenders may not be as accommodating on approving a long repayment period as they would be for larger loan amounts.
Is the minimum or maximum repayment term for caravan finance the best?
Whether a long or short loan repayment period best suits can be a personal preference. Some buyers will want to own their vehicle unencumbered as soon as possible. This may allow them funds to take on loans for other goods. Other buyers that intend to keep the vehicle for a long time will prefer to extend the payment period for as long as possible.
For buyers that like to update vehicles regularly with trade-ins or private sale, the best repayment term can be that which is in line with the expected ownership cycle.
Apart from the personal preferences, there are financial considerations involved in deciding what is the best term for an individual buyer. Longer terms, say 7 years, will provide lower monthly payments and can make higher priced models affordable. But as interest is charged per annum, a larger amount of total interest will accrue on the loan over that longer term.
Opt for a shorter term of say 4 years for the same loan amount, and monthly repayments will be higher, but total interest will be less. With less total interest, the entire purchase is less than with a longer payment period.
To decide what is your ‘best’, use our Caravan Finance Calculator. While predominantly used to estimate monthly payments, the calculator is extremely useful for determining the most suitable terms.
To compare short and long terms, enter the amount required for the loan, our current interest rate on Secured Caravan Loans, and a term. Our latest best interest rate may not be what you are offered, but it can be used as a guide for estimating, planning and comparison purposes.
Note the monthly payments and the total interest applicable to this combination of values – at this repayment term. Now change the term while leaving the loan amount and interest rate the same. Note how the monthly payment and interest charged has changed by changing the number of years taken to repay the loan. Calculate as many combinations as you want until you arrive at the result that suits your preference and works for your budget.
Brief your Jade broker on your preferred loan structure and we will work hard to negotiate the most suitable outcome for you with our lenders.
Contact Jade Caravan Finance 1300 000 003 for a discussion regarding a minimum or maximum repayment term for caravan finance for you.
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.
