For buyers of all types of caravans the Secured Caravan Loan is by far the most appropriate loan type. It is suitable to the purchase of new traditional and conventional caravans, RVs, motorhomes, camper trailers, off-road models, toy haulers, campervans and other variations. While not every bank or finance company might have a specific Secured Caravan Loan in their portfolio, these purchases are usually catered for under a generic Secured Personal Loan or similarly titled loan.
The ‘secured’ loan is a general and extensively utilised consumer finance loan format which suits the purchase of many goods, especially new goods. But the ‘secured’ reference can create some misunderstandings around what that security actually entails. It could infer to some that it is safe but in what way is it ‘safe’? If this loan is ‘safe’ what other loans are ‘unsafe’?
Anyone applying for a consumer loan should be doing so from a point of being well-informed. Licensed credit providers such as Jade Caravan Finance are required under Australian Consumer finance laws, to issue a range of information to loan applicants. Prior to making a loan application, we provide information on the security meaning of a Secured Caravan Loan to ensure applicants fully understand what is involved in their loan.
Defining ‘Secured’
As with many terms used in the finance lending sector, the use of the word ’secured’ in secured loan is a reference from the lender perspective – that of the bank, finance company or other non-bank lender. It means that the caravan is the security for the loan.
When taking on a secured loan, the loan applicant ‘offers’ the goods being purchased as security or guarantee for the lender. The lender can accept or reject the goods as suitable security. With the purchase of new caravans, in many instances, the caravan will be accepted by the lender as security against the loan.
In some instances for example where the applicant may considered a higher risk or where issues around the loan amount requested exist, additional guarantees by way of other goods or property or assets may be requested.
When purchasing second hand goods, lenders will assess the condition and age of those goods as part of the loan approval process. In cases where the caravan is not seen as acceptable security for a secured loan by a lender, the loan applicant can consider an Unsecured Personal Loan.
With an unsecured loan the goods being purchased with the loan are not the guarantee for the finance. The lender will often request another form of security. If totally unsecured a higher interest rate will apply.
The secured goods in a secured loan are the guarantee for the lender that in the event that the borrower defaults on their caravan loan, they have a back-up so to speak to recover the money outstanding on the debt.
Defaulting on a loan means not meeting the repayments schedule. The way defaults are handled can vary from lender to lender. If a single payment is missed and then made up and possibly a plausible reason provided, the lender may take no action. But a fee may be charged.
If multiple payments are missed the lender will then categorise the caravan loan as in default and commence proceedings to repossess the caravan. This is a particular challenging situation for the borrower and one that should be avoided.
A loan default is reported by the lender to the credit reporting agencies for entry onto the individual’s credit report, causing a downgrading of the credit rating. This poor credit rating can remain for a considerable time period and cause problems for the person when applying for credit and loans in the future.
Caravan Loan Borrower Security
While the secured in a secured caravan loan offers a guarantee for the lender, Jade Caravan Finance builds elements into our loans which can provide at least certainty if not total security for our customers.
Our expert services secure loans for customers that have been specifically sourced and negotiated to meet their requirements. This includes meeting their preferred repayments amount. Ensuring the monthly repayment amount is workable with an individual’s budget is an important step to ensure they don’t default and risk losing their caravan through repossession.
Our fixed interest rates and fixed loan terms also provide our customers with security against increases in lending interest rates during the course of their loan. Once the loan is finalised and settled, the repayments, rate and term remain stable until the finance is paid out.
Caravan owners do need to take actions to ensure security for their caravan. Damage and accidents may be covered under insurance but repayments still have to be met. Ensure you avoid pitfalls by swatting up on advice from experts which is readily available on the net, take lessons in towing and always do pre-travel checks.
The Secured Caravan Loan is a versatile loan product and with our cheap interest rates, presents an affordable way to purchase all types of caravans.
Call 1300 000 003 to discuss a Secured Caravan Loan 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.
