FAQ

Secured Loans are arranged at a fixed interest rate. This means the rate that we achieve for you will remain the same, remain fixed, for the full term of the loan. It will not change in response to fluctuations in the official interest rate as set by the RBA. Unsecured Personal Loans, which are available when the caravan is not accepted as security against the loan, can be at a fixed or a variable interest rate. This will be discussed with you at the time you arrange your loan and dependent on issues around your application. With a fixed interest rate loan, you have certainty that your repayments will remain the same at the fixed amount which is arranged when the loan is secured.

The interest rates offered by individual banks and lenders for caravan finance will be determined by their exposure to the sector, the cost of securing their own funds and general economic conditions. Lenders that are more active in the leisure lending market may tend to offer more attractive interest rates than lenders that are less interested in lending for this purpose. From the base industry rate, loan applications are assessed for risk and other factors and a specific interest rate is offered based on that assessment. The interest rate you will be offered for your caravan loan may be in line with an advertised rate or higher. The comparison interest rate is the interest rate calculated when all fees and charges are accounted for and the advertised comparison rate is based on a specific example. You will see in the fine print the details of that specific example. When comparing interest rates from different lenders for consumer finance you should check the comparison rate.

0% interest rates are usually offered by sellers as an advertising element to attract buyers. This type of loan offer often only includes the 0% rate for a short period and when that time expires, a much higher rate is applicable. 0% interest rate loans often conceal much higher lender fees and charges which allow the lender to recoup the loss on interest that would normally be charged. When considering a 0% interest rate loan, buyers should ask for the comparison interest rate or request a total loan amount quote. A total amount should show the total cost of the loan which includes all the interest and charges over the full term of the loan.

Each caravan loan application is addressed individually and loan offers are sourced and negotiated with lenders on an individual basis. The rate achieved for you will be based on your application. Lenders assign interest rates based on an assessment of the credit profile which includes the ability to repay the loan. To achieve a cheaper rate, applicants can look to improve their credit profile by fixing any issues in their credit report. They may also look to address issues around reducing other debts and other factors which may result in a better interest rate being achieved. The age of the caravan may also be a contributing factor. The older the goods sometimes reflect the higher the interest rate.

No. The rate applicable to lending is set when the lender assesses the application. Secured loans typically have a fixed rate and unsecured lending can be fixed or variable. Unlike some types, the fixed rate in this category remains in place and constant over the entire fixed loan term. If a borrower chooses to make extra payments in addition to the required monthly repayments, the term will be reduced and the total amount of interest will be reduced by the rate remains the same. Making extra payments results in owning the goods earlier and reducing the term but attracts break fees with some loan types.

In principle, the term of a loan should not impact the rate offered by a lender to an individual applicant. The rate is determined by consideration of a range of factors including the credit profile and financial situation of the applicant, the goods and the lender’s preparedness to extend finance in that market. Terms for this category range from 1 through to 7 years at advertised rates across the lending market. However, the comparison rate will be different for different terms as the fixed fees and charges would be spread over a different time frame and this would impact the comparison rate. The advertised rate would be the same across the terms but the comparison rate may vary.

No. Pre-approved loans are arranged in advance of a buyer making a commitment to purchase goods. These lendings are available across all goods in this leisure market category and attract the same rates, terms and conditions that are arranged after the purchase has been committed to. This is consistent across all lending types including secured and unsecured personal loans and the full range of business finance facilities. Pre-approved lending can be particularly useful for buyers attending shows and expos where show deals are available. When using a repayment calculator to generate estimates for pre-approved financing, the same rate can be input as for post-purchase loans.

Yes. The credit profile and specifically the credit score of an applicant is a major determinant when a lender assesses an application. A credit score or rating is accrued by credit reporting agencies based on a person’s loan and debt repayment history, credit applications, defaults and other financial dealings. Details on these issues are submitted by credit providers, utility providers and others to the reporting agencies. A bad credit rating would not be expected to attract as low a rate as a good credit profile. In order to achieve the cheapest rate possible, applicants can improve their credit score by taking action to fix any errors or outdated entries.