Australia is a place to enjoy road trips with beautiful landscapes and a lot of holiday spots. Caravans holidays are a significant reason people need caravans. They are comfortable for travelling with friends and family and cheaper when you consider the cost of a resort or hotels.
Do you need to get a caravan to have that fun holiday but you cannot afford it without a loan? You will find what you need to obtain the loan to finance you caravan dreams here.
The types of caravans you can purchase include:
- The convention/classic caravans
- 5th Wheelers
- Camper and teardrop trailers
- Motorhomes and recreational vehicles (RVs)
Available Finance Options
There are various caravan loan options available for you. They include:
Unsecured Caravan Loans
This application process of this type of caravan loan is a simple and straightforward agreement between a financing institution and the borrower. It’s an excellent way to fund your way to a new caravan, RV or campervan without having to use the caravan or another asset as security.
Precisely, it’s an unsecured form of caravan loan. Unsecured caravan loans offer more flexibility but at a higher interest rate because the lender is taking a big risk. You can spread the repayment over 12 to 84 months (1 to 7 years), and there is an early option for payout.
Secured Caravan Loans
Secured caravan loans or consumer caravan loan requires the use of the caravan or another asset as collateral. The advantage of a secured or personal loan is that the interest rate is lower than that of an unsecured personal loan for a caravan. However, you can lose the caravan if you default in the loan repayment.
It’s the most conventional way Australians purchase new caravans. It’s recommended for borrowers who want to obtain their caravan quickly as it has a fixed interest rate, and borrowers can quickly know how much they are to pay.
Choosing the Right Lending Company
It’s vital to choose the right lender for your caravan loan. To ensure you can do this, here are the following guidelines put in place by the Australian Securities and Investment Commission (ASIC).
- Your Lender Must Be Licensed: It’s one of ASIC’s guidelines that before a lender gives out money, it must have a license. So, before you make a pick, ensure that the actual lender has a license. To know this, you can check up your prospective lender in the list of ASIC’s licensed lenders in the ASIC’s Connect Professional Register.
- Your Lender Must Provide You with The Credit Guide: As a licensed lender, it must provide you with the credit guide and credit proposal disclosure document, so you can read and make informed choices.
- Your Lender Must Give You A Quote for Providing Credit Assistance: Unless you have agreed on the maximum amount, you will pay for your lender’s services.
Improving Your Credit Profile
If you’re looking to improve your credit profile, here are few tips as provided by ASIC.
Examine Your Credit Report and Score
Ensure there is no error or irregularity in your credit report before you apply for a loan. If you discover any error or inconsistency that could negatively affect your credit score, you can hire a credit reporter to fix it for you.
Discharge All or Some of Your Debt Obligations
Securing equipment finance is pretty much about the history of your past credit loans. Pay your bills on time, resist accruing debts and ensure your existing loan obligations are on track.
Make A Comprehensive Budget
You don’t want to take more than you can payback. If you do, it will affect your next loan application. So, make a detailed budget about your expenses and income for the time being.
Barriers to Enquires About Your Credit Profile
This is important if your lender decides to consider your credit report, you don’t want to make it difficult for them, do you? So, watch out for any barrier.
How to Apply for A Caravan Loan
Applying for a caravan loan is quite straightforward. You can compare the interest rate of available caravan loans from various lenders such as Jade Caravan Finance and choose the option that works best for you. You can complete the application form from the website of the lender and wait for the caravan loan approval.
You should be 18 years of age or above for eligibility for a caravan loan. You also need to have a good credit rating as proven by your bank statement of accounts, payslips or other credit contracts. Note that some lenders provide loans for only those who are resident in Australia or citizens.
Things to Do When Applying for A Caravan Loan
Here are some pitfalls to avoid during your loan application process.
- Do not request for a high amount of money or more than you can pay back
- Take time to read through the loan terms before putting your pen to paper
DISCLAIMER: The data provided above is merely a GENERAL MATERIAL for your use and consideration. They do not, and should not in any way, be considered as financial advice or recommendation from CSHTA. Hence, we shall and do not take liability for faults or mistakes in the presentation or interpretation of the facts highlighted herein. Also, we do not accept responsibility for any analysis and commentary on data present within the public domain. We advise you to consult with an accountant or financial advisor if you need specific recommendations concerning your financial needs or circumstances.