If you’ve never purchased a caravan – or anything for that matter – on financing before, the whole process can seem quite technical and complicated. Finding a good lender is essential, otherwise you might find yourself spending a lot more than you bargained for. It’s important to also remember that there is more than one type of loan available; without the proper information, you could find that you’ve signed up for the wrong one.
Here are the Jones’ top 5 tips for financing your new caravan
- Get an idea of your current finances
Before you even start looking at caravans, it’s important that you get an idea of your current finances. If you work full-time, start collecting payslips and bank statements to give lenders an idea of your ability to pay back the loan. If you’re retired, you might have high asset value (which lenders often look upon favourably). Once you’ve got all your paperwork in order, it’s time to think about a budget.
- Set a realistic budget
Look at it this way – lenders aren’t going to hand out bundles of cash to people who are going to struggle to pay it back. Based on all of the facts, how much can you afford to pay back each month (or fortnight or week, depending on the conditions of your policy)? Ensure that you’ve taken into account all of your other bills and expenses (such as groceries). It’s also a good idea to set aside some money for emergencies.
- Look for a new caravan
If you plan on financing a new caravan, it should be noted that lenders rarely want to finance older vans. They have a low value and a much higher risk. Lenders hate risk, so always try to look for a newer model if possible. On top of this, newer vans will have better security features (inside and out) and will be equipped with the latest technology, so will be better for you in the long run.
- Refuse any credit checks
It’s perfectly fine to ask for a lot of quotes as a part of your research. In fact, you should find out about as many caravan finance products as possible from a variety of different lenders. If a lender says that they want to do a credit check, don’t give them the go ahead until you’re 100% sure that you want to go with them. This is because having a lot of credit checks on your credit history can look bad.
- Use a broker
Although there are a lot of individual banks and lenders out there, it can make a lot of sense to use a broker. They have connections with many different lenders and know the market much better than someone with little to no experience. A broker will also have a team of finance professionals who can help you to find a good deal. Some will also be able to offer good terms on insurance.
If you’re new to financing a new caravan here in Australia, we hope that the tips provided above have given you a good starting point. Work with your local experts or speak with the company who’s vans you are interested in – they may be able to help you to find the right solution for all types of lending needs, from secured and unsecured loans through to balloon repayment loans and even bad credit loan options.