Caravans offer the opportunity for you to travel with comfort, you can travel across a great distance without the total lack of a home, the caravan allows you the option of moving along with your homely design and aura while seeing different places. As good as this sounds, it is worthy to note that caravans are equally expensive and getting one can be a high financial expense.
However, there are different mediums of getting your life on the road with a caravan by exploring the caravan finance option. Caravan finance is about the same as other types of RV, with caravan finance you can get any type of caravan of your dreams either new or old, however, you should be able to afford the monthly repayment for any amount of loan you are going for.
There are diverse financial institution or agency that provide finance for individuals or businesses. The choice of finance to select is based on what type of caravan is to be obtained and what the caravan will be used for. There are majorly two choices for caravan finance.
Obtaining a personal loan for the purchase of a caravan is a popular option for caravan finance. Like most personal loans, you have to go to a financial institution that will agree to give you the loan to purchase a caravan. The loan obtained from the financial institution is used to purchase either a new or old caravan from a car dealer, the amount is usually dependent on the findings done to determine how much your choice of caravan costs. Some financial institutions often have a maximum amount allowed for caravan finance.
There are requirements before one can obtain a personal loan for caravan finance in a financial institution. Some of the requirements expected from an individual before getting a loan include:
- Personal information: You have to disclose your identity with the financial institution, such as a valid means of identification, place of origin and residential address. All of these details are to confirm the legality and eligibility of such an individual to obtain a loan.
- Employment history: You are required to submit your employment history to the financial institution to determine your work history, as well as income history to enable the institution to determine your ability to repay the loan and the interest.
- Credit score: A credit check will also be done to determine if you are qualified to obtain the loan or not, a bad credit score makes obtaining a loan a bit harder, although it is still possible to get the loan if other factors are intact.
After obtaining the loan from the bank, you can easily go to a caravan dealer to purchase a caravan of your choice. The loan obtained from the bank comes with loan terms and a repayment plan which is usually monthly, the interest rate is also calculated.
A loan from a Caravan Dealer
What is often considered as an alternative form of caravan finance asides from a personal loan from a financial institution is by getting a loan deal from a caravan dealer directly. Caravan dealers have been in the business for some time and have established relationships with financial institutions, allowing them to extend a loan to their customers and also get the repayment procedure.
Getting a loan from a caravan dealer is quite much easier as you get both the loan and caravan from the same place, you only need to identify what type of caravan you want to get from the dealer with appropriate documents to qualify you for a loan from the dealer.
Loans from a caravan dealer also come with their repayment options and rate, it is always advised to go for a loan with flexibility and less repayment rate.
Benefits of financing a caravan
Financing a caravan comes with several advantages or benefits, some of the benefits of financing a caravan include:
- Financing a caravan saves your cash for more urgent use, you get to immediately assume ownership of the caravan without making a direct cash payment.
- You build your credit history which allows you to access greater loans in future.
- Easy process of obtaining the loan and also the management of loan repayment.
Buying a new or used caravan
When obtaining caravan finance, this is an important part to consider either to obtain a new or used caravan.
The cost of a new caravan is high, thereby requiring a higher loan extending the period of repayment as well as the interest to be paid on the loan. One easy way of making a reasonable decision is by getting a pre-approval, this gives you an insight into the cost of the caravans and which types you can go for.
Interest rates will also be calculated differently for either a new or used caravan, as well as the loan term that will be given for each. Other factors that determine the loan term asides from the age of the caravan is the amount borrowed and also your financial history. Getting to know the loan terms of different lenders helps in making the best choice.
Most repayment options give room for different flexibility of repaying loan terms. One quick way of estimating the amount to be repaid is through the use of a finance calculator. A finance calculator helps to give a quick repayment estimate.
Many online finance calculators can help in calculating repayment rate, however, a finance calculator only gives an estimate, to get an accurate amount, it is best to speak with your lender.