If you are thinking about buying a caravan then one of the first things you should consider is how to finance that purchase. The main reason for this is that it can often take several months or years to save up enough money to pay for a caravan in cash.
Caravan loan basics
Of course, if your budget for your new van is fairly modest then many people would recommend that you buy a used caravan rather than paying more for something brand new. Caravans are sometimes viewed as being like cars in this regard, but there is of course a certain amount of wear involved with them which you generally won’t find on brand-new models.
However, whether you choose to go for a new or used caravan, you are likely to need finance in order to make the purchase. This is where a good broker can offer valuable assistance because they will be able to find caravans for sale that suit your budget, and help you get financing too.
Caravan loans explained
There is actually no reason why you shouldn’t borrow to buy a caravan outright. Borrowing to finance 100% of the purchase price is possible, but you will need to have good credit if this is something that you are interested in doing. There are many lenders who specialise in offering finance for caravans so it is worth checking around until you find one that suits your needs.
There is also the option of borrowing a smaller amount in order to pay for a caravan on a monthly basis. This may be a better option if you need a little more flexibility because you will not have to pay back the full loan until your caravan is no longer in use or has been sold
Interest rates
As caravans are generally pretty expensive purchases you can expect to have to pay a high-interest rate on any finance that you take out. For example, the rates of 24.9% APR are not unheard of so it is important to shop around in order to get the best deal possible.
Of course, an alternative could be to save up for your caravan by putting money into a savings account each month. If you do this then you will be able to pay for your new caravan in cash and use the interest from your savings for other things such as holidays or even buying a car.
To compare all of your loan options in one place, without affecting your credit score, you can get a Driva caravan loan.
Caravan loans with no deposit
Many people simply cannot afford to put down a deposit on their caravan so they have no choice but to borrow the money. If you are in this situation then there is good news because many lenders offer loans for caravans with no deposit. Of course, if your credit rating is not perfect then you may have to put down a small deposit in order to qualify for finance
