If you’re in the market for a caravan, motorhome or camper trailer, chances are you’ll need a loan to finance it. As with all kinds of finance, your chances of getting a good deal depend on one thing – risk. Are you a low risk? Will you be a good, responsible borrower? With that in mind, here are our tips for getting the best deal on leisure finance.
1. Figure out your finances first
If you’re need a loan, lenders and brokers will want to know the health of your finances. Paying off existing debts or saving goes a long way to gaining approval. This shows that your financial situation is stable. It shows lenders you have disposable income to spend on a caravan, motorhome or RV plus any extras that you have in mind such as mod cons (kitchens, power supplies, equipment racks.) Also you should take your residential history and employment status into consideration. Stable employment and residences indicate lower risks. Retirees with high asset holdings and other sources of income are good prospects for loans, too.
2. Set a budget – and stick to it
A lender may look at you unfavourably if you’re buying beyond your comfort zone. If you don’t budget well, lenders might think you’re an irresponsible borrower. Leisure finance sometimes requires a bit more outlay than the price on the front too, so keep that in mind. Use of a caravan loan calculator to help finding what exactly you can afford is a great example.
3. Compare but don’t apply
We always say – get Savvy and do your homework! Get as much information as you can, but don’t apply for leisure finance. What we mean by application is getting a credit check. These show up on your credit history and can often cause trouble if you’re rejected. When making enquiries to lenders or brokers, say you don’t want them to check your credit history until you’re certain you’ve made the right choice.
Tip : Your credit history is sometimes what lenders base decision on. Sometimes, credit histories often contain mistakes. It’s your responsibility to fix them.
4. Newer is better
Do you think you are saving money buying used? Think again. New or recently used leisure or recreational vehicles are good for lenders because they are lower risks. This is because they have more value and are better securities (collateral) for lenders. Used vehicles have less resale value and are harder to find loans for.
5. Talk to a financial professional
Just like your health, it’s always worth talking to a financial professional to get all your questions answered. They’ll help you through all the options such as 100% finance, balloon payments, fees and charges and anything related to leisure finance. They’re friendly and they’re here to help!