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Caravan and trailer loans
If you have a caravan in your sights but don't have the money, you have various finance options that can help you make your purchase.
Buying a caravan, either for travelling around with family or even during retirement, can be a cost-effective way to see New Zealand. While caravans can be expensive, there is finance available to you. Find out what you need to know about caravan loans in this guide.
How do caravan loans work?
Caravan loans essentially work like any other loan. You have a choice between an unsecured personal loan or secured personal loan that allows you to use your caravan as security, but not all lenders providing vehicle loans allow this. If you opt for a secured loan, you can take advantage of a lower interest rate, but unsecured loans offer more flexibility. Some loans have a fixed interest rate, so your monthly repayments remain the same each month. Other loans have a variable interest rate, which may fluctuate, but the rate tends to be lower.
What to know about types of caravan loans
- Secured personal loan. Use your caravan as a guarantee and benefit from a lower rate. These loans are either referred to as car loans or secured personal loans, but all come with similar features. If a lender allows you to use your caravan as security then you can benefit from a lower rate, but you risk your caravan should you default on the loan.
- Unsecured personal loan. This loan allows for greater flexibility with your loan amount, so you can use it to purchase accessories for your caravan or even insurance. Unsecured personal loan rates are higher because the lender is taking on more of a risk.
- Caravan finance from a specialist lender. Several specialist lenders operate in this space. Remember to check the reputability of these lenders before you apply.
What types of caravans can I purchase?
The road you choose to travel notwithstanding, there’s a caravan out there that can make your trip a pleasure. Find out more about what types are available below.
How should you compare your caravan loan options?
- Find out the interest rate. Interest rates for caravan loans tend to be quite competitive, but it’s still essential to use the interest rate as a comparison point as this is where you can potentially save a lot of money. Decide whether a fixed or variable interest rate is right for you and go from there.
- Will the loan be secured or unsecured? Caravan loans can either be secured or unsecured. Unsecured loans have less risk, but they often have higher fees to compensate for this risk. Choose whether you want a secured or unsecured loan and then compare fees and charges once you make your decision.
- Are you given flexible repayment options? Most caravan loans tend to have flexible loan repayments, but some are better than others. They can offer fortnightly or monthly repayments by direct debit, so choose a loan that provides convenient options.
- See what loan term is on offer. The term lengths of caravan loans vary depending on which financial provider you choose. The amount of money you borrow influences the term length, but it’s also recommended you have an idea of how long it will take you to repay the loan before agreeing to anything.
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What to avoid with a caravan loan
- Watch out for over-committing to a high loan amount. Ensure that you’re not borrowing more than you can afford to pay back before you take out a caravan loan. It’s essential not to get yourself into too much debt. If you are currently in debt, it’s strongly recommended that you don’t take out another loan and instead consider other options first. Continuously borrowing money is a dangerous move.
- Are there any hidden surprises in your contract. Just like with any loan, the lender requires you to commit to a contract. Make sure you carefully read it through before committing to it, so the lender doesn’t hit you with any unexpected charges.
Checklist for buying a camper trailer
The “different strokes for different blokes” is accurate even when it comes to camper trailer shopping, given that just about every camper has unique requirements. Find out what aspects need your attention:
- Chassis. The chassis of a trailer plays a crucial role in holding it together, and for increased life look for a frame made using high-quality materials. If you plan to carry heavy loads or you’re thinking about driving off-road, look for an extra sturdy chassis.
- Suspension. Suspension springs should be strong enough to take the weight of the trailer as well as of the load that it carries. Make sure you pay heed to their condition at the onset and find out if they’re suitable for off-road driving.
- Tailgate and doors. Remember to check all seals, not just on the doors and the tailgate but also on all compartments and even the toolbox to avoid damage from water and rust.
- Towing. The towing coupling should have enough strength to take the camper trailer’s weight as well as all that it carries. For off-road driving, having a coupling that turns 360 degrees is ideal. Also, consider getting snatch points at the trailer’s rear section.
- Protection. Camper trailers tend to flick up stones from time to time, and this can even happen on paved roads. Some trailers work in deflecting these stones by using built-in stone guards, and some come with shade cloth attachments to bridge the gap between the trailer and the car.
- Tyres. If you can get the same set of tyres fitted on your trailer as on your primary vehicle, you can look forward to a smoother drive.
- Trim. The canvas your camper trailer uses should be durable, given that it provides shelter, but remember that lightweight canvas is quicker and simpler to set up. Check for waterproofing and mildew-proofing of all canvas and awnings, and make sure they don’t have any holes.
- Bedding. Ensure there’s enough room for everyone who might use your trailer and don’t hesitate to take measurements of the linen if it looks small.
- Possible add-ons. While the list of add-ons can be substantial, most camper trailers tend to include water tanks, jockey wheels, and awnings, so it makes sense to look for these in your purchase.
How to start your application for a caravan loan
If a caravan loan sounds like it’s right for you, applying for one is easy. All you need to do is use the comparison table on this page and compare the caravan loans available. Look at all your different options and when you find one that’s right for you, click the ‘Go to site’ button which will take you through to the lender’s website. Once you’re on the website, it’s as easy as completing your application form online and waiting to hear if you receive approval for your caravan loan.
Typically, to be eligible for finance you must be at least 18 years of age. You must also have a good credit rating and be able to demonstrate this to the provider with evidence such as bank statements, payslips and copies of other credit contracts. Other loans may also require you to be a New Zealand resident/citizen or already be a member of the financial institution.
What documents do I need for my caravan loan?
Your application will run much smoother if you have all your documents ready and available when you apply for your caravan finance. You need:
- Driver’s licence or passport as proof of identity.
- Payslips or proof of income.
- Confirmation of your address.
Frequently asked questions about caravan loans
Can I get pre-approval on my caravan loan?
The majority of lenders offer pre-approval on caravan loans, which can help your bargaining power dealing with the sales manager when buying your next caravan.
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