Finance

You need to work out your caravan finance and how much you can afford to spend before you go and look at any caravans. Oh, don't we all wish we had one of those legendary money trees at the bottom of our garden!!

Remember though, you may have to find quite a lot of money at the start to buy the caravan and all the kit you will need but, in the long run, compared to holidays abroad you will find caravanning cheaper and you will be able to have many more holidays than your non-caravanning friends!!

Caravan Finance

If you don't have enough money put aside to buy the caravan outright, these are the caravan finance options to consider:

  • Hire purchase
  • A personal loan
  • A secured loan or adding the amount to your mortgage
  • Using a credit card

Hire Purchase

This is a type of loan which is secured by the caravan, in other words, you won't actually own the caravan until the last payment is made! Your caravan dealer will usually be able to offer you this type of loan and should explain all the details before you sign on the dotted line. You will probably need to pay a deposit and then make regular monthly payments until the debt is repaid.

Always check the APR (annual percentage repayment) as the higher the APR the worse value of the loan. Always shop around to find the lowest APR. A good way of comparing loans is to work out how much you would pay in total for each loan. The internet is a great way of comparing loans - there are many comparison websites.

Personal Loan

You can get a personal loan anywhere these days - supermarkets, online, at your bank, etc. Again, always check the APR which they are offering you.

You tell them how much you want to borrow and over how many months and they will calculate how much you will need to pay every month which will include the interest.

You are able to sell the caravan before you have finished the loan but remember that you will still be paying the loan unless you pay it off from the proceeds of selling the caravan.

Secured Loan or Adding the Amount to your Mortgage

A secured loan is a loan which is secured against your house, for example. So if you did not keep up with your payments the loan company would be able to claim the money back through the sale of your house.

Alternatively, you could add the amount needed to your mortgage which will spread out the payments and maybe make it more affordable. Always remember to ensure that you will be able to afford the repayments if the interest rates increase over the years otherwise you could end up losing your house.

Credit Card

If you have a hefty deposit to put down against your new caravan and only need to find a little money, you may wish to consider using a credit card. Always remember to check the APR and shop around again to find the best rate.

ALWAYS REMEMBER TO CHECK:

How much are the monthly repayments and can you afford them?

How much interest will you pay over the whole of the loan period?

How long will you be paying the loan?

Are there any penalties for paying off the loan early?

Don't rush into buying your caravan - take a while to check and investigate your caravan finance deal before accepting it - you may find a much better deal, especially on the internet.


What caravan finance did you use or can you recommend a company to other caravanners? Click here to let us know.