If you’re exploring caravan loans it probably means you’ve been thinking about owning a caravan for awhile – possibly years! 

You love the lifestyle of caravanning, the ability to pick up and go at any time without the shackles of having to book a plane or catch a train. From luxury to family caravans, this kind of travel spells freedom and a home on the road; ready to take you anywhere, from the high country to the deserts, coastlines and forests Australia-wide.

To let your inner gypsy out, you've started saving for a caravan, but it's a big investment and will take far longer than you’re prepared to wait. So you’ve started looking at caravan loans, but you’re just not sure how to sort the good from the bad? Here are some tips to help you head in the right direction. 

Analayse if you're loan ready

This is important. You need to first assess whether you can afford to take on a loan and make the weekly repayments.

To do this, look at your weekly budget and work back from here. Figure out the maximum amount you can afford to repay per week on caravan loans, with enough padding left over for any other additional expenses.

An online loan calculator can help you here, calculating weekly repayments and also the difference between competing loans.

Once you settle on an ammount you can comfortably repay, you can then start to explore the different loan options to find the best deal on offer.

Research all the lenders

Most people begin by searching online for different caravan loans. This is a good place to start, however, it will also throw up hundreds of different loan options from many different lenders. And so the real task you will have here is trying to figure out the good lenders from the not so good.

To help with this, ask for advice from people with experience in caravans, including:

  • local caravan dealerships, finding out who they recommend to their customers
  • state caravan associations and industry bodies, finding out who they use or recommend
  • caravan owners, finding out their own personal experiences with lenders

Getting the inside scoop on loans from people with real knowledge and insight will help give more context to the big decision you’re about to make.

Shop around 

Ok, so you have an idea on what to look out for and what to avoid, now it's time to start shopping around. Talking first to a loan specialist can be highly valuable. They can guide you through the fine print and explain the different terms and conditions. You can also use an online loan comparison tool to see how the loans stack up against each other.

The type of loan for purchasing a caravan falls under a ‘lifestyle’ loan. They generally run on a 5-year repayment basis, with some extending up to 7 years. 

Once you’ve found a few you like, get in contact with the lenders and find out just how competitive can be. See if they can match another loan that’s offering you a better deal, or offer a more flexible payment schedule to go with your budget goals.

You also want to keep an eye out for any additional expenses, such as ongoing bank and administration fees, which can all add up over time.

Have all your details sorted

Once you've found the right loan, the lender will want to see:

  • Information on your financial status, including income information, tax returns, assets and savings you have.
  • An invoice from the caravan manufacturer you’re purchasing your caravan from, with info on it’s model, condition, and that meets all the safety, design and maintenance standards to be towed on Australian roads
  • What you intend to use it for. Lenders can only approve loans on caravans that are used for leisure and not as permanent accommodation.

With this information, lenders can determine how much the caravan you want to buy is worth, the level of repayments you can afford, and how much they're willing to lend you knowing this.

Look at the home equity approach

There is also the option of accessing the equity of your home loan to purchase a caravan. If you have a home loan, as you pay it off and increase the value of your house, the equity can then be used to improve aspects of your lifestyle, such as purchasing a caravan.

Ways you can increase the equity to your home loan, include:

  • Renovations that improve your home’s overall value
  • Additional repayments on your home loan
  • Reducing your loan interest through an interest offset account 

With this kind of arrangement you definitely want to consult with a financial adviser of mortgage broker, to find out about the finer details. Interest rates can be higher with home equity arrangements and so you want to make sure you’ve scoped all of this out.

For the love of caravanning

If you love caravanning and are just itching to get on the road and start touring, then caravan loans can be a good option to explore. It’s important to keep in mind, however, that they come with their responsibilities and are only right when they can add value rather than stress to your life. All of this is possible if you plan properly, do the right research, consult loan experts, and only choose an offer that works with your situation. If you cover all of this, then you’ll be able to hit the road in no time and inhabit the dream you’ve been thinking about for years!

Got a caravan in mind and want to learn how to tow it confidently? Download our free guide 10 steps to becoming a caravan towing pro