Caravan Loan is pretty similar to any other type of personal loan, with one notable exception – they come with an extremely high-interest rate and repayment terms of up to 10 years. Still, if you’re looking to finance your caravan purchase and don’t mind paying interest rates double that of regular loans, then caravan loans might be just what you need! Here are some things you should know about taking out a caravan loan before you decide whether or not it’s the right choice for you.
Some Basic Details About Caravan Loan:
How it works
Caravan loans are easy to get, but that doesn’t mean it’s not important for you to do your research. There are two main types of caravan loans: unsecured and secured. An unsecured loan is just like any other personal or consumer-based loan. The lender will charge interest on your outstanding balance and expect full repayment at a specified term, with late fees in place if terms aren’t met. Secured Business Loans differ in that they make use of an asset (the campervan) as collateral against default. Basically, should you fail to repay in time, your vehicle can be repossessed until debts are paid off.
How much can I borrow?
There are no universal rules regarding how much finance companies will lend against caravans. It all depends on what the lender thinks it is worth, so in many cases, it will simply come down to how much collateral you have and how secure that is. If there’s more than one person interested in financing your caravan, for example, they may be able to offer higher loan amounts because two bodies are better than one when it comes to payment security.
Am I eligible for a Caravan loan?
In order to be eligible for a Caravan Loan, you must have been employed by your employer for at least six months and also earn at least R3 500 per month. Another requirement is that you do not own an asset that is used as security for another loan. Do not feel discouraged if you do not meet all these requirements, though, as there are other factors which could play in your favour when it comes to getting a Caravan Loan.
For example, if your employer contributes towards your debt on a monthly basis or pays off certain expenses on your behalf, then such additional payments will go towards increasing your credit score. The same would apply should they be able to provide evidence of any cash transactions and bank transfers they made on your behalf – any such transactions will count towards improving their credit score.
How to apply for a Caravan loan
Even if it’s your first time applying for a Caravan Loan, it should be relatively easy. Decide how much you want to borrow and let your bank or broker know about your decision. The application process for a Caravan Loan is simpler than that of many other types of loans, like personal loans or credit cards. Your bank should help walk you through all of the particulars in order to secure financing and allow you to travel as soon as possible. Then again, everyone has their own financial situation, so not every application is simple and straightforward – especially if you have a less-than-perfect credit history or low income.