Your Caravan Loan UK Questions Answered
You’re excited about the idea of living on the road, but you’re worried you won’t be able to afford a caravan or a motorhome. Thankfully, there are several options to finance your new lifestyle, even if you don’t have all the cash at hand for a house on wheels.
Can You Get a Caravan on Finance?
Most likely, depending on your specific circumstance. You just need to consider which is the best option for you. Here are a few options.
Get a Personal Loan
You might be thinking about asking your bank to give you a loan. Take a good look at the interest rates for an indication of the cost of borrowing, and compare the total costs against your other options. When you take out a personal loan, you can pay for the caravan in full, whether you buy new or secondhand.
But beware, banks tend to be reluctant to hand out loans and the interest rates can go through the roof during economic downturns.
How About a Hire Purchase?
This is almost like a personal loan, but you must repay the money to the dealership where you bought the caravan or to the lending provider you chose.
You can take out a loan for, say, five to 10 years and pay a certain amount every month. At the end of the contract, the caravan or motorhome is yours.
Going to a dealership directly might not be your best option, though, as you might be pressured into signing a contract with high interest. The best thing you can do is use a lending provider like Auto Finance that already works with many reputable dealerships. Check out their latest Buying a Caravan Guide (Top 10 Tips) for help on the matter.
You can approach the company for a loan no matter where you find your dream motorhome. The good thing about using a lending provider is that there’s considerably less paperwork and you can have your loan approved in less than one hour. In most cases, you won’t have to put down any deposit on your new motorhome.
Personal Contract Purchase
This is a good option when you’re on a tight budget and cannot afford high monthly payments. You can get more favourable terms and low payments, but the big difference is that at the end of the contract period you will need to make a one-off payment to cover the shortfall between the price and amount paid if you want to purchase the vehicle.
Credit Card Purchase
This can only work if you have an excellent credit score and a high credit limit on your card. You can use your credit card to cover at least part of the costs. However, work out the interest you’ll have to pay and see if it’s worth it.
A good option would be for you to have a 0% purchase card, which would allow you a few months of interest-free payments, so you can have your new lifestyle figured out before you start worrying about repaying your debt.
Final Words on Your Caravan Loan
Getting your caravan involves a lot of thought about its design, where you will buy it, and whether it will be brand new or used. Getting a loan helps make this purchase one that you can do sooner rather than later so you can enjoy life on the road.
