Here on the site we have articles that cover car loans and motorhome loans. But since it is so common for people to buy a caravan instead, there is of course also the opportunity to borrow money for such a purchase. In principle, this loan is the same as a motorhome loan and almost the same as a regular car loan. Only a few minor details are different from the car loan.
Not all lenders have this type of loan, but it is usually just the larger banks that offer loans that are directly focused on caravans. It is also not certain that it is called caravan loan even though it is the same type of product.
Loan with collateral
When you lend money to a caravan you have the advantage that what you buy has a great value and also a value that will not disappear quickly. This means that the lender is prepared to use the purchased caravan as collateral for the loan. In the same way that a house stands as collateral for a mortgage.
This means that the lender may feel more secure about getting their money back if you as a borrower are unable to manage the repayments. Since higher risk in the near future always means higher interest rates, you can therefore expect a lower interest rate than for a private loan.
Although the caravan stands as collateral for the loan, it will not do so for the full cost. 80% of the cost is what the caravan can guarantee as the most. This means that 20% of the money must be paid in some other way. The fact that it is in this way has to do with the fact that everything purchased loses value even if a caravan does not lose value quickly. Should the loan-to-value ratio be at 100%, there is a high risk that the lender will not be able to use the caravan as payment for the entire loan.
The remaining money is best paid through either saved money or if there is something that can be offered as an exchange. Of course, it is also possible to borrow money to cover this amount, but then it is the question of a private loan that will receive a higher interest rate. If you want to borrow for the cash contribution, it is therefore important to calculate with this extra cost. If you have more money saved or can offer, for example, an old caravan that has more value than 20%, it is only good when you do not have to borrow as much money.
Since a caravan does not lose value as fast as a car, you usually have the opportunity to have a longer maturity. The usual range for this type of loan is between 2 – 15 years. If it is the question of a new caravan, you can most certainly choose for yourself exactly how long you want to repay the loan. If a used one is purchased instead, it is possible for the lender to set certain requirements. As for all loans, it is cheaper to pay off quickly, but the disadvantage is that the monthly cost will be higher.
Buy from an authorized dealer
A good thing to know about is that if you are planning to buy a caravan from a private person, it may be difficult to borrow some money for this. Iaf if it’s a caravan loan you want. Most lenders offering this type of loan require that the caravan is purchased from an authorized dealer.