Caravan finance is a way of getting yourself another home to live in. It means you can have the pleasure of living in a caravan as well as your already owned house, without spending too much money on building space for it or putting an extension onto your existing property.
If you would like to know more about going down this route then keep on reading to find out the pros and cons of caravan loans.
Pros of caravan loans
Low cost of deposit
There are many benefits to take advantage of when you want to buy a caravan with finance. The first benefit is the low cost of the deposit. You can get a loan for up to 90% of the total value, while some lenders may not limit what percentage you take out, giving you more options in your search for finance.
The flexibility of repayments
Caravan loans are very flexible with their repayment terms. Be aware that not every lender will offer the same deals, but you can expect a repayment term of up to 10 years on most loan deals, making it easier for you to make monthly repayments.
Opportunity to improve your credit score
The lenders who provide caravan loans will take into consideration your credit rating to find out if you are eligible for the loan. If you have a bad credit rating then it’s still possible to get the money, but you may have to pay more interest or there may be other requirements before they lend you the money.
If you’re able to meet all of your repayment obligations, this can improve your credit score and make it easier to get future loans!
Cons of caravan loans
More expensive than buying outright
As with every financial transaction, you should weigh up the pros and cons to find out if it is right for you. The first drawback of caravan finance is that it will be more expensive than buying your caravan outright. This is because you’ll obviously need to pay back the loan plus interest and lender fees. But it can be a better option if you do not have the money to pay for the whole caravan outright, as you’ll just need to make monthly repayments.
Interest rates
With some loan companies, the interest rates on caravans will be more expensive than with others. You should always search around for quotes from different lenders before deciding on one. The best way to find out if you can afford the loan is to work out what your monthly repayments would be, which you can do by using a loan calculator.
Make sure that you only take the amount of money that you need and make sure that repayments are affordable before securing your caravan finance.
In order to find your lower possible interest rate, make sure to compare your caravan finance options with Driva.
