Purchasing a caravan or motorhome can mean more holidays, more family time and more opportunity to see the world. With the right caravan or motorhome finance deal, life on the road can be very achievable.
Representative 15.9% APR (Variable)
Representative example: If you borrow £7,500 over 5 years at a Representative APR of 15.9% and an annual rate of 15.9% (fixed) you would pay £177.82 per month. Total charge for credit will be £3,169.20. Total amount repayable is £10,669.20. Minimum repayment period is 12 months. The %APR rate you will be offered is dependent on your personal circumstances. Freedom Finance is a leading credit broker and not a lender.
A conditional sale means that the borrowing is secured on the caravan or motorhome itself until the debt is cleared. A deposit is paid first of all, usually to a value of 10-20% of the total debt, and then subsequent payments are made at a fixed interest rate over a fixed payment term. As the loan is secured, the borrower can benefit from favourable interest rates as the risk to the lender is reduced.
A hire purchase agreement is dependent on the credit score of the potential borrower, with the most favourable score attracting the most favourable rates and terms. A hire purchase agreement is often an interest-free loan meaning that the cost of the caravan is simply split across the length of the term, with no additional costs.
The caravan or motorhome becomes the legitimate property of the borrower only when the final payment has been made. If payments are defaulted, the lender has the right to repossess the caravan, so borrow only what you can afford to repay.
A second charge mortgage can also be used to purchase a caravan or motorhome.
This large sum loan is secured by using the borrower’s house as collateral. The house is then at risk should repayments not be made.
Securing the loan against an asset means that a borrower can benefit from low interest rates and a lengthy repayment term. However, more interest is repaid overall and a long-term commitment to repaying a loan increases the chances of financial change, which may affect the ability to repay the loan.
Taking out a personal loan is a popular way to purchase your caravan or motorhome, as the lending can be arranged quickly and without a deposit. The personal loan is granted based on the applicant’s credit score and their perceived ability to pay it back. The most preferential rates are reserved for those with the best credit history. This personal, or unsecured, loan means that the borrowing is not secured against the caravan or motorhome, meaning it is not at risk should payments be defaulted.
However, failure to make your personal loan repayments can result in charges, court judgements and considerable damage to your credit score. Whatever finance route you wish to go down, make sure that you shop around for the best deal to suit your individual circumstances. Although you can benefit from holidays sooner by spreading the cost of the caravan or motorhome, don’t forget that the debt must repaid whatever the season.
Our aim at Freedom Finance is to provide you with the information you need to make educated decisions when it comes to your borrowing and your money. The online financial market place is filled with conflicting, jargon-filled information about which loan product is the right one for you.
These deals may look attractive, but many of them apply only to those with an outstanding credit history. In reality, the best deal on offer might not be available to you. With our comprehensive finance guides, we aim to equip you with the know-how to make the best decisions about your borrowing and your money.
Check out our helpful guides:
Whether you're planning on some home improvements, replacing your car or simply getting your finances in order, a loan from Freedom Finance could be more affordable than you think. Use our calculator above to find the ideal loan for you. All quotations given are for illustrative purposes only. Credit subject to status. The rate you are offered will depend on your personal circumstances, credit assessment procedures and other related factors.