Motorhome & Caravan loans & finance options

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What to know about caravan or motorhome loans

What types of caravan or motorhome finance are available?

Caravan loans are a way to get the finance you need to buy a caravan or motorhome. (No surprises there.) But, just like with other vehicles, there are a few different types of caravan or motorhome finance you can consider.

Personal loan

A personal loan is when a lender lends you a fixed amount of money, then you pay it back in monthly instalments (plus interest) until the end of your loan term. There’s no deposit required, and you’ll own your caravan or motorhome as soon as you’ve used the money to make your purchase.

Secured loan

If you’re a homeowner, you might have the option to take out a secured caravan loan to finance your caravan or motorhome. A secured loan is a loan that’s secured against your property. You might have also heard it called a homeowner loan or a second charge mortgage. This is because it’s a second charge that sits behind your first mortgage, if you have one. (You don’t need to remortgage to take out a secured loan).

Secured loans often allow you to borrow larger amounts as there’s more security for the lender. They can also come with longer repayment terms which can lower your monthly repayments. However, if you fail to pay back your loan, your home could be used to recover the debt.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Conditional sale

A conditional sale is a type of caravan finance where the debt is secured against 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 repayment term. Once all the payments have been made, you’ll own your caravan or motorhome.

Hire purchase

Hire purchase is similar to a conditional sale, however you’re usually given the option to buy the vehicle at the end of the agreement instead of automatically owning it outright.