There are a lot of options available, and just as many providers out there offering pretty much the same thing, so you have the space to shop around in order to find the perfect plan for you.
Research the caravan finance options on offer
From Hire Purchase or HP and Personal Contract Plan (PCP) to Buy Outright 0% Finance, there is a whole host of loan types that you can choose from when it comes to buying a caravan and spreading the cost. As well as these, you can use a credit card to fund the purchase of your dream caravan. Or, you could not technically ‘buy’ your caravan at all but instead, opt to hire it for the long term using a PCH or Personal Contract Hire agreement.
Weigh up the pros and cons
Once you have done your research and are clear on the differences between the options, it can be helpful to jot down a list of pros and cons for the options that are most appealing to you in order to help clarify things in your mind.
Be clear on the total cost including interest rates
Don’t be deceived, some loan deals may look good at first glance and offer low monthly repayments, but they could come with high interest rates and hidden fees too. Factors to consider include Total Amount Payable, APR or Annual Percentage Rate and interest rates. You should also check whether the loan comes with a Fixed Rate or a Flat Rate.
Confirm your credit rating
Before you apply for any type of caravan finance, you need to know what your credit rating is. If you have a poor or below-average credit rating you will not qualify for certain types of loans. Once you know your score you are in a stronger position and can avoid wasting time and energy applying for finance plans that you will be rejected for.
Need to improve your credit rating?
If you need to take action to improve your credit score to be eligible for the type of caravan finance that you want, the below can help:
- Make sure you are on the electoral ro
- Don’t accumulate high levels of debt
- Never make late payments on utility bills or other standing orders and direct debits
- Stay clear of joint credit with someone that had a poor credit score
- Cancel any credit cards that you don’t use
Compare plans and providers
Even if a plan looks good on paper, it still pays to shop around to see if there’s anything better out there. Shopping for a loan is a bit like dating, you want to test the waters first and be sure you’ve made a good choice before you commit. Even if a loan provider has a flashy website, you should always check customer reviews on impartial sites such as Trust Pilot. If the provider has a physical office, it’s good to go in and talk to someone face to face, too.
Never lie in an application
It might be tempting to lie in order to try to qualify for a great deal such as an interest-free loan or Buy Outright 0% Finance. But this should be avoided at all costs, not only because could you get in serious trouble but it could also cause you to be prevented from applying for credit and finance ever again. Credit checks, employment checks and FinTech are all very advanced these days and you are very unlikely to get away with it.
If you’re unsure just ask
You should never feel pressured or rushed to make a decision about a loan or finance plan. And you should also never feel intimidated or confused before signing something. If you have any questions then ask, and if you don’t find the answers you receive clear or satisfactory then go elsewhere. To avoid making careless on-the-spot decisions ask the person you're dealing with for a print out of the different loan options and then take your time to mull over them in the comfort of your home.