Find the right holiday style with caravan finance in South Africa
A caravan is big enough for some family fun which includes road trips where you can explore the beautiful and wild scenery of South Africa. If you’re short on funds, many banks offer vehicle finance, and personal loans to help you achieve this mobile lifestyle.
Dig deeper into our guide to find out more about this option. Here are the main things you’ll read about:
- How caravan loans work
- Their key features
- The best way to compare caravan loans
- How to apply for caravan finance online
How does caravan finance work?
The process of getting caravan finance in South Africa can be summarised as follows:
- You shop around for the caravan you want. You can either get it from a caravan dealership, a private seller, or an auction.
- Once you know how much the caravan costs, next you find out which lenders can help you. For example, our comparison tables feature popular South African lenders to choose from.
- After comparing loans and choosing your lender, go ahead and start the caravan finance online application process. Just click the “Go to Site” button while you’re on this page and you’ll be directed to the correct website.
- If your information and documents are in order, your application will be approved, and you’ll have to sign a loan agreement.
- Once the caravan has been paid for, you can start using either occasional holidays or weekend trips. At the same time, you’ll be paying back the loan in monthly instalments. Once the loan is paid off, you become the owner of the caravan.
Main features of caravan loans
Looking at the key features of caravan loans can also help you better understand how they work:
- Loan amount: Typically, you can borrow from R10 000 up to R300 000. How much you borrow depends on your income and credit score.
- Loan terms: You can borrow for up to 7 years which gives you the flexibility to choose a loan repayment plan that is right for your budget.
- Deposit: You can always get a 100% caravan loan, but you can also put up a deposit. This is a lump sum of money (usually from your savings) that you pay upfront. It reduces the amount you have to borrow and therefore saves you on interest. Usually, the deposit ranges from 10% to a maximum of 20% of the value of the caravan.
- Balloon payment: This is also a lump sum of money that you have to pay, but unlike a deposit, you pay it at the end of your loan agreement. This ensures your monthly payments are affordable.
- Pre-approval: If you get pre-approved for a caravan loan, it means you receive the loan before you go shopping for the caravan. This allows you to work with an already established budget. Also, if you’re buying from a dealer, it gives you some negotiating power.
- Purchase agreement: If you can’t get a pre-approval, you’ll need a purchase agreement from your seller first before you can get the loan approved.
- Type of caravan: Most lenders offer both new and second hand caravan finance.
- Buying the caravan: You can also apply for caravan dealership finance or caravan private seller finance.
How to choose the best caravan loan for your budget
Choosing the best caravan loan involves comparing many lenders and their various loan offers. It helps to consider the following factors:
- Loan amount and loan term – Check the minimum and maximum loan amount and term for each lender to ensure they’re flexible enough for your needs.
- Interest rate – You can choose a fixed rate or a variable rate. Either way, try to choose a loan with the lowest interest rate. If your credit score is excellent, it’s easier to negotiate for a lower interest rate. Moreover, be mindful that the more applications you make, the more your credit score may suffer as a result.
- Other charges and fees – Some costs that include monthly service fees and an initiation fee can make your loan expensive. The lower the overall cost of the caravan loan, the better.
- Qualification requirements – Find out what is needed for you to qualify for each loan and if you can meet the requirements.
- Other features of the loan – Check for loans with more advantages. For example, a loan where you can make early repayments at no extra cost might be better for you.
Caravan finance requirements
- Minimum 18 years;
- Have a valid South African ID;
- A regular monthly income (usually above R6000);
- Proof of your income (the latest payslips and bank statements for the last 3 months);
- Have a valid South African or International Driver’s licence;
- A clean credit record; and
- Proof of residence (the latest council or utility bill).
- If you’re applying for second hand caravan finance, some lenders limit the age of the caravan. The caravan should also not be stolen, recovered, or rebuilt.
Find your monthly payments with our caravan finance calculator before you apply
This caravan finance calculator is an excellent tool. Before you take out a loan, it helps you to calculate the amount needed per month as you pay back your loan. This monthly repayment depends on the amount you want to borrow and the length of time you need to finish paying off the loan. Here’s a simple 3-step process to help you get started:
- Use the first sliding tool to input the loan amount.
- Use the second sliding tool to input the loan term.
- Click “Calculate Repayment” to get your result. This result appears in the comparison tables above for each lender, so you can easily compare loan offers.
How do you apply for caravan car finance online in South Africa?
Making an online application for your caravan loan is easy and saves you time. Start by using the caravan finance calculator and comparing the different lenders featured in our comparison tables above. Once you have made your choice click “Go to Site” for the caravan loan provider you want. This link leads you to the lender’s website where you can fill in and submit an online application form. If you’re approved, you’ll have to sign a loan contract after which you can collect your caravan or have it delivered.
What happens if you fail to repay your caravan loan?
A caravan loan is a type of vehicle loan, and these are usually secured. That means the caravan you’re buying is used as security for the loan. If the lender can’t recover the loan from you, they’ll claim the caravan instead. To avoid losing your caravan, here are a few tips to help you choose an affordable loan that is easy to repay:
- Use our caravan finance calculator to choose a monthly repayment amount that works for your budget;
- Consider opting for a balloon payment to get affordable monthly repayments. You can also refinance the balloon payment, so you pay it in monthly instalments.
- Shop around for a suitable caravan in your price range. If a new caravan is too expensive, consider buying a good second hand at a lower price.
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