How to use the caravan loan calculator
To use the caravan loan calculator, you’ll need to enter some details about the caravan finance you’re considering. Here’s a summary of what what each of the calculator inputs means:
1
Caravan purchase price
This is simply the value of the caravan, motorhome, or RV you wish to buy. If you’re calculating repayments on a secured caravan loan (this is similar to a car loan), the loan amount generally can’t be higher than the caravan’s purchase price. If you’re considering an unsecured personal loan, you may be able to borrow more money to cover other costs.
To give you an idea of potential purchases prices, the average loan amount requested for a new caravan in 2023 is $63,672, according to Money data. The average loan requested for a used caravan is $42,601.
2
Initial deposit / trade-in amount
If you’re planning to put a deposit towards the cost of the caravan, enter that above. If you’re upgrading the caravan and trading in your old one, this could be the old caravan’s trade in value. Your loan amount for the repayments calculator will be based on the caravan purchase price minus any deposit or trade-in.
3
Interest rate
Caravan loans often come with a fixed interest rate. This makes the repayment calculation more straightforward. It means the regular repayment amount and total cost generated by the calculator will not change.
4
Loan term
This simply means the length of the caravan finance agreement. Perhaps surprisingly, the term of your caravan loan has a big influence on the cost calculation. Try different terms and watch just how much your regular repayments and overall costs change. Most borrowers ultimately choose a five-year term, our data shows.
5
Establishment fees
Make sure your upfront fees are factored into your caravan loan calculation. It will give you a more accurate estimate of your total finance cost.
How does the caravan loan calculator work out your repayments?
Working out how much your regular repayments will be is not as simple as dividing the loan amount by the number or repayments during your loan term. The repayment calculation needs to account for the interest that will be charged on your caravan loan too.
This is done by using what’s called an amortisation calculation. What that means is it adjusts for the gradual repayment of your caravan loan balance over time. See, you pay more in interest at the start of the loan when the balance is high.
So a bigger portion of the repayments on your caravan loan go towards clearing the interest at the start. And the actual loan balance is paid off relatively slowly.
But as the loan is paid off gradually, the interest charges get lower. And you start to pay off the loan balance itself faster. The caravan loan calculator works all of this out for you and gives a repayment amount that will apply throughout the term (assuming the interest rate is fixed).
Example of weekly caravan loan repayments
Caravan loan amount | $10,000 |
|---|---|
Repayments (7% interest) | $45.70 |
Repayments (9% interest) | $47.90 |
Repayments (12% interest) | $51.33 |
Caravan loan amount | $20,000 |
Repayments (7% interest) | $91.39 |
Repayments (9% interest) | $95.81 |
Repayments (12% interest) | $102.67 |
Caravan loan amount | $30,000 |
Repayments (7% interest) | $137.09 |
Repayments (9% interest) | $143.71 |
Repayments (12% interest) | $154.00 |
Caravan loan amount | $40,000 |
Repayments (7% interest) | $182.78 |
Repayments (9% interest) | $191.62 |
Repayments (12% interest) | $205.33 |
Caravan loan amount | $50,000 |
Repayments (7% interest) | $228.48 |
Repayments (9% interest) | $239.52 |
Repayments (12% interest) | $256.67 |
Caravan loan amount | $60,000 |
Repayments (7% interest) | $274.17 |
Repayments (9% interest) | $287.42 |
Repayments (12% interest) | $308.00 |
| Caravan loan amount | Repayments (7% interest) | Repayments (9% interest) | Repayments (12% interest) |
|---|---|---|---|
$10,000 | $45.70 | $47.90 | $51.33 |
$20,000 | $91.39 | $95.81 | $102.67 |
$30,000 | $137.09 | $143.71 | $154.00 |
$40,000 | $182.78 | $191.62 | $205.33 |
$50,000 | $228.48 | $239.52 | $256.67 |
$60,000 | $274.17 | $287.42 | $308.00 |
How is interest calculated on a caravan loan?
The caravan loan calculator has also been created to mirror how lenders actually calculate interest on loans.
Lenders apply interest on caravan loans as an annual percentage rate (APR).
But because the balance of the loan is continually changing as you pay it off, interest is calculated daily.
To do this, the lender takes the current balance of your loan for each day and multiples it by the annual interest rate.
That amount is then divided by 365 for the daily interest charge.
Because lenders charge interest monthly, your daily interest charges for the current month are added up and added to your loan balance.
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