How caravan finance interest works
Interest is worked out each month on the balance you still owe, at one twelfth of the annual rate. Early payments are mostly interest; as the balance falls, more of each payment repays the loan.
Caravan and motorhome finance is often spread over long terms, which keeps payments down but adds interest.
Worked example
Borrowing £32,000 at 8% over 84 months costs £9,895.74 in interest. Over 60 months it would cost £6,930.68, with payments of £648.84 a month.
Paying less interest
A bigger deposit or shorter term saves interest. Compare the total amount payable between dealers and lenders.
Inputs for the caravan loan interest calculator
Caravan or motorhome price
The price including any extras you're financing.
Deposit
What you're paying upfront. Borrowing less means paying less interest.
Interest rate (per year)
The annual interest rate on your finance. The rate shown is only an example, so enter the rate from your quote.
Term
How many months you'll repay over. A longer term means paying interest for longer.
CALCULATOR QUESTIONS
Caravan loan interest calculator questions
How much interest is on caravan finance?
Enter your figures above. For example, £32,000 at 8% over 84 months costs £9,895.74.
Does a shorter term save interest?
Yes. In the example, 60 months instead of 84 saves £2,965.06.
Why do I pay more interest at the start?
Interest is charged on the balance you owe, which is highest at the start. As you repay, it falls and so does the interest.
Does this include fees?
No. Add any fees from your quote.