Personal Loan vs Caravan Loan: Which Is Better?

A personal loan for a caravan costs 1 to 4 percentage points more than a dedicated caravan loan in most cases, adding $3,500 to $9,000 in extra interest on a $50,000 purchase over seven years. But a personal loan wins in specific scenarios: older caravans that cannot be used as security, purchases under $15,000, and when you are buying a caravan plus doing a fitout that a secured lender will not cover. Here is how to decide.

What the banks are actually selling you

If you search for "personal loan for caravan" you will land on pages from ANZ, NAB, and Westpac. Each bank has a dedicated URL with "caravan" in it, which makes it look like a specialist product. It is not.

These are the same unsecured personal loans the banks offer for holidays, weddings, or debt consolidation, with caravan-specific marketing copy wrapped around them. The rate, terms, fees, and approval criteria are identical to the bank's standard personal loan. There is nothing caravan-specific about the product itself.

This matters because when you compare the bank's "caravan loan" page against a specialist secured caravan finance product, you are not comparing two caravan products. You are comparing a generic unsecured loan against a purpose-built asset finance product. The rate gap reflects that difference in product design, not a difference in value.

The two products compared

The cost difference at real purchase prices

The flexibility premium: what you are actually paying for

The biggest reason people choose a personal loan over secured finance is flexibility. No PPSR registration means you can sell the caravan anytime without involving the lender.

But how often does that flexibility actually get used?

Most caravan owners keep their caravan for five to seven years. The caravan lifestyle tends to be sticky: once you have invested in the setup (annex, solar, towing gear, favourite parks), you rarely sell within the first two years.

On a $50,000 loan, the "flexibility premium" costs roughly $3,400 over seven years (the net difference after insurance). If you sell within year two, you might have valued it. If you keep the caravan for the full term, which most buyers do, you paid $3,400 for an option you never exercised.

The question to ask yourself: is there a genuine reason I might sell within two years, or am I paying for a hypothetical that probably will not happen?

When a personal loan genuinely wins

When secured caravan finance clearly wins

For the majority of caravan purchases, a dedicated secured product is the stronger choice.

New caravans over $30,000. The rate saving outweighs insurance costs, and the caravan qualifies easily for security. The larger the amount, the wider the gap.

Purchases over $50,000. Most bank personal loans cap at $50,000 to $75,000. A secured caravan loan goes to $150,000 or more. For higher-value tourers, it is the only option.

Long-term ownership (5+ years). If you plan to keep the caravan, the flexibility of a personal loan is worthless to you. You are paying a premium for an option you will never use.

Clean credit history. The rate difference between secured and unsecured is widest for strong applicants. If your credit is good, you are leaving the most money on the table by choosing unsecured. If your credit is impaired, see our guide to caravan finance with bad credit.

The hidden cost most comparisons miss: insurance

Every comparison that just shows "secured is cheaper" without factoring in insurance is incomplete.

Most secured caravan lenders require comprehensive insurance for the life of the loan. On a caravan valued at $50,000, that costs $600 to $1,200 per year. Over a seven-year loan, insurance adds $4,200 to $8,400 to the total cost of the secured option.

This does not make secured more expensive than unsecured (the rate saving still exceeds the insurance cost on loans over $30,000), but it narrows the gap significantly. If you would not have insured the caravan otherwise, the insurance premium is a real cost of choosing secured.

That said, comprehensive insurance is generally advisable on a $50,000+ asset regardless of your loan structure. If you would insure it anyway, the cost is neutral between the two options.

Quick decision guide

This article is general information only and is not financial advice.