What Is a Trailer Loan? A Beginner's Guide
If you've never financed anything bigger than a phone, a trailer loan can seem like a big step. It's actually one of the simpler loans around. Here's how it works from start to finish.
The basic idea
A trailer loan lets you buy a trailer now and pay it off in regular instalments, usually over one to seven years. Most trailer loans are secured: the trailer itself backs the loan. If the loan isn't repaid, the lender can take the trailer back. Because the lender has that safety net, secured loans are usually cheaper than unsecured ones.
Who they're for
People finance all kinds of trailers: a camper for family holidays, a boat trailer, a horse float, a car trailer for a race car, or a box trailer for a tradie business. If it's for personal use, you apply in your own name. If it's mainly for a business, the loan usually goes through your ABN.
Want to talk it through? Send a free enquiry and we'll pass it to a broker who does trailer loans every day. Enquiring doesn't affect your credit score.
What the lender looks at
- Can you afford it? Your income, regular expenses and other debts.
- Your track record. How you've handled credit in the past.
- The trailer. Its age, make, condition and price. A trailer that's easy to resell is easier to finance.
What it costs
Your cost is made up of the interest rate, any fees (such as an establishment fee or monthly fee) and how long you take to repay. A longer loan means smaller repayments but more interest overall. See our repayment examples for real numbers.
How the process works
- Work out your budget, including registration, insurance and anything your car needs to tow it.
- Send an enquiry. A broker talks through your situation and the trailer you want.
- The broker applies to a suitable lender with your consent. That's when a credit check happens.
- Once approved, you sign the loan documents and the lender pays the seller.
- You pick up the trailer and start making repayments.
Your protections
Loans for personal use are covered by Australia's consumer credit laws. Lenders and brokers must check the loan suits you and that you can afford it, and must tell you the fees before you sign. You don't have to accept an offer if it doesn't feel right.