Steps to take when applying for leisure finance
If you are interested in financing your dream motorbike, or have your eye on a shiny new boat, then you will need to apply for leisure finance. Leisure finance is a type of finance that applies to leisure vehicles and assets, such as caravans, motorbikes, jet skis, and boats. And the finance provider has strict guidelines when checking and vetting the asset from the dealer, which means you are only getting the highest quality offer.
Applying for leisure finance is an effective and money-saving way to find the motorbike, boat or caravan you have been dreaming about. This is because it is tailored to the asset you are looking at and will provide interest rates that you can afford. For example, if you are looking at a used caravan, you will find that the interest rates are different to that of a used car. So, if you are planning on buying a leisure vehicle, keep reading for the steps you need to take when applying for leisure finance.
Figure out your affordability
When you are applying for leisure finance in South Africa, you should figure out your affordability. You can do this by taking your monthly income, after taxes and deductions, and taking off all of your living expenses. This will help you to arrive at your disposable income, which is what you will be using when repaying your leisure finance loan.
This number will allow you to create a budget, and you can use an online calculator to help you create a clearer picture. Knowing how much you can afford will help you to choose the right vehicle for your needs and for your wallet. You can also tell the bank exactly how much you can afford to repay each month, which can help you to negotiate terms and conditions for your loan.
Do a credit check
After creating a budget and working out your affordability, you will need to perform a credit check. This can be done for free online and will provide you with your credit history and your credit rating. Your credit rating is what the lender or bank will look at when deciding on whether or not you are a high-risk client when applying for a loan.
If you find any discrepancies on your credit history, you can contact the relevant credit bureau to question these. This way you can rectify issues and explain them to the bank when they ask about them. You can also take steps toward repaying all outstanding debts, which will reflect positively to the bank and show them that you can afford and manage taking out leisure finance.
Get your documents in order
Once you know how much you can afford and what your credit rating is, you can start gathering your documents for your application. These documents are important and are used to ascertain whether or not you are a viable candidate. The documents you will need are:
- A copy of your green barcoded ID or smart card
- A valid driving licence or skipper's licence for a boat or jet ski
- Recent payslip or other proof of income, not older than three months
- Proof of residential address, no more than three months old
- Insurance details
Once all of these documents are in order, you can move forward with the application process. Be sure that the insurance you choose is comprehensive and will cover your leisure vehicle from every eventuality.
Choose your leisure vehicle
Now that you have drawn up your budget and provided the right documents, you can choose your dream leisure vehicle. If you are looking for a motorbike, you should look for one which is sturdy, solid, and able to handle long road trips. Your boat should be the right size for your needs and the caravan you choose should be spacious enough for your family.
Once you have chosen the right vehicle, you will need to take certain documents to the dealer in order to make the purchase final. These documents include the following:
- Signed marital status if you and your spouse will be making the purchase together
- Documents to prove your physical address and income (payslips and utility bills not older than three months)
- Original ID and driving licence as well as a valid skipper’s license
- Proof of insurance on the vehicle
The dealer will then sign all of these documents and you can send these off to your bank for approval.
Find your dream vehicle
Applying for leisure finance might seem difficult but the process is quite simple and straightforward. Start by calculating your affordability and performing a credit check. This will allow you to have your financial ducks in a row, and you can then move on to getting your documents in order and choosing your motorbike, jet skis, boat or caravan.
