Boat Finance

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We help everyday Australians find, compare and secure boat loans in record time.

The Ultimate Guide To Boat Loans

What Is Boat Loan

A boat loan can be a secured personal loan that is intended to finance a boat. It is a more common secured loan that allows boats to be used as a guarantee, or an unsecured personal loan. You may consider using the boat as a security loan if you’re searching for a competitive rate.

 

Due to the fact that boats are costly,expect that some lenders may offer bigger loan amounts and may give long repayment terms. There may even be a large payment due or balloon payment at the end of the loan term depending on the loan you wish to avail.

How to Compare Boat Loans

 

It is very essential to choose the right financing for your boat. When you compare your options remember to consider the following:

 

  • Fixed Repayments.  Think about whether you want fixed repayments or if you prefer a variable loan to take advantage of market fluctuations. But most boat loans may give you fixed repayments.

 

  • Interest Rate. The interest rate for a boat loan depends on the lending company you go with, but rates for secured loans are normally low. Try your best to choose a loan with a competitive interest rate that will help you reach your money-saving goal.

 

  • Loan Term. A boat loan term tends to be longer. But some may extend only up to seven years. It is necessary to choose a loan that offers you sufficient time to pay off your debt. Calculate and figure out the length of your loan term to pay off your desired loan amount.

How to Lower Interest Rates in Boat Loans

First, you have to ensure that your credit is in good standing. Next, you have to prepare your payslips, ID, and details of your finances such as income, assets, expenses and debts. Each of these documents proves that you are capable of having the loan repayments. Lastly, it is very necessary to compare your loan options before you apply for a boat loan. You may focus with some low interest rate personal loans.

5 Amazing Ways to Get a Boat Loan Easily​

1. Securing a Pre-Approval

One of the best things you can do when buying a boat is getting a pre-approval.
This is a letter from a lender stating assurance to the borrowers of a certain loan amount if the loan application is completed.

 

When you have a pre-approved loan, you will be able to shop around for a budget knowing you have the money to get your boat. You will feel confident bargaining on the showroom floor and if there is a boat you are interested in; you will have the chance of negotiating knowing that another buyer is not going to trump you.

 

A pre-approval will allow you to have a budget, which will help prevent you from overspending when buying a boat.

 

The loan application process is going to be sped up when you have a pre-approval. The processing time is going to be reduced, which means your loan is going to be approved fast, and you will get the boat you want.

2. Answering the questions honestly with a broker

During the discussion with your broker, you should be completely honest. Just like any other loan application, the answers you give are going to determine the amount of money you can get and terms and the interest rates you will get for the loan.

 

If you prepare beforehand, you will have an easier time. You can prepare for the following questions;

  1. Have you ever filed for bankruptcy?
  2. How much do you make?
  3. Do you own a home?
  4. How long have you been living in your current residence?
  5. How long have you been in your current job?
  6. What is your net worth, do you have a credit card?

3. Giving the lender more security

When you apply for a boat loan, the lender is going to look at your ability to repay the loan. This is the reason why lenders ask for proof of employment and income, investment, and bank savings.

 

The lender is going to take the loan against the boat as security. This means they can seize the boat if you don’t make the repayments.

 

If you are going to give the lender more security, then make sure you have declared your other assets like;

  1. A large deposit
  2. A home equity
  3. A car title in your name
  4. A guarantor (Committed
  5. family member/relative)

 

This will go a long way in increasing your chances of approval and also help you get a better interest rate from the lender.

4. Thinking of the operating expenses

Whether you are looking at a 10ft boat or a 40ft boat, it is a good idea to think about the operating costs of the boat.

 

When you have a large cruiser, you can easily end up incurring costs that will blow your accountant out of the water – from the engine service to marina spaces, and if you are going to travel, the money you spend on fuel.

 

You will have an easier time managing a smaller boat and you don’t have to spend a lot of money on it.

 

This is why it is important to thoroughly think about the type of boat you are going to get when filling out the loan application.

 

The cost is more than just the price of the boat, you will need a lot of money for operating expenses, and this can end up affecting your financial status in the next couple of years.

5. Looking for the Best Boat Loan

You don’t have to choose a lender in your local area. Take your time and look at different options so you can choose the best deal for you.

 

Different financial institutions are providing different loan products, whether it be credit unions, banks, or private lenders. They provide a wide range of loan products to choose from, which means there is a good chance of getting a product that works for you.

Some of the Main Venues to Find Boat Loans

  • Marine brokers. This source of financing will be used when you are buying a pre-owned boat. Brokers are going to connect the buyer to the seller, help them in finding a boat that meets their needs, negotiating the sale and working through the entire purchase process. Many brokers out there offer their services to sellers, but they can also have buyer services, like connecting buyers with finance programs, and also hold deposits in a different bank account in escrow. If you choose to hire a buyer’s broker, they are going to represent you as the buyer and not the seller, which means they are going to help you in finding the right boat that meets your needs while being within your budget.
  • Credit unions, banks, and online lenders. 20% of boat loans are offered by the lenders directly online. Credit unions and banks may also offer competitive rates and discounts, especially if you are an existing customer.
  • Dealer financing. About 80% of new boats are bought through dealership financing deals. The banks have a relationship with the dealerships, and the dealerships have a relationship with the customers. The dealership refers customers to the banks.
  • Shopping around. If you are going to get a used boat, then you need to ensure that the boat is worth what you are paying. It is a good idea to consult an industry resource when researching the prices and value in the area. Whether you are getting a new or used boat, you need to make sure you compare the loan rates and terms from different lenders. With the boat loan calculator, you are going to decide on the monthly payments using interest rate, loan amount, and the term of the loan. The calculator is going to do a breakdown of the payments by year, which is good for planning ahead. If you break it down and realize that the payment is a little out of your budget, then you can adjust the loan term and/or the loan amount so you can find what works best for you. When the time for buying comes, lenders are going to look at your creditworthiness then give you possible loan offers.

How Long Can A Boat Be Financed?

 

Before you can decide on taking to the high seas, you need to know how long you are going to finance the boat. You can stretch a boat loan up to 20 years, which is longer than a car, and is almost the same as a home mortgage. Different factors will determine whether to borrow for that amount, and an example is the price of the boat, which can cost a couple of thousand dollars to million-dollar yachts. The shortest loan offers the lowest rates, but you have to make higher monthly payments.

We protect your credit score

At Credit Capital, as we pride ourselves on building lifelong relationships with our clients, we go above and beyond to ensure that your credit score is looked after. We do all the work ourselves up front, before submitting an application to a lender, to ensure that who we apply to is 100% the best lender for your individual circumstances, and the approval is almost guaranteed.

Book a free consultation with one of our experts today!

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