Financing a Boat Purchase
Owning a boat is a dream come true for many. But for most of us, saving thousands of dollars to buy a yacht is simply not in the cards. Unless you secure financing, your dreams of sailing could run aground. You should evaluate your options and pick one of many cheap boat loans with the best terms.
How to get a boat loan
There are many options to finance your boat purchase. First, you should establish a good relationship with a lender to ensure the transaction will go through seamlessly. Find someone with plenty of experience in setting up boat loans specifically. But instead of approaching a general lender, you may want to work with a specialist. He will take you through the application process to avoid the pitfalls that come when doing business with a financial institution for a special type of purchase such as this one. The next step is to go to a dealership and find a vessel that suits your needs. Make sure you list all the accessories you’d like and have them added into a comprehensive quote. Once you’re done, ask the loan specialist to recommend you to the best lenders. Ask how much of the boat’s value they think such brokers would be willing to lend.
Why should you finance the boat purchase?
Financing the boat purchase will substantially free up your cash savings, given how expensive even the smallest vessels can be. Some manufacturers even offer to finance new models without any down payment. The best lenders will offer a loan with a longer repayment period and low-interest rate. Marine finance specialists will ensure you get a better deal than those offered by credit unions and local banks. Because you’re working with a professional, you can also expect an initial response within 24-48 hours. Finally, financing allows you to get a newer, safer, and more enjoyable boat. If you qualify for the full amount you apply for, the boat loan specialist will provide you with a list of reputable insurance agencies.
Information you need to secure a loan
Before you apply for a loan, you should check your credit report. To secure a good loan, you should improve your current credit score as much as possible before hand. Come up with a realistic budget that will make the purchase possible. After that, establish a timeline to make the payment. Don’t forget the added expenses that come with owning a boat. You should consider costs such as insurance, maintenance, fuel, dock fees, storage, safety equipment, and more. A general rule of thumb is to estimate the operating expenses at around 20% the value of the vessel. Before you meet a boat loan specialist, you should have all the documentation necessary for their typical due diligence process. The lender may ask for a bank statement to analyze your financial position. Lenders use this information to confirm that you’re not overburdened by other loans.
The repayment period for a typical boat loan
A typical boat loan can have an average repayment period of 10-15 years. The actual period will depend on the amount borrowed and the interest rate. Keep in mind that only a borrower with stellar credit can qualify for the lowest interest rates, so don’t necessarily assume such as part of your budget planning. With a longer repayment period, your monthly payments will be lower of course. To keep yourself from getting into trouble and risking losing your vessel, you should take a loan with monthly repayments that you can afford. A boat loan specialist will guide you through the terms and help you see the bigger picture, as they also don’t want your debt to become a problem.
Financing a boat is a daunting task if you don’t know where to start. A boat loan specialist will work with many lenders to ensure you get the best deal. As long as you plan properly and seek such specialized assistance, you can make your dreams of owning a boat a reality.