Boat Loans

Most sea loving people like to own boats. Before buying a boat, customers need to determine the type of boat they need, the money they can afford to spend on a boat, and finally searching and finding a boat that fits their needs, budget, and desires. Some kinds of boats that are available in the market include ski boats, sailboats, aluminum boats, bass boats, and pontoons, etc. All of these boats can be purchased either new or used. It may be noted that financing for houseboats is processed like home loans, but the terms, points, and rates differ.

After deciding on the type of boat and the budget, you can keep shopping till you find a boat of your choice. It is recommended to get pre-qualified for a boat loan before making the actual purchase as it increases the negotiation power of the customer. There will be no unnecessary haggling with the boat dealer and all your concentration will be on closing the deal (boat purchase) to your liking.

Applying for boat loans

Credit unions, banks, and other types of financial institutions offer boat loans. A few financial firms and banks keep collaborations with the National Marine Lenders Association and promote themselves as specialists in boat loans.

Applying for boat loans is similar to auto loan applications. Customers will need to offer proof of income and other documentation. The lenders will also pull the credit score of the buyer; it may be noted that the higher the credit score, the lower will be the rate of interest. Also, if the credit score is lower than the minimum limit designated by the lender, then the boat loan may not be approved. Customers with bad credit may note that there are financial companies that offer boat loans to people with low credit scores.

Terms of Boat Loans

Boats loans are commonly available as variable rate loans, fixed rate loans, and balloon-payment loans. Variable rate boat loans have a good interest rate of interest at the time of purchase and tend to change after some time. Variable rate and balloon-payment loans are ideal for customers who opt for short-term boat loans. However, those who want boat financing for a longer term should opt for fixed term and fixed rate loans as you will know the amount that you need to repay each month and thus are prepared for it.

The boats are used as collateral by lenders and loans of up to 89 percent may be offered by them. If the boats feature sleeping areas, a kitchen, and head, then the boat owners can get tax deductions for the interest paid on the loan.

Most boat loans come with a capped term of under 15 years. Boat loans over $100,000 are allowed repayment tenure of 20 years. New boats typically require a 14 to 19 percent down payment, while used boats may come with a 9 to 19 percent down payment option.

It is important to remember that boats are an expensive investment. Hence, ensure that you keep shopping around till you find the right kind of boat that is affordable to buy and upkeep.