You have decided to get a boat and are scratching your head on how to get financing. Firstly, you’ve made the right decision, and nothing brings more fun to you and your family than having an asset like a boat that you can use when you want to spend time together out in the waters. But this is a serious investment, and before you think of the financing to go for, the following tips will help you.
Think of the loan term
The loan term will determine the amount you pay monthly. More extended periods translate to less monthly installments, and therefore you need to consider other things you’re paying for every month. The good thing is, with the current lending climate, getting a boat loan that you’ll repay for even 20 years is no big deal. That means you can get a boat worth thousands of dollars and repay comfortably even as you take care of other obligations. When it comes to such loans, the total after the last repayment doesn’t matter much- what’s important is getting the financing and repaying without strain.
Beware of the misconceptions.
Boat financing today is not as it was a few years ago. Most of the things that applied those days are no longer valid. For instance, no lender was willing to stretch loan payments beyond ten years. The assumption was that the boats devalued quickly and would not be serviced after a decade of use. But today, things are different. Many financial institutions can give you a boat loan for even 20 years. Today’s boats and engines are believed to be strong and longer lifespan. Again, there used to be a 20-30 percent down payment for every boat loan facility. That is no longer the case. Today, some financiers don’t even make a down payment for your boat loan. That has made it easy for anyone to get boat financing.
The effect of your credit score on the financing
Like any other form of financing, your credit score will affect the above variables. If you have a good credit score, you’re most likely to get lenders who will ask for no down payment. If your score is low, the financier considers you “high risk,” Therefore; you should be prepared to pay some substantial amount as a down payment. Although the terms may not be very favorable, there are other programs for people like you who have less than ideal credit scores.
Remember, the cost of the boat is just a part of the bigger picture. Other fittings to be installed in the boat; some electronics, safety gear, and some other amenities. There are commissioning expenses like launching and bottom painting, or you may need some big-ticket like a trailer added to your package. In that case, you need to find out if it’s possible to roll the additional costs into the initial boat loan. That way, you can take off quickly.
If you’re planning to own a boat and probably don’t have enough to buy it in cash, you can always get boat financing from a reputable financial institution. Do your research properly and consider the above aspects, so you don’t get frustrated.