Have you found the boat of your dreams? The in all likelihood you need to find a boat loan. That is of course you are independently wealthy and can afford to pay cash. Since you are on this page we are going to assume that is not the case.
Boat loans are similar to car loans, although the approval criteria may be a bit stricter. The good news is boat loans are loans are simpler than home loans, but it may not seem that way during the process. Boat dealers often work closely with banks and lending institutions. However, just like new care dealers you can often find a better interest rate elsewhere. The trick is not be persuaded by an over zealous boat salesperson and letting them convince you that the contract must be signed today. Any number of tactics like telling you, this deal is only good today or something similar will be used to insure and complete the sale.
Boat loans are available for New or Used Boats. Lenders want to make loan for boats as boat loans are considered one of the most profitable consumer loan products a lending institution can participate in. This can be used to your advantage if your have a good credit score.
Economic conditions may make it tougher to get a loan as many see boat as the ultimate luxury. It could prove to be helpful to pre-qualify before boat shopping so you have an idea of what you can afford and how much money you can safely borrow. It would best not to mention this to your salesperson as they will be sure to remind you, their company can approve you for more than you can safely afford.
Do everything you can to avoid emotional decisions when financing your new boat. Buying a boat is a momentous occasion for most boat lovers and you should remain calm and level headed throughout the process. Think before you act and you will better prepared to make an informed decision about your new boat loan.
Where To Get Boat Loans
There are literally hundreds, maybe even thousands, of companies that provide boat loans. Some will be better than others and some will be easier to find. All will offer you different terms, rates and refinancing options. Not only do you need to know where to find these companies but which ones seem to stand above the rest.
Probably the best and easiest way to find a company for your boat loan is to talk with your current bank. You already have a good history with them so it is likely that they would want to keep your business with them. With such a large amount that will be asked for, it is worth asking if they can extend boat loans. They also may be able to give you a better interest rate than another lender because they do know so much of your financial history already.
It is also worth asking around to people you know. They will likely have plenty of advice on the banks that they go through as well. This is especially helpful if you have friends who own or have financed boat loans. They will be able to point you in the direction of somewhere good or steer you away from a bad company. This will also give you the ability to talk to other people about their boat loans and interest rates. When you put in an application for your own boat loan this will allow you to see if the rate you’re being offered is competitive.
As with many things these days one of the best ways to find a good boat loan company is on the Internet. You will be able to research the companies and their histories at the same time, which will save you valuable time down the road. Boat loans are a sensitive thing and you want to be sure you’re getting the best.
One of the many companies available online is Secured Marine Trust. This type of company could be a good place to start looking for your boat loan. An admiralty attorney who specializes in boat loans and financing founded the company. SMT is a global company and are very knowledgeable about the transaction process.
Another good option for you boat loan could be a company like Excel Credit. They do not specialize in boat loans but they do offer additional services like extended warranties and boat insurance. Another unique feature that Excel offers is a rate quote. Most companies don’t do this on boat loans just because there are so many variables.
Finding a company to handle your boat loan is a very personal choice that will take care and consideration to make. Boat loans are a big investment, using this information will assist you in making the best decision.
Be Prepared For Your Boat Loan
Getting any type of loan can be a frustrating experience, but this frustration can be heightened with boat loans. The banks do want to loan the money, but since a boat loan is seen as a luxury they can be stingier than with something else. There are a few pitfalls that you may run into, but with a little bit of information the chances of a problem are greatly reduced.
Once you know that you will need a boat loan, it’s a good idea to pre-qualify. Go into the bank and tell them you are looking into boat loans. Point out that you want to know two things, how much they are willing to lend and how much of a boat’s value they will lend. Most of the time they will not offer to lend the entire value of the boat. Don’t forget that the value and the asking price can be drastically different.
If you have already found a boat that you wish to buy, write down all the details. Any identifying number that you can find on the boat needs to be noted. If the boat has an outboard motor be sure to write down those numbers as well. Do the same with a trailer, if the boat comes with one. Note the length of the boat, if it is painted or galvanized, steps, fenders, and anything you can think of. Also factor in accessories. When the bank is considering the boat’s value, this is a very important aspect. No matter how trivial it may seem, write it down. If you forget something the bank may come up with a lower than accurate value and the boat loans you get offered won’t be enough.
Now that you have your information, go home and research. The website, NADA.com is great for looking up the particulars on your boat. When you put in the model number and year remember that even if a boat was manufactured in 2004 it may be a 2005 model. Learn to read the model number, for example a T in the number means the boat has a tunnel. This adds to its value. Also know exactly what the website means for the different options. As an example, when nada.com asks about a fire extinguisher you may be tempted to check it if your boat has one onboard. But this is only asking about built in fire extinguishers, that erroneous value is not something you can likely afford. All of this will affect boat loans.
Make sure the boat’s value is correct and go to the bank. They will go through the same process for the value that you did, you should make sure they arrive at the same number. Otherwise your boat loan will be too low and you will have to come up with more money elsewhere. With any luck you will be approved for the exact boat loan you need.
Boat Loan Lenders
Choosing the right lender to get your boat loan from can be stressful and take a while to do. Not every lender will work for everyone, all boat loans are different and you need to find the right one. To find the best rate and the best terms, you will need to compare the companies and what they have to offer. Putting in a little time will only save you money in the long run.
One thing you must remember is each boat loan company has different requirements for qualifying for boat loans. Policies surrounding the boat loan and the terms will also vary. In general, there are four types of boat loans.There are fixed rate, variable rate, simple interest, and balloon payment. You will need to do some research to find out which type of boat loans a lender offers and which they do not.
Look at a lender’s history first and foremost. Like many other lenders how long they have been in business is paramount. Having a long-standing record of providing boat loans is a good indication that they do not lend irresponsibly. The last thing you want is to get a boat loan and have the company get bought out and your rate to increase. It’s also not a bad idea to check with the Better Business Bureau and see if the boat loan lender has a clean record with them as well. That will give you access to most major problems, like if the company has ever had any big complaints or lawsuits brought against them.
While it may be time consuming and a hassle to shop around to different companies, it is vital if you want the best boat loan company possible. You could call one company and they offer you an average variable rate, you can take that. But if you do, you may never know that the company down the street would have given you the same percentage but a fixed rate. Call around and get some quotes. This will help you determine how you can save yourself money down the road.
Take care when filling out the applications, be sure that you have all the information you need. If you are unsure then take a minute to check. All of the information they ask for will determine your offer. Leaving something out could make the difference between being accepted or denied, getting a good rate or a high one. This is not meant to frighten you, just to make you aware of what you need to know for boat loans. Be cautious and sure of your answers and you cannot go wrong.
Once your quotes are in place, you can make a better decision about which lender will be best for you to work with.Take your time with this. It’s not a race to see who gets approved. If you take the time required, you won’t be disappointed when your boat loan comes back approved.
Qualifying For a Boat Loan
Purchasing a boat is a big commitment; there is no denying that. Boats are expensive and most people have to finance the purchase. There are many boat loan lenders, and there are finance programs that can be accommodated to any individual situation. Obviously anyone getting boat loans will want to get the best rate. There are several things you can do to make sure that you qualify for the best terms.
The first thing you should do when looking into boat loans is to check your credit report. Your credit report and score play one of the biggest roles in determining whether you qualify or not. And if you do qualify, it will determine the interest rate that your boat loan gets. By checking your credit before submitting the application you can determine if there is any inaccurate information there. You don’t want any surprises so it’s in your best interest to know exactly what is there.
Boat loans are clearly a huge financial expense. So any lenders you choose will want to look at all your financial information. They will likely ask for a your paycheck stubs, a list of monthly bills, and other financial assets you may have. Gather this information beforehand to help avoid any delay in processing your boat loan.
Know how much you want to borrow. By now you should have figured out the boat’s value and have a pretty good idea of how much money you will need. Don’t let the boat loan lender persuade you into spending more. You know better than anyone how much you can afford, some lenders may try to sway you into thinking you need more but remain firm on what you need.
Provide as much of a down payment as possible. With most boat loans, the boat itself is what secures the funds so collateral will probably not be required. This is a really great place to get a better interest rate if you have not so great credit. Save your money for a while for a larger down payment and that will be reflected in the terms of your boat loan. Down payments are not required, but it can help if other factors aren’t working in your favor.
Now you are ready to submit your boat loan applications. This process can take awhile as they have to review many factors to determine boat loans. It is helpful to submit multiple applications at one time. Once the quotes come back, you will be ready to compare the terms and choose the best boat loan.
Refinancing A Boat Loan
Once you have had your boat loan for a while, it may be in your best interest to refinance it. As with any loan there are a lot of reasons one might refinance boat loans. There are also a few things you will want to keep in mind when refinancing. Getting the most out of your money is the main goal.
One of the main reasons to refinance a boat loan is to take advantage of a lower interest rate. If you have had your boat loan for a few years it would be worth checking to see if the interest rates have lowered. You could save yourself a considerable amount of money yearly. Just as an example, lowering boat loans of $300,000 from 7.5% to 5.99% may not sound like much but you’ll save over $3,200.00 a year on your payments. This extra money can be used to pay off your boat loan even quicker or toward another purchase.
If you are considering refinancing it is worth looking at other kinds of boat loans as well. You may want to look at refinancing your boat loan to one with a shorter term. The monthly payment will increase but you’ll save money on the total amount of interest and pay it off faster. Or you can switch from an adjustable interest rate to a fixed rate. This provides the comfort of knowing the interest rate over the life of the boat loans.
An important factor to consider is how much longer you are planning on owning your boat. If you are only planning on having your boat for a few years, then an adjustable rate boat loan might be best. This will offer lower interest rates for the first few years. Or a balloon rate, these also offer a lower rate and shorter term financing. But if you are planning on keeping the boat for more than about five years a fixed rate boat loan will likely be the way to save you the most money.
The refinancing process will be greatly reminiscent of the original boat loans process and you will find many of the same costs and procedures. Really though the refinancing a boat loan is much easier than getting it in the first place. Since the lending institution already knows your financial status, they generally won’t need to check this information again. But they will look closely at your history on the existing boat loan and make much of their determination on that.
Once you’ve decided to refinance, look for a rate in much the same way you did the first time. Your existing lender could have the best rates and programs, but they might not so shop around a little. However, your existing lending institution may waive some of the fees and costs for you so you’ll have to weigh your options. Keeping your boat loans at the best rate possible takes nothing more than some dedication and attention to the current interest rates.
