Boat Loan 101 – What You Should Know About Boat Loans!
A primary concern among many that you would have when deciding to buy a boat would be a boat loan, since many boats, especially the larger ones are very expensive. In some circles, they are known as white gold, because they are so expensive. Many people just do not have that kind of money lying around to pay for their new boat without taking out a boat loan. It is a good idea to do some research and find out all the different loan options and what they entail before you conclude your deal with the dealer. The dealer may have a lender to recommend, however before you sign up with that lender check around confirming where you can find the best deal. We thought that a little boat loan 101 – what you should know about boat loans would be helpful to readers and clients planning on purchasing a boat.
What You Should Know About Boat Loans!
If you are planning on using your local bank for your boat loan, they will approach the loan in the traditional manner. They will review your credit rating, your ability to pay the loan payments based on your other debts and income. Depending on all of this, they may offer you a personal loan that is secured with the boat as collateral for a specified interest rate and term. They are also going to want you to have a minimum of 10% equity in the boat or perhaps even more for some banks and lenders. The interest rate they offer will depend on how good a customer you are and how good your credit rating is. You will also have to demonstrate that the boat is adequately insured against various perils and there may be exclusions as well to think about.
There are other approaches to finding loans for your new boat other than using your bank which may be of interest to you. These dealer sponsored boat loans are similar to many car companies were they will offer car loans at competitive rates to enhance the deal and to make it easier for them to close the deal.
Arrange for Your Boat Loan Through Your Boat Dealer
This is often the easiest way to arrange for a boat loan and can be financially advantageous as well if you play your cards right. The first thing to remember is that you are actually negotiating two deals which are linked together. First of course is the price for the boat you are buying and all of the accessories that you have decided to take with the boat. Depending on the market and how hungry the dealer is you may be able to negotiate a very good price. Do not let your emotions get involved. You want the boat, but if you let your emotions get involved, you may pay more than you need to in your speed to get your new boat into the water. Do your home work and compare prices with other dealers before you make the purchase to confirm that you are obtaining the deal you are looking for.
The second deal is the financing or boat loan. The deal may be enhanced by the dealer if he has access to boat loan financing from the manufacturer or even a local bank. They may be able to offer lower down payments, a fast credit loan decision, longer financing terms, better interest rates and lower down payments. If they cannot move far enough on the price or the financing terms, do not give up yet. Negotiate for additional features such as electronics, storage, and other accessories that you may be interested in. They have this on site financing arrangement because they know they have a better chance of closing a sale if they can also add financing for the customer. Clients should know this and also take advantage of this opportunity as well if you can make it work and find the best financing deal.
Never sign or agree to the deal until you have fully negotiated both the price of the boat, the price of all of the accessories and services you need and also the boat loan that you need to purchase the boat. They are all linked together and come as a package. The dealer will try to separate them, but do not lose site of the package deal advantage that you have before you sign.
Comparing Boat Loan Deals
If you are really trying to find the best deal for your boat loan, comparing loans from various lenders can be a good way to either confirm an existing deal or find a better one. Using a broker sometimes can be the most efficient method. A broker will take all of your information, assemble a client package and then shop the loan application to several lenders who they know that are interested in providing lending to potential boat owners.
They will need the details of the deal associated with the boat you are purchasing. Be prepared to provide all of the information about your boat that you want to purchase. They will also need your income, your total debt payments, your credit rating and also your bank information in order to process the loan application. Since they are aware of current loan rates and terms, they should be able to provide you with a very fast response to your application with the best rate that can be offered for a boat loan.
It is exciting any time you purchase a new boat or even a used boat. Many people let their excitement get the better of them and their emotions prevent them from thinking through logically regarding the deal they are negotiating. Taking the step of applying for a separate loan and comparing loan deals will take some time and give you some time to think about all of the details of the deal for the boat and the loan.
Many people also focus on the details and there is a time for that, since you want to make sure that all of the features that you need are included. But focusing on the larger items such as the interest rate and term for the loan along with any fees can mean that you save a lot of money over the life of the boat loan. Discuss the details of the boat deal and the boat loan with someone you trust and ask for their input concerning how much you are paying and the features of the boat. Above all take your time making a decision and make the best deal you can in a businesslike manner.