Most people who love the water dream of owning a boat that they can use whenever they want. Boat loans provide the funds needed to purchase a new or used boat for water activities like fishing, water skiing, sailing, and sometimes, living. Boats are a big expense, no matter what size the vessel. But like any financing, boat loans can be achieved with information and advance planning.
Boat loans are primarily considered as recreational financing, unlike business loans or home mortgages. There are several options available from which borrowers can choose for this type of specialized purchase. This article contains the following information about boat loans:
In order to make the best decision, potential boat owners should research a variety of ways to get all or part of the money needed to buy a boat. Some boat lovers have saved money towards the purchase of a boat, others need to have the boat fully financed. Factors to take into consideration are assets, credit scores, and how much to borrow. Ways to finance a boat include:
Once the borrower has window shopped for the boat they want, and understand the options for financing, it is time to find just the right lender.
There are limitless lenders that offer loans to boat lovers. Some borrowers apply for loans at the bank where they currently do business. Sometimes, they get discounts or other perks for a history of a good financial relationship. Credit unions are another source for current customers to look for boat loans.
Several marina lender associations have relationships with financial institutions to help customers find funding to buy boats. Financial service companies provide access to various finance programs available to borrowers. These companies advertise in boating publications and other places of interest to boaters.
Depending on the lender, applications for boat loans can be in written form, fax, or over the phone. The larger the loan, the more documentation is required. Borrowers can expect to provide at least two years of tax returns and a personal financial statement. The borrower has to supply the following information about the boat on the application:
Just like any other credit, such as equipment loans and auto loans, the borrower should be prepared to give permission to the lender to perform a credit check, as well as verify employment and residence.
Borrowers should have a list of valid questions ready to ask the lender. This will help the borrower to make a more informed decision about which lender to choose. These questions may include:
Before approaching the lender, the borrower should write down any questions that are specific to their situation. For instance, the borrower of a used needs to know if the lender finances used boats as well as new, or whether the lender offers bad credit boat loans.
Some lenders specialize in securing boat loans for people with bad credit. Like any subprime (low credit score) loan, borrowers can expect to pay higher interest rates and fees. Other requirements may include:
Borrowers with bad credit should prepare to provide detailed verifiable documentation such as income and tax returns. Paying off as many accounts as possible, and bringing any late accounts current, will also help result in an approval.
The myth that only rich people can own a boat has been disproven for decades. People from all over the world, in a wide range of incomes, have turned their love for boating into a reality. The key to their success is a well charted plan that includes the size boat they need, sensible financing, accurate information, and determination.