Owning a speed boat was once limited to those who can pay cash. And since this kind of watercraft can be very expensive and very few lending companies offer boat financing terms, only few can really afford it. But as lenders see that most buyers are good clients for loans, they added boat loans with their existing real estate and auto loans. Some even specialize on boat loans alone, dedicating their staff and funding for this purpose. Finding a financing service becomes easy.
Check with your bank first if they offer boat loans. If they do, inquire about the rates and the loan term. If they don’t, call other banks or check the websites of different local, regional and national banks. Banks are always good lenders as they have stable funding. Loan approval is also fast as long as you have a good credit standing.
You can also check financial services companies which are often connected to local, regional and national lenders. Their advertisements can be found on different magazines, publications and websites dedicated to boating.
If you are a member of a union, check if it offers boat loans. Credit unions offer the most attractive rates among the three. Members can easily get approved so contact them and ask for a competitive loan.
Different lenders use unique terms for the types of loans they offer but generally, they are just similar to real estate loans.
Fixed term simple interest loan or fixed rate loan is the simplest, most common and generally considered as most favorable loan as it maintains the same monthly payment throughout the entire loan term. The good thing about this is that, you can budget your finances and allocate a precise amount of money for the loan because you know how much you will pay month in and month out.
Variable rate loan bases your monthly payment on different interest rate indexes. Variable rate loan is often offered as a fixed rate loan (with low introductory rate) for a definite period of time before it bases the rate in different variables. While you cannot predict your monthly payment, you can benefit from this kind of loan if the rates suddenly become lower in the future. But since it is more complicated, you have to understand first how this works in order to assess if it really is for you. Ask your lender everything about variable rate loan before taking it.
Balloon payment loan lets the borrowers to pay the balance of the loan at a specific time. It is sometimes a preferred type of loan to borrowers who know that they will own the boat for a certain period of time.
Regardless of which lender you choose, you are guaranteed to pay low down payment as low as 10% to 20% of the total amount of the boat (the rate of down payment is based on the age, price and type of the boat). Some lenders even have zero-down offerings on new boats. Since the loan goes for several years, payment is easier. And if you are offered with longer financing terms, monthly payments are further reduced.
Finally, by applying for financing, you can get larger, newer, more expensive, more powerful and better boat than what you have wished for.