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Boat Financing Tips

boat financing

Boating is a fun pastime that offers rest and relaxation. While most people enjoy lounging on a rented boat or a boat owned by a friend or family member, other choose to purchase their own boat and finance the purchase. The price of boats vary. For this matter, boat financing may cost you an additional $300 to $600 a month. If you can afford the extra monthly expense, financing a new or used both is a good idea. On the other hand, if you are uncertain about meeting the expense, weight the pros and cons of boat financing. In some instances, it may be more beneficial to delay the purchase until household finances improve. Here are few boat financing tips, which could potentially save you money.

Have a Down Payment

Boat financing is similar to financing a vehicle. Downpayments are not required. However, the more money applied as a down payment, the lower the monthly payments. Additionally, downpayments may also result in a lower interest rate. Typical downpayments vary. For the most part, individuals interested in financing choose a downpayement of at least 10% of the purchase price. Therefore, if the purchase price for the boat is $20,000, the recommended downpayment is $2000. Of course, the finance company will accept higher downpayments. If hoping to lower your monthly payment obligation, consider a large downpayment.

Compare Different Boat Financing Companies

Some boat retailers offer in-house financing. While this sort of financing is convenient and quick, the dealer may not offer the best finance package. Before determining an interest rate, the boat financing company will obtain a copy of your credit report and base interest rate on the three digit score. However, three bureaus handle credit reports. Moreover, your credit score will vary bureau-to-bureau. By chance, the finance company may review the credit report including the lowest score. For this matter, shop around and acquire finance quotes from various lenders. Before finalizing decision, meticulously evaluate each quote.

Select a Reasonable Finance Term

Typical finance terms for an autmobile are three to five years. However, if planning on financing a boat, it is possible to acquire loans up to fifteen years. Before financing a boat for an extended period, consider all the risks. For instance, longer finance periods equal more money. Reducing the loan term can potentially save thousands. Instead of a long finance term, opt for shorter terms – perhaps five to seven years. If possible, delay financing a boat until you’ve finished paying off personal use vehicles.

Tips for Getting Approved for a Boat Loan

Prior to applying for boat financing, make sure that your credit is up to par. Person’s with low credit scores or negative remarks may be refused financing. Nonetheless, getting approved for financing with less than perfect credit is possible. Yet, this typically involves higher rates. If looking to financing a boat, car, home, etc., consider the following tactics to improving credit:

• Reduce debt to income ratio
• Never pay bills late
• Pay past due or collection accounts
• Avoid excessive credit inquiries
• Avoid maxing out credit accounts

Published: 2006-05-05
Author: Valencia Higuera

About the author or the publisher
Valencia Higuera is a freelance writer from Chesapeake, Va. The Old Dominion University graduate has a degree in English with an emphasis in creative writing and journalism. Writing credits include non-fiction articles for print and online publications.

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