At first glance financing a boat is a terrifying task. Most bankers approve or disapprove boat loans in less than an hour; they enjoy offering instant gratification on loans. If the lender has an Internet web site, they can often make a decision in minutes, 24 hours per day, and seven days a week. You simply just have to fill out a form, click the submit button, and you should know in a very short amount of time the answer.
When going about the task of selecting the proper lender, make sure they have a specialty in boat loans. This is particularly important when choosing to buy a used boat, if they are specialized in boat loans they will know the laws pertaining to boats and liens. Simply put, a knowledgeable lender can save you the trouble of buying a boat that does not have a clear title that may end up costing you literally thousands of dollars to pay off just to clear it.
Loan officers that specialize in boat loans will also have knowledge about how to add value and subtract for options or damage to the boat. Contact various lenders and shop around for the best terms. You should compare the various interest rates, down payment, and terms of their loan. Keep in mind the smaller the payment, the longer the loan will last. It is advisable to obtain a shorter loan term if you can afford higher payments. Shorter loan terms, in general, cost less than longer.
Typically, the standard down payment on a boat is about 20 percent. There are some situations where a lender may require more as a down payment; several things will determine the amount of down payment, such as credit history and amount of the loan. On the subject of credit, you should prior to applying for a loan, check your own credit history, if you notice any errors or outdated information it is important that you get them corrected before you apply. Prospective lenders will always check your credit prior to approving a boat loan.
There are other factors a lender will very likely consider when determining your eligibility for a loan. These factors include your salary, ratio of the installment debt to that of your income, job stability, and your disposable income. The total debt you incur monthly to income ratio cannot exceed more than 30 percent of your gross income, if it does it is likely you will not be approved for a loan. If this occurs, you should consider waiting until you have relieved yourself of some debt and apply again.
When you are considering how much money you should apply for, keep in mind any additional items that are not included in the purchase price. Add the costs for these into the price of the boat, as well as extended service contracts with the dealer for the engine and drive, do not forget insurance as well. These are all things to consider when applying for a boat loan. |
