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What You Need to Know When Financing Your New Boat
Obtaining finance for your new boat is much the same as applying for a loan for any other major purchase including a new home or new car.
As a purchaser, you are advised to use a financier or lender that has industry knowledge and experience in boating and marine so that you obtain the best deal and service available. One major advantage of obtaining finance from a marine lending company that has experience financing boats is that they will give you a good indication of whether the boat you want to purchase is worth the cost that you have been asked to pay. Their experience should also assist in ascertaining whether any depreciated value from the retail cost applies to ensure you get a fair deal.
An experienced marine lender would also make certain that the boat has a clear and legal title prior to the transaction being completed. Legal title is critically important to minimise your risk and exposure in any settlement claims that could be made by other interested parties after your purchase. Purchasing a boat with an encumbrance i.e. without legal title has the potential to cause you a lot of unnecessary worry and result in unexpected expenses.
Loan Comparisons
You are strongly advised to test the marketplace to compare the rates and services of different lending agencies when seeking a finance deal for your new boat. It is important to assess which lender has the most knowledge and experience in this marine finance to increase the likelihood of getting the best lending advice and deal available. It is also good practice to compare lending interest rates applicable to your purchase loan. While the lowest interest rate will save you money over the term of the loan, it is essential to take other relevant factors into consideration including marine insurance or other insurance coverage costs for your boat during the term of the loan.
In addition to the above, it is also important to make a proper assessment of the terms of the loan offered by each prospective lender for boat financing. Read the fine print to make certain that you understand the marine loan terms and can make a reasonable comparison between the loans being offered. Look for the best deal but make sure that you are comparing "apples with apples". Also note that sometimes a boat loan offer will seem like a good deal but a proper assessment of the fine print terms and conditions can result in discovery of something unacceptable enabling you to reject that particular loan offer.
One major factor to consider when assessing your boat finance deal is the down payment and the amount you have to pay each month. If the down payment and monthly payments are too high, this will have a big impact on your monthly budget and lifestyle. Locking in to higher monthly payments will decrease the duration of your boat loan but be careful to assess the impact of the payments on your budget and other monthly expenses.
Assess Your Personal Financial Position
You should assess your personal financial situation before looking for a company to provide you with a boat financing deal. Firstly, check the details of your credit history? Your personal financial credit rating will impact on the loan offer being made to finance your new boat. If you have a good credit history, you are likely to be offered better terms and conditions for your loan with the finance lender.
This will play a big role in what type of offers you will receive. The better your credit score the better terms and conditions you can expect from a boat financing company. Consequently, the knowledge of your personal credit score will give you some indication of the offers that you might expect a finance company to make when you apply for a loan to buy your new boat.
Your employment status and work history will also be important in the process undertaken by the financial lender when assessing your loan application. Employment factors including the stability of your job, how long you have been with your current employer will be considered by the lender.
As a prospective boat purchaser, you also need to consider your employment stability and earning capacity to ensure that you have sufficient income to make the payments required for the boat loan repayments.
Assessing your personal financial status against the loan repayment requirements will help you determine whether you can really afford a new boat boat loan or whether you should delay your purchase decision until your personal financial situation improves to enable you to apply for a boat loan.
