Boat Loan Rates

Boat loan rates vary depending on various factors. In some parts of the country, the rates are considerably lower than in other parts. However, the most critical determinant of the rates is the age of the boat you intend to buy. Buying a new boat is advantageous because it comes with a full factory warranty, although you should have the boat surveyed beforehand. However, new boats do not necessarily attract the best rates owing to various factors. Thus, new boat buyers are advised to come up with at least 20% of the price of the boat as down payment. This not only secures a good deal, but also ensures that the boat's re-sale value does not fall below the outstanding loan balance.

For used boats, especially the popular models, it is a little easier to get good rates. Furthermore, the depreciation rate for an old or used boat is quite low compared to a new boat. Before the loan is approved, the lender will look for a current boat survey and also check the boat's published price. The buyer's financial capability is, however, the most important aspect that the lender will consider.

It is very important to plan realistically for the boat's day-to-day operating costs, and not just the loan rate. There are certain dock payments that may come as a surprise to you, so be prepared. Also, you should estimate the boat insurance cover. The best estimate should be 1% of the boat's replacement value.

How to get the best boat loan rates
It is always advisable that you should first shop around before choosing a lender. This is applicable for all loan cases, including boat loans. There are scores of lenders who deal with boat loans, but not all of them offer the same rates. The most reputable sources normally post their rates in the media. You can pick the best rate that suits you and get a preliminary loan approval. Thereafter, start looking for the boat you can easily afford with the loan.

Ensure that you always present your correct financial details. Lenders usually carry out background checks before a loan approval is given. Hence, any skeletons in your credit history will definitely come to light, no matter how much you try to hide them. If you are seeking to buy a new boat, you may also need to consider coming up with the 20% down payment at this stage. Otherwise, your chances of getting a good deal will be slimmer.

Always show your capability to repay the loan amount you are applying for. Usually, lenders look at an applicant's liquidity, cash at hand and overall net worth. These factors determine how much risk you pose to the lender. If you have proof that you receive an adequate monthly income, and on top of that, you offer a handsome down payment, your net worth will certainly be improved and you will not be a great risk after all. Remember, the lower the risk you pose, the lower the loan rates.

It is also logical that the price of the boat you intend to buy should not exceed your annual income. Do not be so determined to secure reasonable rates that you overlook the ratio of your income to the boat's price. Chances are that with a higher ratio, you will get quite affordable rates.

Before you actually start seeking boat loans, you should always ensure that your credit history is clean and you have a good score. All your outstanding debts should be settled in due time. In addition, do not hastily send your application to 10 or more lenders because that can detrimentally affect your credit score. With a good credit rating, there are high chances that you will get good rates.

Finally, shopping for lenders online also heightens your chances of getting lower rates. Due to high competition, many online lenders offer alluring deals to attract more customers. The process of application is also less cumbersome and you can get an approval in 24 hours. However, you should be very careful when choosing a lender in this was as some are mere cons.