How long can you finance a boat
How long can you finance a boat? This is a common question that people who want to go into financing boat. Personally I think before you can start financing a boat, the question how long? Should be asked. Financing a boat can take as long as ten to fifteen years. The interest rate charged on financing a boat actually depends on the size, length, type, and model of the boat. Financing a boat can be for different reason like for fishing, sports, recreational activities or just for sailing.
There are many institutions that lend money to finance a boat but most lenders are usually coming from the NATIONAL MARINE LENDERS ASSOCIATION. According to them, the average term for financing a boat is ten to fifteen years.
Best way to finance a boat
- Check your financial status. You should check how much your net income worth. Get your financial details together, the money owed, money at hand and the ones in saving. You should know how much you are making a day and how well you have asses to you budget because when you start financing a boat, you would be making down payments, you will care for the boat which is maintenance cost, insurance on the boats and tax would be paid on the boat. Are you financially stable to cover this?
- You should know why you are financing the boat. As much as boat is more accessible, what are other reasons do you have to want to finance a boat? Is it for sporting, recreation or for just sailing or you want to lease it out to any borrower to use the money in financing the boat itself. Most buyers use the boat itself as collateral from marine financing company so that the boat will be able to be used to generate funds for itself to be used in financing it. Financing a boat can be very easy as the dealer makes it a point of duty by partnering with specialist in finances that can guide and provide loan to the buyer in buying the boat. They can make financing the boat easier for you as you do not need to pay tax on the boat or any necessary marine assessments because they have added all charges to the loan amount.
- Compare the offers. The down payments and interest rate varies from one lender to another lender. For example, there are some lenders who would charge 17% for terms that are up to 13 years while some would charge a down payment of 17% for 15 years. Personally, I would prefer the down payment of 17% for the terms up to 15 years. You should be able to get lenders that has his down payments in favour of your financial status and also his amounts corresponding to the best boat it could buy. You do not need to worry about the best boat your money can buy, the dealer can do that for you as he is the one selling them.
- Consider the length of time you would be keeping the boat. Know how long you intend having the boat to know every penalties and charges on it if they are in support of your financial status. You should know if you will be able to pay off the debt before the end of the terms of time to be financing the boat. This makes you clear about how long can you finance a boat.
- You should get all documents needed to buy the boat ready. Get all documents that were needed for the loan process, get your financial status statement and the credit report with the tax reports as these documents would be needed to show how serious you are about buying the boat from the dealer. Be very precise and make sure you have a pre-approval letter from the lender.
- Get the lowest possible finance that you will be able to pay monthly
- Personally, I would prefer fixed interest rate over variable interest rate. The risk involve in fixed interest rate is very low as the interest rate do not change till the end of agreement date unlike variable interest rate that changes with time and the lender ends up increasing the interest rate.
- Get the manufacturer statement of origin to get the boat registered and insured
- Pay every necessary bills and fees like tax and try to get familiar with the state lending laws.