Get A Boat Loan with 8 Helpful Tips
Acquiring a boat loan is just like getting a car loan. Both of them have the same options with low-interest loans, short term loans, long term loans including financing options like hire purchase, leasing and refinance.
If this is your first time applying and you want a boat loan for your needs, you might think that the entire process is overwhelming and confusing at the same time. The good news is that we’ve provided you with tips in this article that will help you in going through with this finance application and get approval.
Be Ready with Your Answers
One of the first things that you need to do is to be honest when talking to a broker about your initial loan application. Just like with any other loan, the answers you provide will determine the amount of money they will let you borrow, what interests will apply and the term for repayment.
This process is going to go a lot smoother if you have already prepared for these questions beforehand:
- Do you own a house?
- Have you ever filed for bankruptcy?
- How long have you been employed at your current job?
- How much is your current income?
- Do you have a credit card, and what is your net worth?
- How long have you lived at your current address?
Obtain a Pre-Approval
One of the best things that can happen before you purchase a boat is to get a pre-approval. This is a document coming from the lender that states their assurance to you on a certain loan amount should you push through with your application. We have a free online loan calculator to help you see what you need and how much of it to get your new boat.
When you get a pre-approved boat loan, you can go shopping for the boat of your dreams knowing you are guaranteed that money to buy it. This can provide you with the confidence to negotiate a bargain on the showroom. Aside from that, a pre-approval will let you prepare a budget, ensuring that you won’t be overspending when you purchase the boat.
Finally, a pre-approval can speed up the actual application for the boat loan. This is going to significantly lower the time it takes to process so you can be approved and on your way to buy the boat you desire.
Think About the Operating Costs
Whatever type of boat you plan to purchase, it’s always important that you consider the operating expenses to maintain it. The bigger cruisers can blow through your wallet – from mooring to its engine services – and for those that like travelling, lots and lots of fuel. A small boat won’t tie you down as much financially and can be easier to manage too.
This is why you need to consider carefully the type of boat you wish to purchase when signing your loan application. Besides the actual price, the operating costs will require a good chunk of money from you which can impact your financial capabilities in the coming years.
Give the Lender More Assurance
When you apply for a boat loan, your lender is going to take a look at your capacity to repay the amount you’ve borrowed. This is the reason why you need to give them evidence of your employment, having a consistent income, any bank savings and investments.
But to give your lender more assurance, you need to declare all other assets that you have like:
- A car title in your name
- A home equity
- Having a large deposit
- A relative that can commit to being your guarantor
These things can increase the chances of your boat loan getting approved but they also provide the lender more reason to give you an ideal interest rate.
Choose Either a New or a Somewhat Used Boat
When you apply for a boat loan, getting a new or almost new but used boat will improve your chances of getting that sweet approval. A lender would be more likely to sign the approval of a loan if they know you will be buying a new boat. They may even throw in a lower interest rate than usual.
If you decide to go with a second-hand vessel, be sure that it’s not older than five years so you have a better chance of getting approved.
Compare the Best Boat Loans
Try not to go with the lender that’s nearest to you. It’s important that you also shop around and compare boat loans to find the best deal for your needs.
There are many institutions that offer lending services in Australia today. Each one of them offers an ideal range of boat loan products that will suit your needs. However, you should avoid having several hits on your credit profile coming from different lenders in just a short time as this can look suspicious.
Furthermore, you need to look at the big picture. Don’t be seduced by the attractive rates that some lenders offer, but you should think about some factors when you choose a boat financing source. Things such as how long you intend to keep the boat, the terms and prepayment penalties. It’s important that you read the small print carefully!
Financing Your Boat Makes Sense
One of the main reasons people are getting boat finance is because it is more accessible and easier to do. There are marine lenders that offer competitive rates, fast decisions and trade-in offers. Many of them will even let you get marine accessories to be added in the loan amount. It’s essential that you ask about all these things before moving forward.
Aside from that, a boat can be used as a sort of “second home” if it has the space for it. You can store a lot of things and enjoy the vessel for various purposes.
Getting a boat loan can let you keep some cash and even in some cases, deduct the interest expense on the boat loan. You should however check the latter with your CPA prior to purchasing your boat.
Choose a Reliable Finance Broker
For you to have access to flexible boat financing products, it’s important that you get help from an expert loan broker like yes Loans. We can provide you with the best boat loan that you need to purchase the boat of your dreams. If you’re interested in learning more, visit our boat loan page now!
If you want to apply for online preapproval you can apply here.