If you are thinking of buying a boat, it is quite easy, and most importantly, you can secure a new boat with a loan. Various lenders offer loans for buying new boats or refinancing an existing boat loan. You can get loans for pontoons, sailboats, powerboats as well as personal watercraft.
Options of Boat loans
- Getting a loan from the bank
Sometimes a buyer might opt for a second mortgage or home equity loan because they attract low interest or for tax reasons. This is advantageous if you have a lot of equity at home, but taking this route to secure a loan may take time.
- Arrange financing through a boat dealer
This is the best way of securing a boat loan since boat dealers are always setting up boat loans daily. You will have the advantage of working with someone aware of the ways around boat purchases and has relationships with banks. Dealers can make the deal happen quickly and also help you in getting insurance also.
- Get a loan with a marine financing lender
Boat financing is different from financing for other things, and as a result, some lenders specialize in marine loan financing. The National Marine Lenders Association has all the lenders that understand the finer details of boat loans.
How do you determine what you will pay per month?
Interestingly, there is a Boat Loan Calculator that you can use to calculate the monthly expenses for various loans. It is important to remember that other factors such as debt ratios, credit score, and your net worth might determine how much the lender is willing to loan and the term of the loan.
For most boat loans, the more the loan amount, the lower the interest rates, and as the loan goes down, so will the rates. If the amount borrowed is higher, then the term for the loan will be longer, and in most cases, it will be between four and 20 years. Lenders base the loan on a 10% to 20% down payment, but sometimes there are no-money-down deals.