Wednesday, May 23, 2012

Boat Finance

Tips on Boat Finance Basics

So you feel it's time to buy that boat you've always dreamed about? You've considered many types of boats to find that perfect one. You've checked out various retailers and boat shows, boat name brands, and sizes, but aren't sure how to proceed with the financial realm of buying a boat. Perhaps you don't have enough to pay cash and are considering a boat loan. Boat finance can be simple if you know how to do it and which company to work with. Let's explore some boat finance basics so you can soon realize your sailing dreams.

Boat loans can be issued in many ways, so it's wise to shop around a little before making a commitment. First, know the difference between mortgage loans, car loans, and boat loans. A boat loan can usually be stretched out over a similar period of time to a car loan - up to five perhaps seven years. A boat loan cannot normally be stretched as far as thirty or forty years such as a mortgage loan. So the payments may be similar to those of your car, depending on the initial purchase price and the boat loan interest rate.

Banks vs. Boat Loan Specialists

Choosing a lender can be another difficult decision. Some banks and credit unions might offer very attractive loan packages on boats, or they might even allow you to secure a personal loan, which usually requires no collateral. This will depend on your credit history and credit score as well as the bank's requirements for unsecured loans. On the other hand, a boat loan specialist may be able to work directly with you to get the best possible interest rate, the required insurance for your boat loan, and faster loan approval. Because the company specializes in boat finance, it may be able to offer more creative loan possibilities to meet your financial needs.

Shop around and ask your boat retailer if they already work with a boat loan specialist to provide financing for your purchase. You might be surprised at what they have to offer.

Also, beware of buying a used boat. Find out the age of the boat, how often it has been used, how long it has been parked without use, and whether it needs repairs. Boat repairs can be very expensive, so do your homework! Ask a boat repair specialist to check it out for you before buying. If you plan to finance a boat, you will likely get a better boat finance plan on a new boat, so be sure to weigh the differences before jumping in with both feet.

Hidden Costs of Boat Finance

Be sure to consider any hidden costs involved in boat finance. Within the loan or required by the lender, there will be interest, loan insurance, a title, possible closing costs, boat insurance, and taxes. Some lenders may require a down payment, which could range from 5 percent up to 20 percent, depending on your credit history. Also, consider other costs of owning a boat such as fuel, dockage fees, supplies, repairs, maintenance, a hauling trailer, storage for the boat, and an appropriate hauling vehicle. The larger the boat, the more expenses you will incur.

Determine how much you can afford before shopping around. Determine a set purchase amount and a set boat loan payment so you can be sure to stay within your budget. Stay budget-minded so you won't get carried away with an elaborate sales presentation while shopping!

You can easily go online to determine possible payments and interest rates using an online boat finance calculator. This will help you know what to expect when financing your boat. Shop around for the best deals on boat loans, interest rates, and payment plans to find one that suits your needs now and for the future. Smart shopping now can help you find the perfect boat - and boat loan - while minimizing the stress of this significant purchase!

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