Whether for business or personal use, purchasing a boat is not a walk in the park. Unless you are very rich and can afford to pay for that boat that you have always wanted in cash, chances are you will need to find an ideal financing solution. There are many ways to finance your boat purchase. You can approach the bank, a private lending institution, or other lending companies that specialize on boat financing. However, before you go out and talk to a lender, take some time to read through these pointers first, as they can help you be prepared to take a loan and guide you in making your decisions.
Know Your Financial Standing
Go through your accounts and see just how much you are willing to put out as down payment for your purchase. A huge initial cash out gives you a better chance to shorten the term of your loan or find one with lower monthly payments. Speaking of which, your monthly income should be enough to cover for these payments too. Another thing that you should check is your credit profile. If you have a good record, you can avail of lower interest rates and bigger loans. Therefore, you may want to clear up any outstanding debts you have.
Interest Rate vs. Payment Term
Most people think that a loan that has a low interest rate is always the best. This is not always true. Even if your interest rate is low but your loan term is long, you will still end up paying twice or thrice as much as the actual cost of your boat. Always keep a good balance between the two. Calculate what you will end up paying for by the end of the term. Choose a deal that works well with your financial standing.
If your documents are in order, you will be lucky to enjoy riding your boat in a day or two. Plenty of lending companies out there can process your loan immediately. However, those that offer lower rates, like banks, usually take longer in attending to your loan application because they have to do some background checks first. Still, there are lending institutions that specialize on boat financing, which also offer great deals and lets you enjoy your purchase in no time at all. Overall, to help make the processing faster, make sure that you have all your documents ready.
Get a Trusted Broker
As stated, there are plenty of lending institutions out there and sorting out through them to find the best deal can really take much out of your time. A good example is Finlease. There is also the probability that you can fall for a tricky deal despite your great effort to find the best boat finance. The best solution is to approach a broker. These brokers, especially those connected with the marine industry, know their job well and they already are in touch with a long line of lenders. Hence, they can easily find the best financing for your specific needs. Just tell them the details of your purchase and you can get a number of quotes from different lenders in no time at all.
Keeping these points in mind can help you in realizing your dream of owning a boat, for a price that is well within your means. As a final piece of advice, always remember to read the fine print in the contract before signing into a long-term commitment
The writer, Donna Smith, bought her new boat through a sound finance plan. She shares valuable advice when it comes to financing boats and equipment.
Image courtesy of Riva Boats