Whether you are considering buying your very first boat or you are a seasoned boat owner interested in upgrading to a different model, you likely will need to obtain financing for your purchase. Some boats, and particularly smaller, used boats, may be affordable enough for you to scrounge up the cash and buy it outright. Yet with attractive interest rates and long terms available on boat loans, often even those who have the cash available to buy a boat outright will opt to finance it and keep their cash in their own bank account for a rainy day.
You Always Wanted A Boat? Here’s How You Can Get It
Determine Your Budget
Before you get your heart set on a specific boat, you will want to take some time to establish a budget for boat ownership. There are many different costs associated with owning a boat. Of course, there is the monthly payment associated with your boat loan payment. You will want to set aside some cash in your budget for gas, boat insurance, and general maintenance costs, too. Then you will want to consider how you will store your boat. Boat slips at a marina generally are available for a monthly fee, and if you choose to store your boat off the water in a boat storage yard, there are fees for renting this space as well. You can use these calculations to determine a monthly boat payment you can realistically afford.
Shopping for Rates and Terms
Boat loan rates are determine in a similar fashion as car finance options. New models receive a different rate than used models, and the available term may vary as well. So when shopping for rates and terms, it is a good idea to have a general idea of the price range and age of the boat you want to buy. You may have already done some preliminary shopping and have a few models in mind. Keep in mind that terms on boat loans may be stretched out for ten or twenty years in many cases, and so you may be able to afford a larger or nicer boat than you initially thought. You can use an online price comparison site to more easily find lenders offering the most attractive rates.
Getting Pre-Qualified
Some boats stay on the market for several months while others are snatched up quickly. The last thing you want is to fall in love with your dream boat, and then learn that while you were applying for financing someone else already bought it. While you do need to have a general idea as to the loan amount and age of the boat you are interested in buying in order to get pre-qualified, these details can be adjusted later if needed. You can take the time to fill out a loan application, submit your necessary loan documentation to the lender, and more up-front. Then, with a pre-qualification letter in hand, you can enjoy a less stressful boat shopping experience. Many boat sellers will take their boat off the market if you have a pre-qualification letter in hand and provide a good faith deposit to them while you iron out the last of the financing details with your lender.
Buying a boat may be one of the best things you have done for yourself in years. It provides you with the ability to enjoy your own private oasis on the water for rest and relaxation, recreation, or perhaps a bit of both. Following these steps can help to ensure you have an easier time buying your dream boat.