A boat may not be the biggest investment you are ever going to have, but it certainly isn’t the smallest one. Prices may vary depending on the type of boat you want to purchase. The average cost is somewhere between $60,000 to $75,000. 

As you can see, it’s far from cost-effective and requires a lot of financial planning, unless you’ve already managed to set some money aside. Besides, don’t forget that you also need to have some cash intended for insurance, fuel expenses, and maintenance.

Now, if you are one hundred percent sure that buying a boat is something that must happen, yet you are looking for some great financing options, then you’ve come to the right place, because today, we will tell you exactly what’s worth considering.

Good Financing Options To Take Into Account When Acquiring A Boat

Let’s Start With Boat Loan

As stated in the beginning, acquiring a boat is not very cheap, hence it would be advisable to get yourself familiar with your financing alternatives before you take any further steps. If you’re considering any of the marine financing options, then you need to find a lender who is going to provide you with premier quality boat financing. Make sure to first schedule a consultation with a lender first to see what needs to be done to go through this process swimmingly.

First and foremost, there’s a pre-approval boat loan process. In order to secure a boat loan, you need to have several things prepared while filling out the forms. This normally involves proof of identity, current tax forms, and current debt to income ratio, such as student mortgages and/or loans.

Bear in mind, that your credit score is supposed to be 680 and above. Now, before you apply for a pre-approved boat loan, you should focus on raising your credit score. You can do so by requesting a copy of your score just to be sure there aren’t any discrepancies, current debts, or applying for a credit card.

Moving On To Application

During this process, you need to prepare a couple of things as well. You will most likely need information concerning your employment, along with a personal financial statement with liabilities and assets. Once you’ve applied for it, you will typically wait for one week to get a response from the lender.

Adding More Useful Information Below

Different Types Of Boat Loans

There are several options at your disposal in terms of financing your vessel and they include the following:

• Secured loans – these require you to put up collateral so you can secure its repayment. When it comes to the boat loan, you would have to put the vessel up as collateral, which means that your lender could repossess it if you do not make payments on time. A great thing about these types of loans is the fact that they usually come with lower interest rates and higher lender limits because there aren’t a lot of risks involved for the lender. Just keep in mind, that you might lose your boat if you are irresponsible.
• Unsecured loans – these normally do not require any collateral, meaning that you are not going to lose any of your physical belongings when you sign up for them. On the other hand, these loans have high-interest rates and lower borrowing limits, particularly if your credit score is not admirable. Generally speaking, unsecured loans are ideal for those with a great credit score.
• Second Mortgage – Borrowing cash on a personal loan isn’t the best possible option for everybody. Instead, a home equity loan can offer you the money you can use to purchase the boat. This type of loan is also perceived as a second mortgage. But how does it work? Instead of your vessel being utilized as collateral for the purchase, your house will be employed as collateral. Due to the fact that the risk is lower for the lender, interest rates are going to be much lower in comparison to personal loans. Just remember, that if you do not make payments on time, the lender has the right to put a lien on your property.

Where Can You Get A Boat Loan?

When it comes to this, you have a couple of options available, such as traditional banks, online lenders, and credit unions. But before you select a lender, it would be advisable to compare the top boat loan lenders to see which one is most suitable for you.

As you can see, there are a bunch of great options when it comes to purchasing a boat, however, before you make any decision, just make sure to go through everything that’s been mentioned here to avoid making any mistakes.

Published by HOLR Magazine.