Maybe you’ve always wanted to own a boat. Maybe you already have a boat, but you’d like to upgrade to a new one. Either way, you may not be able to afford the boat of your dreams. This doesn’t necessarily mean that you are out of luck, just because you don’t have the cash on hand. If you don’t have the cash, you can apply for a boat loan. Many companies offer boat loans to help people to make their dream boat ownership a reality.
Companies who offer boat loans will obviously want to check your credit. Before you apply for a boat loan it would be a good idea if you got a copy of your credit report. It’s suggested that you get your credit report from more than one credit reporting agency. This will allow you to clear up any mistakes that may be on your credit report, and could potentially cause you to not get your boat loan.
It will also help you to better understand why the loan company is offering you a particular rate. For example, if you have bad to medium credit your rate won’t be as good as someone who has excellent credit. If you do have excellent credit, don’t be afraid to let the loan company know that you know what your credit score is. You can usually negotiate for lower rates when you have an excellent credit score.
Boat loans are typically offered by the following institutions:
Specialty Loan Companies
The three most common boat loans issued are below:
Fixed rate boat loan-This is probably the most common and popular type of loan. Your loan and your interest rate will be calculated. You will agree to pay the loan back within a certain time frame, such as 5 years. You will have to pay a minimum amount every month, until the loan is repaid. The rate you agreed to pay will never change.
Variable rate boat loan-When you agree to take a loan on variable rate, your rate may change due to certain factors. One of the main ones being the prime interest rate. Usually lenders will offer an initial low rate. However, that rate can quickly go up. It is best to try and avoid this type of boat loan if at all possible.
Balloon boat loan-A balloon payment loan is one where the balance of the loan isn’t due until the end of the agreed term of the loan. For example, if you take out a balloon payment loan for 5 years, after 5 years the loan must be paid in full. Within that 5 years, periodic interest payments will usually have to be paid.
People who don’t have the upfront cash regularly rely on boat loans to enable them to get their boat. Make sure that you check your credit score before you try to procure a boat loan. It may help you to clear up any mistakes on your credit report and can help you negotiate for a better loan rate. There are many providers of boat loans, so don’t feel pressured to go with any one particular lender, shop around until you get the best rate and payment terms.