Boat loans, refinancing and calculators

A boat purchase can be just as expensive, if not more expensive, than purchasing a home. It is important before purchasing a new boat for sale or used boats for sale that your financials are in order for a boat loan.

Use the following tools and resources to determine your boat loan eligibility, shop boat loan rates, and apply for a boat loan through a list of boat loan lenders available on Vessel Vendor.

Boat Lenders and Boat Loans
LOAN RATES
BOAT REFINANCING RATES
MORE ABOUT BOAT LOANS

 

BOAT LOAN CALCULATOR
BOAT AFFORDABILITY CALCULATOR
BOAT REFINANCING CALCULATOR
DEBT TO INCOME CALCULATOR

 

Boat Loans: The Pros and Cons

What you need to know about boat loans before you buy

Buying a boat is an expense, an expense which many cannot make without financing. Like any other major investment in your life, it requires that a responsible look at his or her finances and weighs the cost of their current debt to the debt they will acquire when purchasing and financing their vessel. Here are a few pros and cons of obtaining a boat loan.

Pro: Boat loans offer you payments instead of a bulk sum

The primarily reason why a person would wish to get a boat loan is so that the cost of the vessel can be distributed over a period of time. Typically, a boat loan is 15 to 20 years. Keep in mind that the boat is more apt to receive a loan if they are in the $50k and up price range. Banks want to make loans where they can receive capital from the interest of the payments. Additionally, the lower the cost of the boat the higher the depreciation of the boat (in most instances). No bank is going to give you a loan of a 15 foot angler that is 10 years old, there is no book value to the craft. However, if you are attempting to purchase a Midnight Express 2017 boat or a Chris Craft 2016 vessel, they are apt to finance the boat as the value of the boat is higher, the depreciation is lower, and the ROI for the bank is substantial.

Con: Interest on a loan is quite a bit

Loans of any kind acquire quite a bit of interest. While the payment is not so bad as getting a personal loan from a third-party business, boat loan interest tends to run at this time at 2.99% for those with excellent credit. While this sounds rather low (which it is compared to mortgage rates which are in 4% or higher margins at this writing) you would still end up paying a total of 65,966.56 in interest on a 200k boat.

Pro: Boats add equity to your portfolio

Those who are concerned with their equity and assets will find that certain boats will add a higher value to their portfolio. Keep in mind that that the equity of the boat will be weighed against the outstanding debt on the craft in cost cases. Keep in mind that your credit and your current assets will be the main factor of your equity and worth. However, taking on a Nort-Tech, SeaHunter, or Hydra-Sport is sure to boost your portfolio’s worth.

Con: Credit

Credit, that dreaded word which drives the financing world. Like many lenders, boat lenders will check your credit and adjust your payment and interest rate according to your credit score. Even if you have perfect credit, if you have shopped around for a boat and have attempted to get a loan from various lenders, it will show multiple credit inquires (which is not a good thing).

The best practice is to get a pre-approval letter for financing from a bank or boat lender and then go shopping, not the other way. This will minimize the inquires on your credit score and help keep it in good standing.

A 50/50 : Requirements

Depending on the boat lender that you choose, there is a possibility that you will be required to have certain documentation, insurance, and care set in place before the loan will be accepted. While some may find this as a negative, I would venture to say that it is a positive in some respects. By forcing a person to have full coverage on the craft, and by factoring in the cost into the loan a person does not go with the cheapest insurance and find themselves holding the short end of the rope in an emergency. That being stated, the full boat insurance is a cost.

Final consideration: Its your boat….sort of

As with any loan, if you have a financial lender, the title will remain in the possession of the lender until the boat is paid off. This may limit your ability to use the craft in some waters. Obviously, the lender will want to ensure that you will not just take the boat and go to another state, international waters, etc. Additionally, a lender can (read that fine print) call in the loan in full if they find that (a) you are not meeting the payment requirements which were set forth in the contract (b) you are misusing the vessel and depreciating the value of the craft, thereby reducing the potential for ROI or (c) if you fail to maintain the proper insurance and documentation on the vessel.

Find a boat lender

If you are needing financial assistance in the purchase of your boat, it is strongly advised that you use a boat lender as well as seek the legal advice of a lending attorney. Vessel Vendor has a selection of professional boat lenders offering their services. Please look at our service page to find information on boat lenders. Should you have general inquires about boat lending services please contact Vessel Vendor through the site. Specific Loan questions and financial disclosures should be discussed between your lender and your lending attorney.

Learn more about boat loans