Boat Financing Options
How to pay for your dream vessel
So, you have found the boat of your dreams. The only thing is that you do not know how to pay for it. Not a problem. This article will explain a few of the boat financing options which are available. Whether you are purchasing new or if you are wishing to finance a pre-owned boat, these options are generally available across the board. Here is what you need to know.
Credit Scores Matter
The first thing that you need to know when purchasing a boat for sale, is that your credit score matters. Even if you manage to find a financer for the boat who says “no credit, no problem”, you will find that the higher your credit score, the lower your interest rate will be. To find out your credit line, you could either go to a local bank and have them do a credit check, or you could use one of many free online sources to check your credit.
Should I go to a bank for a boat loan?
This greatly depends on the type of boat that you are wishing to purchase. If you intend to purchase a house boat, the bank may have a mortgage financing option available. Most banks do have specific loans for boats and higher dollar property, so long as the property is fully insured. Luxury Yachts, Cabin Cruisers, and pretty much anything that tops the 200k+ price range is usually an asset that the bank will look at. If a boat is below the 50k mark, then you may find that getting a loan is a bit more troublesome as (a) the bank will not do an extended loan on such a small amount, and (b) if the bank does loan on such a small amount it is apt to be a personal loan with a shorter pay back period and a higher interest.
For larger boats for sale a bank is a viable option. However, for skiffs, dual consoles, pontoons, and other smaller vessels (albeit that they may be 20 to 30’) this may not be the best option.
Financing through the seller
This is not the best option by any means. Usually, the payments on a for sale by owner financed boat are ridiculous. Also, the money is not insured and the agreements on how and when you pay are often very vague as the owners, for the most part, are not lawyers or bankers who have a thorough understanding of finances. They just want to sell their boat. It is recommended that if you need to work with a seller that you negotiate the price to something that you can afford and then work with a more reputable means of financing, for both parties’ sakes.
Could I use a credit Card?
Credit cards are an option for smaller boats, and if you have the line of credit I suppose larger vessels. However, think of this. If the interest is 29.9% and the APR on the card is 3.9% and you purchase a 150k boat on that card, maxing out the credit limit, it is quite likely that you will never be able to pay off your purchase. The payments would only cover the interest and a fraction of the principle. For the example above the if you paid 1,000 a month it would take you about 15 years to pay it off.
Use the site’s financing options
Perhaps the best way in which to finance your boat is through the loans tab on the boat selling site. Generally, these sites work hand in hand with the financial institutions listed in order to get you the best deal possible at the lowest interest rates. Again, your credit and your debt to income ratio will come into effect when looking at a loan, but the loans option tab should allow you to see a multitude of lenders in your area (sometimes globally) who are willing to finance your boat for sale at a monthly payment that you can afford.
Find a boat worth financing on Vessel Vendor
If you are seeking a pre-owned boat and need financing, Vessel Vendor has several financing options available for qualified buyers. Our site’s platform is designed to pair your interests and budget with listers who have a vessel that meets your needs.
Looking to sell a boat on vessel vendor? Great. Feel free to visit our articles on how to prepare your boat for listing to ensure that you get the most out of your target audience.
Should you have any questions about purchasing a boat for sale, financing options, or listing a boat for sale on Vessel Vendor, please fill out the appropriate form on our website and we will get back to you promptly.