About Boat Loan Rates
When it comes to boat loan interest rates, there are a lot of factors that come into play. From who you are getting the boat loan from all the way to your credit, it might surprise you just how much goes into determining your interest rate.
The first aspect of a boat loan interest rate is who you get the loan from. Because financial institutions can set their own interest rates, the interest on your boat loan could vary fairly significantly depending on who you go through. If you go through a bank or credit union that you do all your regular banking with, and have good credit, there is a strong chance you will get a lower rate than someone who is a first-time client of the same bank and has poor credit. If you have the ability, contacting a bank that you use regularly might be a good way to get the lowest boat loan interest rate possible.
The second aspect of a boat loan interest rate is your credit. If you have excellent credit, chances are lenders will be willing to give you a loan at a lower interest rate. As your credit decreases, your interest rate increases. For example, as of December 2016, if you were to go through a credit union for your boat loan, with excellent credit, a four year loan term for a boat loan less than $10,000, your loan rate would be around 6%. If you had poor credit, that same loan would have an interest rate around 12%. If you are looking to get a boat loan, but want as low an interest rate as possible, working on your credit is a good way to potentially get the lowest rate possible.
The third and fourth aspects of your boat loan interest rates go hand in hand. The loan amount and loan term both affect your interest rates, and typically the higher both are, the lower your interest rate will be. Depending on what lender you use, you can get a boat loan for all the way up into the millions, and repayment terms up to 30 years. This is not the norm, but it is possible. The lender you go through will have specific requirements for loan terms, whether it be two years or all the way up to 30.
The fifth aspect of your boat loan interest rate is the boat. Typically, interest rates are higher on older boats, and lower on newer ones. Also, things like the length, type, and whether it is new or used could potentially play a role. If your boat has a berth, galley, and head, the interest you pay might be eligible for tax deductions as it is considered a second home in the eyes of the IRS.
Another aspect is your down payment. The larger your down payment is, the less you will have to pay every month, and you might even get a lower interest rate.
When you are looking to take out a boat loan, there is a lot that goes into your interest rate. From who you take the loan out from, all the way to your credit to what type of boat it is, there are more factors than you would think.
Let Vessel Vendor help you take out your boat loan today!