The boat you fell in love with is absolutely perfect and you cannot wait to take it out on the water. There is just one hurdle standing between you and the water adventures of your dreams: you need to get a boat loan. If this is your first time seeking financing, you may be wondering, “Is getting a boat loan easy?”
It can be intimidating at first, but fortunately, the process for getting boat loans is relatively simple and easy. Once you learn a little bit about getting a loan, review your personal finance status, and consider what type of lender you want to choose, you are ready to go obtain your loan and buy a boat.
What Credit Score Do You Need For A Boat Loan?
Whether you choose credit unions, banks, or an online lender for your boat financing, keep in mind that credit scores are important indicators of your financial stability. When you apply, the prospective lender will run your credit score prior to extending an offer. The strength of your score will determine not only whether you are approved, but also whether you qualify for the most competitive rates or if you will have to settle for a higher interest rate and loan terms that are less favorable.
Minimum credit scores vary by lender and can increase with a higher loan amount, but, you are more likely to qualify for boat loans with decent interest rates if your credit score is at least 700.
What Kind Of Boat Loans Can I Get?
Both new boats and used boats can qualify for different types of loans. Lenders may offer you a secured loan or unsecured personal loan. If you have equity in your home, you could also consider a home equity line of credit. The majority of boat loans are secured loans. Unsecured loans are usually for loans under $25k, short term and sometimes at a higher rate.
Secured loans use the value of the boat as collateral, allowing lenders to repossess the vessel if the owner stops making payments. By allowing the purchase to be backed by the value of the boat, many owners can find more favorable finance offers with the best interest rates.
An unsecured personal loan option means that no assets are linked to the loan. Since lenders are accepting more risk with personal loans, you will likely get quoted higher rates and more conservative terms. The benefit is that you will also have greater flexibility in terms of where you can travel and how you can use a boat purchased with an unsecured loan.
A home equity loan uses your house as collateral for the boat purchase. If you default on payment, the creditor holding your loan can take your house. The upside is that you are likely to get the best rate for this type of loan compared to an unsecured loan, however it incurs more risk for you.
What To Do Next
Shop around and consider your options. If you want help, contact the marine financing experts at Azure Funding. We finance both new and used boats and can walk you through the process of getting a loan for the new boat of your dreams.
Click Here To Apply For A Boat Loan!
*All information in this post including, but not limited to, quotes, rates, term-length, and other loan information is purely informational and may not reflect your actual terms. Actual loan terms will be dependent on a number of actors including your personal credit history, assets, debt to income ratio, and more. Please speak with an Azure Funding representative today by clicking here to discuss your individual financial situation.