Owning a new boat is exciting, but figuring out how to finance a boat? Not so much. If you are worried and wondering what you need to do to get a boat loan or how hard it is to qualify for a boat loan, take a deep breath. It is not very hard to finance a boat if you prepare and do your homework. Below you will find what you will need to know before you shop around for a lender:
How To Finance A Boat
You have options when you are financing a boat. Depending on your situation you may be able to choose secured loans, unsecured personal loans, or home equity lines of credit to fund your loan amount.
Consider whether you are comfortable having the vessel attached to the loan as is the case with a secured loan or to have your house on the line with a home equity method of payment. On the flip side, you could opt for the personal loan, but understand that you will likely pay higher interest rates since the lender is taking on increased risk by accepting terms with no collateral.
What Credit Score Is Needed For A Boat Loan?
If you are wondering, “Can I get a boat loan with a 650-credit score?”, the answer is yes, but most boat loans are offered to applicants with credit scores of at least 700. That does not mean that those without excellent credit are guaranteed to be turned away, however.
While lenders do not always require a down payment from a high score individual, they may consider extending financing to someone with a lower score if you can make a significant down payment or if you opt for a secured loan versus an unsecured one.
Another variable is the loan terms. When lenders extend offers for boat purchase loans, the interest rate, loan term, and monthly payments are more favorable to those with a better score. You can use an online loan calculator to help you compare potential offers and terms.
What Type Of Boat Qualifies For A Loan?
As you are out strolling the docks, make sure you consider whether you want a new or used boat. Both new boats and used boats can qualify for boat loans, but when you are buying a boat, it may be easier to get a boat loan on something 5 years or newer.
Given the same purchase price or loan amounts, the bank would rather finance a newer vessel because it is less likely to have hidden issues and damage that might negatively impact market value.
If you fall in love with an older boat, you can certainly still apply for loans, just keep in mind that the bank could require a marine survey and that interest rates and payments on these loans can be higher. If the boat is more than 20 years old, some lenders will not be willing to making a financing offer at all.
Where To Apply For A Boat Loan
When you are ready to buy a boat, Azure Funding is here to help you apply for boat loans and find the financial arrangement that works best for you. Connect with one of our representatives today to get started.
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.