Guide to Financing Your Boat

 If you’re considering purchasing a boat for the first time, but you’ve previously purchased a home or a car, you may be able to find comfort in knowing the processes have several similarities. Regardless of whether you’ve made one of these other big purchases, we’ve provided an all-inclusive guide with some tips for best boat loan financing company, so you can become familiar with and determine the best way to finance a boat.

As you begin to do your research on financing a boat, there are a couple of things you need to know up front, before we get into the specifics. If you’re in the midst of paying off a boat loan, but are in the market for another boat, you will need to pay off your current loan first — regardless of how good your credit score is. As a current boat owner who is still making payments, but may be ready for a newer model, you don’t have the luxury of buying before selling. You must finish selling your current boat before you will be able to secure financing for another boat. Of course, if you have a boat that is paid off, you’re free to buy and sell in whatever order you please.

Another thing to keep in mind is that if you’ve got your eye on an old boat, chances are financing won’t come easy. Financing options always vary from bank to bank, but overall, financing is much easier to find for boats that are within 15 model years. If you have your eye on an older yacht or another high-quality model, you may be able to make it work — but it ultimately depends on the lender.

Steps to Financing

How do you finance a boat? Before you jump on the latest financing rate you’ve seen advertised, there are a few things you need to do behind the scenes to prepare for financing.

If you’re interested in financing your boat, it’s safe to assume you can’t afford the lump sum it would take to buy it outright. But remember, you’ll still need a smaller lump sum in the form of a down payment. Have you considered what you can afford? Is there an amount you’d ideally like to spend? Or perhaps a number you know you can’t go above? Outline the specifics. Depending on the loan, you may be required to pay an amount somewhere between 10 to 20 percent of the loan amount.

Once you’ve gotten past the down payment calculation, consider the monthly payments you can afford to make. Yes, when you meet with lenders, they will approve you for a certain amount according to their loan terms, but that amount isn’t guaranteed to work with your monthly budget. Be sure to decide on an amount you can afford monthly before you begin shopping for loan offers.

Next, you need to check your credit score. Many credit card companies and financial institutions offer this service free of charge, so chances are it may be as simple as clicking a button from one of your online accounts. If that’s not the case, several websites offer free credit reports. Being aware of your credit score is important, as it has a significant impact on the financing and interest rates for which you will qualify.

Now it’s time to compare loan offers. That does not mean you merely see which advertisement includes the lowest rate. You may be wondering how many years you can finance a boat. Remember, read the fine print — you need to know if a lender requires a certain level of credit score, what period the loan is for and if there are any restrictions on the age of the boat.