Boat Loans: Search Out the Best Boat Loan Rates

April 25, 2012 by  Filed under: Loans 

Starting the process of arranging a boat loan is often confusing, so it is helpful to know how the actual process of financing a high-valued motorboat, sailboat, or PWC works.

Prior to purchasing a vessel, be realistic with the amount, period (typically 15 or 20 years) and the monthly payments, making certain that a loan is tailored to fit the individual finances. Remember, the actual cost of taking on a boat is a lot higher than just the monthly payments. Other expense often associated with owning a boat include on-going maintenance, insurance costs (mandatory if purchasing a boat on finance), safety equipment, mooring or storage costs, potential taxes, etc.

In a highly active boat market, it is possible to find multiple sources for financing a watercraft, so it is worthwhile taking the time and effort to comparison shop to compare a variety of terms, conditions, and rates to establish a package best suited to the individual circumstances. Interest rates differ for a number of reasons, which include a buyer’s credit history, potential down payment, state of residence, and other related variables. Calling several general or specialized brokers helps with feeling out the marketplace; this also helps in determining the potential loan interest rates.

The three main choices of boat loan programs consist of –

• Fixed rate – a simple fixed-term and interest rate period.

• Variable Rate – a changeable rate of interest that floats based on a particular interest rate index.

• Balloon Payment Loans – entire balance of loan due after a fixed term.

Before signing up to a particular type of loan, a broker or marine finance specialist is required to go through the complete loan package to make certain the borrower is aware of the commitment to be made. Be certain to ask all related questions regarding the different classes of finance packages to guarantee its most tailored to your own private finance profile. A finance specialist dealing with marina loans on a regular basis is often able to get the better deals through their direct association with regional and community banks.

A sizable down payment, at 10 to 25%, is often a requirement of taking out a new loan. Some of the 20-year loan packages often call on a down payment at the maximum 25%, and due to the on-going financial conditions, loan deposits have become a lot higher at the present time, than previously.

Obtaining a pre-approved loan also helps when it comes to purchasing a boat – a loan in place increases a prospective boat owners buying power, and makes certain a boat dealership or private owner knows you are a serious buyer.

Arran James writes articles, reviews and product reports on a wide variety of boating focused topics, including those related taking on a new or second-hand Boat for Sale and the availability of Boat Auctions

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