PHOTO BY BOATUS
Before signing up for a boat loan, BoatUS recommends doing three things: “How loan rates work, how much of a boat loan you can afford, and your credit score,” says BoatUS Boat Finance Department Manager Rache’ Llerena. “We see these same three mistakes every day. Educating yourself and being candid about the numbers make you a wise consumer and may put you in a stronger position when seeking a boat loan.”
Here’s what you should find out before you apply for a boat loan:
1: Know how boat loan rates work. Fixed-rate, fixed-term, simple-interest loans are the most common. They have the same monthly payment for the life of the loan, typically from 10 to 20 years. Down payments from 10% to 20% are the norm. Generally, interest rates are lower and loan terms are longer for newer boats and larger loan amounts. However, each is dependent on a variety of factors including model year, loan amount and down payment. Be prepared for lenders to require larger down payments, charge higher rates and offer shorter terms on older boats, especially those over 20 model years.
2: Know how much you can afford. Estimate your monthly payments using the BoatUS online boat loan calculator. This tool is a good starting point in figuring out what is affordable, but remember your lender will look at your debt-to-income ratio and other criteria, which may change the amount.
3: Be an open book with your credit report. The closer the score to 700 or higher, the better the chances you’ll be approved. So before you apply for a loan, ensure your credit report is accurate. That goes for both applicants if two people are buying a boat together. To get your credit score, you’re going to have to go to your bank or financial institution. Also note that, depending on the bank, a credit report ding like a past bankruptcy or foreclosure may not preclude you from getting a loan.
To learn more, visit boatus.com/products-and-services/boat-loans.
