Its fairly common for customers to opt for a fixed rate loan
Dont settle for a less than ideal situation and make sure that the boat you are purchasing is right for you.
Be Sure to Look Around
As mentioned, you should definitely do your homework if you are buying a used boat. Some people get desperate when looking for a boat and then pay too much for what they really need.
You should use a guide to research the value of certain boats and do even more homework to see if thats a fair value for the local area that youre in.
While it may not seem to make much of a difference, prices can vary higher or lower depending on your zip code and where you are located.
Regardless of if you are buying a used boat or a new boat, you should also figure out which of the above financing paths will work best for you.
You want to get yourself the best rate possible as well as a boat loan that is agreeable when it comes to the years and the payments for your individual situation.
You need to make a purchase that has a monthly payment that will work with your budget, and there are many calculators online that can help you do that.
Types of Boat Loans
The rate of your boat loan will depend on different things like your credit score, the size of the loan, and whether your boat is new or not.
If you have a large loan with a term http://www.paydayloansarizona.net/ length of 15 or 20 years, you will probably be expected to pay around 5-7%.
The bigger the loan that you are taking out, the more you should expect that it will be a longer-term loan. If you try to cut down the time, be prepared for a much higher monthly payment.
A reasonable down payment for a boat loan like this would be around 15-20% and may be required by many banks and dealership finance programs.
Fixed Rate Boat Loans
They want to add a level of predictability to their loan and that makes this much more popular for most buyers.
Adjustable Rate Boat Loans
If you want to be a bit more open to some risk, you may be more interested in an adjustable-rate boat loan. This is for consumers who are more confident that they can deal with the differences in interest rates over time.
Regardless of what loan you get, you should check the terms and think about your future as opposed to the deal in “present” terms.
Boat Loan Alternatives
Some people look for a boat loan but may have less than ideal credit or simply may be looking for other methods to finance a boat purchase.
Home Equity Loans
This is a loan that is secured by an asset (your home) which will help you secure a more competitive rate.
Most of these loans will be in the 5-6% range as of the time of this writing, and these rates will usually be fixed. Obviously, the risk here is that you are digging into the equity of your home for a purchase that is basically “non-essential”.
You need to be very confident that you can pay this debt or you risk losing your home for something that you didnt really need. Fees can get aggressive in this environment if you start to have problems.
Most home equity loans will be available for 5-15 years but they can also be stretched out to 20 years as well. Most home equity loans will require a pretty solid credit rating so you should keep that in mind.
