Boat Loan Guide
Most people don’t have enough money lying around to just go out and purchase a boat on a whim, so the vast majority of boat buyers take out some kind of loan on their vessel. Of course, navigating the world of boat financing can be more treacherous than a stormy sea. That’s why the experts at Arrowhead Yacht Club & Marina have created this boat loan guide.
Loan Types
Boat loans are installment loans, meaning that they are repaid via fixed monthly payments over a period of several years. The amount of interest paid is determined by several factors, including the size of the loan, your income, your credit score, and whether the loan is secured or unsecured. Secured loans use the boat as collateral, meaning that it can be repossessed if you fail to make your payments. Since these loans are a bit safer for the lender, secured loans tend to have lower rates and longer repayment terms. With an unsecured loan, your boat cannot be repossessed. However, these types of loans tend to have higher rates and shorter terms since they’re seen as riskier. While missing a payment won’t likely result in your boat being repossessed, other consequences such as wage garnishment or a lawsuit may occur instead.
Places to Find a Loan
Many different institutions offer boat loans. While banks don’t require that you have an account with them in order to take out a loan, interest rates are usually lower if you do have an account. Banks offer a variety of different loan types, so do some research. Credit unions are another popular option. Credit unions are a great choice for those with poor credit since they’re non-profit. However, credit unions only offer secured loans. Finally, there are marine lending specialists. They tend to offer similar terms as banks and credit unions, with the added bonus that they have a lot of experience dealing with the boat industry.
Some Things to Consider
Before you take out a loan, do the math to make sure that you can afford the loan’s monthly payments. Don’t forget to factor in the interest, which will build up over time. As a general rule, you don’t want your boat payment to be more than 20% of your monthly income. It’s also important to remember that there are other costs associated with buying a boat. Fuel costs, licensing/registration fees, insurance, maintenance/repairs, supplies, and boat storage fees should all factor into your decision.
Above all, peruse your loan terms carefully and be certain that you understand all of your obligations before you sign on the dotted line.
For more about boat loans, or to see our inventory of boats, visit Arrowhead Yacht Club & Marina. Our dealership in Ketchum, Oklahoma offers convenient access to customers living in the state of Arizona. We also offer marina services, parts ordering, and servicing.