Finding a reputable bank that is willing to provide boat finance can be a very frustrating experience. You have to add more effort and do a lot of research on the available loans, go through the fine print to find the lowest interest rate loans. First of all you need to search widely for a boat that offers the best deal, whether new or used, depending on your taste and preferences. You then have to determine the total cost of the boat, leaving room for fluctuations so as to know the principal loan amount needed. You can strive to get a pre-lending letter which can jump start your boat acquisition process since boat dealers will rate how serious you are with it. It also adds some adrenaline to the process because the prospects of sale will bring any dealer to the negotiating table.
Next, you have to run a credit check on your self on a credit rating agency. Strong credit scores can help you obtain discounted interest rates from lenders. A good credit standing will also increase the pool of lending agencies who will want to deal with you because you somehow pose a lesser risk. It is therefore important to improve your credit rating by paying up loans and credit card debt before you run a check. Next is to compare loans from different lenders with their interest rates.
Scouring Online Lending Institutions
There is fierce competition in the lending sector, you can use the Internet to carry out research on these loans. In addition to interest rates, other important factors to consider are additional fees which are never stated upfront most of the time. This will help you know if you are getting a good loan. After finding a suitable loan, you need to carefully evaluate the lender offering them. It is advisable to call upfront and ask as many questions as possible before physically visiting them. On your visit, find out how much the required monthly payments will be, determine the length of time it will take you to fully pay off the loan. Boat finance loans with lower monthly repayment amounts end up taking longer periods to pay while those with higher monthly repayments are excruciating.
Getting a lender that will carefully balance the amount of monthly repayments with the total time to completely pay off the loan is of paramount importance. There are lots of on-line calculators that will help you determine this. It is advisable to use these calculators in case of any doubts as they will help you make an informed choice. It is also important to find a lender that will finance extra equipment and insurance. Since banks and credit unions rarely offer all inclusive boat finance, marine lenders remain as the best option.
When you are no longer skeptical of the process, you can now apply for the loan. The lender will require proof of your credit worthiness which is a guarantee that you can actually afford the loan. If you are employed, you will be required to submit tax returns for two years together with the schedules. For the self-employed, you should be ready to avail your business tax returns for scrutiny.
You are then required to produce a down payment, mostly 20%. This will depend on the age, model and price tag of the boat you want to purchase, in addition to this, your credit rating is also considered. For new boats, some manufactures may consider you for a reduced or no down payment at all on special offers. Some regions have boat tax and surcharges which is incorporated in the down payment. This works in your favor because the lending agency gains only a fraction of the down payment after deductions. This compels lenders to reduce interest rates for boat finance loans with down payments exceeding 40% of the total value. The total risk is reduced greatly as a result of higher down payments, this in turn leads to competitive interest rates.
By properly doing your homework, you stand a chance of getting a good boat finance loan, you can therefore rest assured that you will get that tantalizing boat that has always been in your dreams, in addition to this, you will end up saving a lot of money by getting the best rate.