Every year, 100 million Americans go boating. There’s nothing that beats the fresh ocean air, hot and bright sun, and clear blue skies. And it’s something you can do either alone or with loved ones!
If you don’t go boating often, then renting should suffice. But if you love going frequently and want to call yourself a boat owner, then purchasing can be a good route.
What can you do if you don’t have enough money to buy a boat outright though? Then financing is always an option!
Read on for some important dos and don’ts of financing a boat.
Don’t: Take Out Too Big a Loan
You might get approved for a larger loan than you’d expect. But that doesn’t mean you should max out your boat loan. Otherwise, you might drive yourself into huge debt.
As a general rule, you shouldn’t go over 20% of your total income for your monthly payments.
You should also note that boat ownership costs don’t stop with buying the new boat itself. You need to budget for maintenance, repairs, fuel, licensing, etc.
Do: Check With Different Banks and Credit Unions
Just because you bank with a certain institution doesn’t mean you have to stick with them for your boat loan. It’s true that most banks will give you a lower interest rate if you already bank with them. But it’s still a good idea to shop around to keep your options open.
You can even check with credit unions, especially if you have bad credit. They typically have lower interest rates than banks do.
Do: Read the Fine Print
You’d think that lenders would be happy if you repaid your loan faster than expected. But think again; many will penalize you for repayments made before the term’s over.
This is but one unexpected thing, so always read the fine print before you sign anything. That way, you can avoid nasty surprises.
Do: Make a Large Down Payment
We understand that you want to keep as much money in the bank as possible. But the larger the down payment, the better.
This is less money borrowed, which means less interest you need to pay back. In the long run, the money leaving your bank account will be less.
Do: Go for the Shortest Term Possible
Again, you want to avoid paying interest, and this can be done by opting for the shortest term possible. This, in combination with a large down payment, can get you better terms as well.
If you still have questions about getting a boat loan, then find more help here: https://www.freedomboatclub.com/learning-center/how-to-get-boat-financing.html.
Financing a Boat Isn’t as Hard as You Think
After reading this article, you might’ve realized that financing a boat isn’t as hard as you initially thought. You’re now one step closer to making your dream of being a boat owner a reality!
What you need to do now is explore your lender options. Take your time, and you’re sure to find one with favorable terms!
Keep reading our blog page for more posts on finances.