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Boat Loans

Many people dream of owning a boat and navigating the water ways for fun and adventure. However, before you can set sail, you will need to figure out how you are going to pay for the boat. For most of us, these means considering boat loans.

Loan repayment terms for boat loans:
Most lenders offer a choice of repayment terms for boat loans (5 year, 10 year and 15 year loan terms are usually offered). For more expensive boats, many lenders will stretch loan terms up to 20 years.

Interest rate for boat loans:
A borrower can either choose to get an interest rate that remains fixed for the entire term of the boat loan, or elect to get an adjustable interest rate. The introductory interest rate for adjustable rate loans will keep the payment lower initially for the loan, freeing up some money for the borrower to purchase enhancements for the newly acquired boat.

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Federal law requires that all creditors must state the cost of their credit in terms of an Annual Percentage Rate (APR). This rate takes into account how the loan is repaid on a yearly basis, and allows you to accurately compare the cost of credit among lenders. For example: You borrow $1000 for one year and pay a finance charge of $100. If you can keep the entire $1000 for the whole year and then repay $1100 at yearís end, you are paying an APR of 10 percent. But if you repay the $1000 and finance charge (a total of $1100) in twelve equal monthly installments, you donít really get to use $1000 for the whole year. In fact, you get to use less and less of that $1000 each month. In this case, the $100 finance charge amounts to an APR of 18 percent.

Fees for boat loans:
Lenders will charge the borrower fees for boat loans. While the exact amount in fees will vary by lender, the fees are usually charged as a percentage of the loan amount (points). For example, if you get a boat loan for $20,000 - a lender may charge you 1 point (which would be 1% of the $20,000 loan amount). This would result in fees of $200.

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The finance charge is the total dollar amount you pay to use credit. It includes interest costs and other costs, such as service charges and some credit-related insurance premiums. For example: Suppose you borrow $1000 for one year, and the interest is $100. If there is a service charge of $10, the finance charge will be $110.

Down payment requirements for boat loans:
Many lenders will want a borrower to put 10 - 20% down payment towards the boat. However, there are some lenders that will finance boat loans with 5% down or less.

Required items for getting boat loans:
Before lending you money for a boat loan, a lender will require you to pay for someone to survey the boat to make sure that it is in good enough shape to be adequate collateral for the boat loan.

If you are buying a used boat, a lender will want you to pay for a title search for the boat. This title search will determine if the prior owner had any liens put against the boat due to unpaid mechanics bills, docking fees, etc. If any such liens against the boat exist, you will have to pay the lien holders before the lender will offer you a boat loan.

Always contact a couple of lenders when shopping for boat loans. The interest rate and fees can vary widely by lender. Contacting more than one lender can help ensure that you are getting a competitive loan package and prevent you from paying thousands of extra dollars in interest charges.

You can find lenders for boat loans
by using the search function below.

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boat loans

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