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Like any other form of mortgage range, the procedure of taking Boat Loan, is very similar and attracts a lot of people with its low interest rates. Also referred to as Marine Finance, Boat Loan gives borrower various options of borrowing money like low-interest loans, short-term loans, long-term loans as well as financing options such as leasing, hire purchase and refinance. Marine Finance has a huge number of lenders including banks, building societies and brokers among others.
Types Of Boat Loans
There are various types of boat loans or marine finance. You can choose an Unsecured Marine Loan or a Secured Marine Loan. The range also varies from deferred repayments boat loan to low repayments and balloon repayments.
If what you are looking forward to buy is a small craft or a dinghy, the best thing for you is an unsecured marine loan. Why I am advising this is because it will give you something between 1,000 and 25,000, and even leave room for the purchase of few extra items such as sails and engines. But if you think your budget for the marine finance might exceed beyond 25,000, than I think Secured Marine Loan will best suit, as its upper limit is not fixed.
But, marine finance requires a security against loan, which can be the vessel that you are going to buy (that is the boat) rather than your other property. Boat loan has another advantage because it gives flexible terms of repayment. It can be deferred repayment for the initial three months or low start repayments for twelve or more months or can be balloon payment in which lump sum of capital repayment is deferred until the end of the term.
Check List For Credit Status
You must be prepared for the queries that financial institution will consider before providing marine finance. They will check if you have ever been filed for bankruptcy, if you own a house, what is your current income. They also needs proof of your job, say since how long you are associated with your current job, how long are you living at your current address, do you have a credit card, what is your net worth, and more. After confirming these proofs, the financial officer will ascertain your credit status and will determine the security over your boat loan, your current debt level, your income, and your ability to repay the debt.
Boat Loan: Low Rates That Keep You Balanced
Now days, the procedure for providing marine finance has become very fast and easy. Any bankers you visit will approve or disapprove the boat loan in less than an hour. So you donīt need to sit for hours together for the loan. In fact, many online financial websites with computer calculators determines repayment even before applying for the loan.
But one thing, which you should consider before going for the marine finance, is the construction of the boat. One may have difficultly finding insurance for a boat made of wood. Boats that are renovated recently cost less to insure. So you will have to find out when the last major electrical, heating and plumbing update was completed. Finally, if you maintain an automatic built-in fire extinguisher in the engine compartment, you can even save upto5%. Some boats equipped with basic accommodations like sleeping, cooking and toilet facilities can qualify as second home, making the boat loan as deductible as a mortgage on a conventional vacation home.
Period Of Loan
As far as period of boat loan is concerned, if you decide to take it from any private financial company, the time period is five year and it can either be paid fully or with a balloon payment at the end of up to 40%. Currently, the interest rate for marine finance is fixed at around 9-10 %. But redraw facility, home loan or property-secured debt can save you as much as 1.5 % interests per year.
Conclusion
Thus if you are interested in getting a boat loan you can go to a boat loan dealer who will search out the best deals available to fund your boat purchase, and at the same time will advise on alternatives of marine finance too.
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