Are you thinking about buying a boat? If you are then you could need a boat loan to get the money you need when you need it.
A boat loan, as the name implies, is a loan where you intend to use the money to buy (or lease) a boat. These kind of loans can help you live your dream of owning a boat. You can use your new boat for any purpose too. Whether you want it for business, pleasure, or both. There are a number of different boat loans on the market and each of them comes with different rates and borrowing amounts. It can be a little confusing but it’s definitely good to have so many options.
How Do Boat Loans Work?
Boat loans are just like any other loan. The difference is that you use the money to buy a boat. When you take out a boat loan you can usually choose between taking out a secure loan or an unsecured loan. When you take out a secured loan it means that you offer something you own as security. If you default on the loan you will lose this security. If you take out an unsecured loan then there is no security involved but there are disadvantages such as harsher loan rates.
Because boats are usually expensive the terms on a boat loan are longer than they would be with a regular loan. Boat loans will also come with either a fixed rate interest or a variable interest rate so go with the loan that fits your needs.
How to Compare Boat Loans
What is the interest rate?
The interest rate on a loan can vary from provider to provider. Generally though boat loan interest rates are usually low. Always go for a loan that comes with a competitive rate. It’s how you save money over time.
Are the repayments fixed?
There are boat loans that come with fixed repayments. When you take out a boat loan you need to consider whether you would prefer fixed repayments or variable repayments. Going with a variable rate is a bit of gamble as you can end up paying back more, as well as less.
What are the Limits on the Loan?
The loan limit is something else that varies from provider to provider. Do a little research beforehand so you have an idea of how much money you need to borrow and then find a loan that lets you borrow that amount at a reasonable rate. You should also consider the minimum loan amount. Never borrow more money than you can reasonably repay or you can default on the loan.
How long are the loan terms?
The loan term tends to be longer with a boat loan but you should still select a loan where you will have the time you need to properly pay off the debt. Do a little maths and work out how long you will need to pay the loan and go with a loan that fits your circumstances.
Will the loan be secured or unsecured?
A boat loan could be either secured or unsecured. Think about which one is right for you and then go with the loan that best fits your needs.
The pros and cons of a boat loan
Quick access to extra cash: Getting a boat loan is the easiest way to get the money you need, but otherwise wouldn’t have, to purchase a boat. There are lenders who specialise in boat loans that will be able to advise you about the kind of loan you need.
You can be approved for the boat loan quickly: A boat loan usually comes with a quick turnaround time so you receive approval not long after filing the online application form. It’s easy to work through your application and you can have the money in no time. There are also loan providers that offer automatic approval so you can be approved before you know it.
Competitive interest rates: Most boat loan lenders will offer competitive interest rates. The interest rates on a boat loan are typically lower than with other credit options. If you have a boat in mind and know the money will definitely go towards a boat then a loan suited to that can save you money in the long run.
What to Avoid When it Comes to Boat Loans
Avoid unlicensed credit providers: You should never get a loan from an unlicensed provider. It’s just asking for trouble. You lender has to be registered with the ASIC. You can access the ASIC website to ensure that a particular lender is registered with them.
Avoid debt spirals: It’s all too easy to rely on credit and find yourself stuck in debt. It’s even more likely if you take out more than one loan and use different providers. You should always know your limits and find help when you need it. If you have trouble paying back your loan then there are options available.
Applying for a Boat Loan
Start out by comparing the different boat loans on offer. Find the best loan for your situation and the one that appeals the most to you. If you’re interested in a low interest rate then find a good loan with a low interest rate. You can then just click to be taken to the online form and apply for the loan when you find it.
If you’re interested in getting a boat loan you’ll need to be over 18 years of age at the least. In most cases you will also need to have a good credit rating and have bank statements or employment details at hand to prove you can afford to pay back the loan. If you’ve got everything you need you’ll find the application process quick and easy.