Finding the best rate on a boat loan is a straightforward process but there are a few key steps involved which require legwork on the part of the borrower. By understanding how securing a boat loan works, you can save time and money right away, while lowering the cost of the boat over the term of the loan.
Determine Boat Value
Before you ever apply for a boat loan, it is imperative you find the boat you want and determine the boat's value so you know how much to request in your application. In determining the boat's value, make sure to factor in the boat model and options, boat use, accessories, condition, fire extinguisher status, and age. You can form a good idea of the market value by evaluating the market price of other similar boats around the area or online. Keep in mind that market price is different from the seller's asking price.
Compare Listed Rates
After you determine the value of a boat, compare the generic loan rates for different lenders. These rates are flexible and will change based on the variables you present to the bank, such as the amount you are requesting and your credit history. Narrow this field of lenders down to the best rates based on your research.
Apply for Loans
After choosing your lenders, apply for a boat loan in person. It is important you talk to a representative at the lender directly to make sure they come up with a valuation similar to yours. Your loan rates will be determined by factors including the size of your loan, the type of seller you would be dealing with, your credit history, the duration of your loan, and your current income.
Choosing a Loan
Getting approved for a loan is exciting but you must make sure the terms are fair before agreeing. It is wise to wait to hear back from all lenders before accepting an approved loan. Be sure to evaluate all the terms of the loan before agreeing. Interest rates and monthly payments are only part of the equation. You should also consider any associated fees, the cumulative total of those fees, whether the interest rates are fixed or variable, and the total of the loan over its duration.
- Thinkstock/Comstock/Getty Images