In the past, when sailing was not as popular as it is today, it was much more difficult to find a person or organization that would provide you with a boat loan. Nowadays, the condition is the opposite, and the buyer’s predicament is to find the right company to obtain a boat loan. There are generally three main sources from which you can acquire a boat loan; your bank, your credit association as well as financial services institutes, also recognized as specialists in maritime loans.
In the same way, there are 3 common types of loans that are presented to people who want to acquire boats on a loan. One of these is the “fixed rate, fixed term” type of loan that has a uniform monthly payment that is required throughout the loan period. “Variable rate” loans do not contain a fixed loan rate. The rate varies with distinctive rate indices. To give an accurate understanding of this type of loan, the adjustable duration should be noted. Balloon payment loans are fully paid at the end of the loan period.
Many new or used boat dealers employ their own financial supervisor to handle boat loan management. These supervisors take into account things like the submission of the application form and the things that need to be done to finalize the deal on behalf of the buyer. Many dealers are associated with the National Association of Marine Bankers, a union of marine lending professionals. When applying for a boat loan, be sure to indicate that you want to deal with the National Association of Marine Bankers. By doing it this way, you can get additional discounts on transaction fees.
Also, getting your boat financed by a reputable dealer can also be to your advantage. First of all, such distributors usually have contacts with various funding sources. Not only will there be a great chance that you will be able to get your loan, but you will also have the opportunity to decide which source you want to get. Such dealers may also provide manufacturer warranties for specific items. This will greatly protect the finances of your boat. Also due to their connection with boat manufacturers, dealers can offer you discount outlets for specific makes as well as models. These points of sale can be “delayed initial payment”, “no interest for several months” or reduced prices for a certain period.
The filing method can vary among numerous lenders. Lenders can accept loan applications over the phone or through a completed application. Whether it is by phone or not depends on the amount of the boat loan requested. The higher the amount, the more details you have to remember. High loan levels require that each item be written in black and white on a complete application. In the event that a credit investigation is required for the level of the boat finance loan, the applicant may be required to provide tax returns for a specific number of recent tax years in addition to the personal income statement.
Information about credit worthiness is important when it comes to determining the correct size that can be provided to you as a boat investment loan.
Before you submit your application form for a boat loan, you should certainly have definitely decided on the boat you want to get boat financing for. Some information about the boat such as the year, make and model, additional equipment and upgrades, all sums are included in the calculation of the absolute value or cost of the boat. Additional important information that you should be ready to give the lender is as follows:
(1) the purchase price of the boat,
(2) additional accessories you are deciding to install,
(3) tax expenses as well as
(4) documentary loads.
By linking to the boat financing application, you allow the loan company to examine your credit standing. This is called the loan underwriting method. These methods will include looking at your individual creditworthiness as well as the actual value of the vessel to be invested. Your credit will be determined, as well as your debt-to-income ratio. The actual market rate for the boat you want will then be researched by researching other boat sources and obtaining the current average price for the particular model and make.
Once all of the above has been done, and if the results are favorable for the loan of the boat, then the contract will be settled and you will claim the boat. For additional security measures on the part of the borrower and the lender, the entire loan transaction may be provided to an escrow service to reduce the possibility of fraud.
