In our previous articles we talked about how the boat loan works and what things you should consider for the same. We discussed that the loan amount varies depending on the credit scores, your net worth, your assets in case of repayments, and your previous history with such settlements. We also discussed the interest rates applied on boat loans depending on the term plans and how long you can stretch the loan period. Today, in this article we will be focusing on what are the lending criterias of Boat loan and how to smoothen the process.
Lending Climate – Testing the waters
One must consider the fact that the interest rates have gone down since 2016, so you can expect loans at a low interest rate of about 5% to 7%. The down payment requirements depend on factors like the type of the boat, it’s price, it’s age and your credit profile.
So, generally you can expect 15-20% of the down payment on your boat finance.
For larger boats like multi-hulls or houseboats, you can expect a larger down payment. There is a possibility that you can expect zero-down payments on the same but that would require special lenders and particularly a good borrower profile, though it will lead you to higher monthly repayments to the lender.
The duration of new boat finance is about a week, however refinance or financing a pre-used boat takes a longer duration. Try to process your boat finance with a lender who is familiar with the marine industry to speed up the process , rather than approaching a personal bank.
Quick Tips To Smoothen the Process
Did you know that a loan borrower can pay cash to get the boat immediately and opt to finance later? Also that the tax deductions are possible for boat loans?
Well yeah, as long as your ship has a bed, a bathroom and a gallery, it qualifies as a second home and that can help you deduct the interest on your federal tax returns.
You can also put a boat into a family trust, though you may have to add the additional cost (mostly attorney fees), or even put it into a single asset limited liability corps., if the boat is for personal use. This can give you some sweet tax advantages, particularly when selling the boat.
Well this looks easy and smooth, so why the wait? Check out for the best lenders suiting your requirement and go for it.