Imagine you are relaxing at Myrtle Beach on your boat living your “live in the sunshine, swim in the sea, drink the wild air” dream, but then the realization hits you, you are not living your dream, but rather you are sitting at your home thinking of going on a boat trip, but you don’t have a boat.
And then your next thoughts consist of owning a boat. But aren’t boats too costly?
Yes, they are, but you know what, you can apply for a boat loan and make your boat trip come true. But there are certain questions you must ask yourself before signing for a boat loan. Without further ado, let’s dive into the topic and start with our questions.
What Is Your Credit Score?
Starting with the typical question for any kind of loan,” What is your credit score?” Before you take any further steps to apply for a boat loan, it is best to check your credit score first.
Boat loan connoisseurs at SeaDreamInc.com want to remind you that a vast majority of lenders demand a credit score that’s at least 700. Of course, the higher, the better.
But what if your credit score isn’t high enough? Don’t fret! There are a lot of lenders who focus on subprime loans and are willing to give them to the borrowers. But, you need to check if that’s the situation with the lender you picked before you sign anything.
DO YOU KNOW?
As of 2024, the global recreational boat market is worth USD 38.5 billion and is expected to reach around USD 65.6 billion by the end of 2033.
What Is The Size Of The Down Payment?
This question cannot be answered with one certain answer, down payment of loans depends on various factors including,
- The size of the loan that you’ll be applying for
- Whether the boat you will purchase is new or not
- Your current financial situation
- The amount of extras baked into the loan
For example, if you are planning to get a new boat and need a loan that’s below $100,000, you’ll need to pay at least ten percent of the total for the down payment. On the other hand, boats that are worth more than $100,000 usually require twenty percent down.
What Are The Most Common Misconceptions Concerning Boat Loans?
Things have drastically changed in the past couple of years when it comes to boat loans. Back in the day, it was almost impossible to stumble upon a lender who was willing to stretch the loan for a very long period of time (for instance, ten years or more). How come? Well, that’s because the rate of devaluation of boats used to be extremely fast, meaning that they weren’t capable of serving you in the long run.
However, as concluded previously, over time, things have changed for the better, and these days, you can easily hunt down a boat that’s durable and that generally has an excellent lifespan.
This major change is one of the reasons why most loan recipients do not have any problem borrowing money because they are positive that the boats will retain their value even after many years.
Aside from this, there’s another misconception worth mentioning.
Many people believe that there are no money-down loans. Many years ago, a twenty or thirty-percent down payment was obligatory for everyone who wanted to acquire a new boat, which is why a significant percentage of people today are still convinced that the situation is still the same.
Well, that’s actually not the truth. These days, you can find several lenders ready to work with either no money down or much lower down payments.
TRIVIA
Houseboats are unique floating houses that allow a lifestyle on the water. Some places like Lake Powell and the Chesapeake Bay are famous for their vibrant houseboat communities.
How Much Money Are You Allowed To Spend On The Boat?
This is definitely something that only you can answer, because, at the end of the day, no one knows your financial situation better than you, right? Bear in mind that boat loans aren’t something you should take lightly, meaning that it’s more than advisable to determine your budget before you dive deeper into this endeavor.
First and foremost, you need to see how much you can put down and the amount of money (intended for a monthly payment) that’s most suitable for you, for the time being. All these factors may seemingly look “irrelevant”, however, they can be of massive help if you decide to proceed with your idea.
Now, if you want to plan your budget the right way and ensure you do not make any mistakes along the way, then you should resort to a boat loan calculator to figure out how much you can allow yourself to borrow, and more relatable concerns.
There are times when you want to buy different stuff, but you require loans for it. You might get filled with various doubts about whether to go for it or not. In the end, it is your choice to choose whatever you want, but always be responsible and make such decisions deliberately. We hope the questions mentioned above helped you get more clarity to make your decision.