| Not too long ago, finding a lender that
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| | The Boat. You may be asked to provide:
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| made boat loans was difficult. Today, the
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| | About You:
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| challenge is deciding which lender to
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| | - Your complete name, address, phone
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| use. In an active boating market, you'll
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| | number
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| find several sources for boat loans, so
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| | - Employment details
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| it's a good idea to compare rates and
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| | - Verification of income (Tax returns for
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| terms to determine the financing best
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| | the last two years)
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| suited for you.
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| | - Details on homeownership
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| Looking out for the best interests of
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| | - List of monthly financial obligations
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| boaters and the boating industry is The
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| | (Credit cards, alimony/child support,
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| National Marine Bankers Association. NMBA
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| | mortgage/rent, etc.)
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| was founded in 1979 to educate current
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| | - Personal financial statement (Assets
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| and prospective lenders in marine
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| | and liabilities)
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| financing procedures and to promote the
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| | About the Boat:
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| extension of credit to consumer and trade
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| | Have all of the boat information
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| borrowers. Members of the NMBA include
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| | available for the application:
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| financial institutions such as commercial
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| | - Year, make, model, power, optional
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| banks, private financing firms, savings
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| | equipment and any upgrades
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| and loan companies, credit unions and
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| | - The total cost, which will include:
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| retail service companies.
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| | - Purchase price
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| Choosing a Lender
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| | - All equipment upgrades or additional
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| Some lenders have added boat loans to
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| | accessories
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| their more traditional auto and real
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| | - Sales taxes that must be paid at the
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| estate offerings, even deciding to
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| | time of purchase
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| specialize in boat loans by devoting
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| | - Registration, title, or documentation
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| funding and staff for the purpose. So
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| | expenses
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| where should you start?
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| | The Loan Underwriting
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| Your Own Bank Or Credit Union: Many
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| | Process
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| local, regional, and national banks are
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| | Getting boat loan is not a sure thing, or
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| members of NMBA and offer boat loans
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| | you may not qualify for the entire amount
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| directly to their customers. Start with
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| | you're applying for. Will you be able to
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| your own bank or credit union, and call
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| | buy the boat of your dreams? That depends
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| them or check their website to see if
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| | on several factors. The lender will be
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| they finance boat purchases. Inquire
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| | looking for "red flags" on your credit
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| about rates and how long a loan term is
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| | history.
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| available for the boat you are
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| | - Have you continually and satisfactorily
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| considering.
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| | made credit card and loan payments?
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| Financial Service Companies: These
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| | - Have you ever had a loan comparable to
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| organizations maintain relationships with
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| | the amount you're requesting?
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| local, regional, and national lenders,
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| | - Are you carrying debt that
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| giving them broad access to finance
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| | disproportionate to your income?
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| programs. Again, look for an expert in
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| | - Do you have a down payment that meets
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| marine lending, and membership in the
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| | the lender's guidelines?
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| NMBA.
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| | The lender will look at your present
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| Boat Dealers & Brokers: if you're buying
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| | monthly obligations, and then add the
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| from a dealer, it is likely that an
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| | monthly payment for the boat loan. They
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| on-staff NMBA Finance Manager will handle
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| | may also add the presumed operating and
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| the whole transaction, from assisting
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| | maintenance costs of the boat to see how
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| with the application, vessel titling and
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| | these amounts will impact your monthly
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| the loan closing.
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| | expenses.
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| Other dealers may not have a finance
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| | In addition to your income, the lender
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| specialist on their staff, but they may
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| | may also look at your overall net worth.
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| employ an outside loan service company
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| | Why? Your net worth may be considered for
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| that handles all the same tasks, and it
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| | stability and as a secondary source of
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| will arrange all of the details, or
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| | repayment should you lose your job.
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| simply send you to a bank or financial
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| | Things to Consider:
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| service company they refer business to,
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| | The Down Payment: The down payment is
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| to have them handle the transaction.
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| | based on the age, type and price of the
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| Should you work with a lender directly,
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| | boat you are buying, as well as your own
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| or go through the boat dealer or broker?
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| | credit profile. Typically, marine lenders
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| Dealers usually have established
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| | offer financing with down payments in the
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| relationships with several finance
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| | 10-20 percent range. Manufacturers and
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| sources. They also have access to
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| | dealers may offer a special program that
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| extended warranty programs that can be
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| | could allow you to qualify for less on
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| included in your financing. Because of
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| | anew boat.
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| their relationship with boat
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| | Longer Financing Terms: Very often, a
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| manufacturers, dealers may have special
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| | marine lender will offer longer financing
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| finance programs on certain brands or
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| | terms, which are more attractive than
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| models. Such programs might include
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| | those offered by lenders not actively
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| delayed first payment, no interest for
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| | making boat loans.
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| several months, or lower rates for a
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| | Lower Monthly Payments: Because boats
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| limited time.
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| | have longer life cycles than cars, a
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| Choosing a Loan
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| | marine lender usually extends longer
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| If you believe that financing a boat is
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| | terms on boat loans-which means monthly
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| like financing a car, think again. Much
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| | payments are likely to be much lower than
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| like real estate loans, several types of
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| | you had expected.
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| loans are available to finance your boat.
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| | More Electronics and Extras: In addition
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| Simple Interest Loans are the most
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| | to financing your boat, a marine lender
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| common, simplest, and generally
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| | will allow you to finance optional
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| considered most favorable. This
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| | equipment, electronics, extended service
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| fixed-rate and fixed term simple interest
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| | plans and life/disability insurance
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| loan maintains the same monthly payment
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| | coverage. By financing everything with
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| for the life of the loan. At the end of
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| | one loan, buyers can usually afford a
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| the loan, the borrower has paid off all
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| | newer, larger, or more powerful boat and
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| interest and principal obligations.
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| | all the gear that it takes to make
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| Variable Rate Loans have interest rates
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| | boating safer and more enjoyable!
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| that float based on different interest
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| | Sales and Personal Property Taxes:
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| rate indexes, such as the "prime" rate,
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| | Although this varies by state, most new
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| or LIBOR rate. Variable rate loans often
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| | boat sales are subject to sales and or
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| offer low introductory interest rates,
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| | property taxes; used boat sales may also
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| which can change daily, or at some preset
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| | be taxed in entirety or by varying
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| point in the future, usually months or
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| | methods. Lenders will require proof of
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| years. Make sure you look at the
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| | payment of sales tax to finalize any loan
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| adjustable period and other details to
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| | process.
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| clearly understand how payments could
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| | Is Your Boat "Loan Worthy?"
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| change and anticipate how to manage them.
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| | A qualified marine lender want to make
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| | sure you're getting your money's worth
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| Balloon Payment Loans require borrowers
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| | with your new boat. The lender will
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| to pay the entire balance at the end of a
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| | research the market value of your boat
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| stated term. Some borrowers choose this
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| | through price guides, comparable boats on
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| type of loan, since they know they will
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| | the market, and discussions with dealers
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| only own a boat for a certain period, say
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| | or yacht brokers about the boat. In
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| three years, and prepare to pay off the
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| | addition, a marine survey by a
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| loan at that time.
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| | professional marine surveyor is often
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| Regardless of the type of loan, lenders
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| | required. All this is done to verify that
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| are required to explain the complete
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| | the selling price reflects a realistic
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| details of any type of loan provided.
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| | market value of the vessel, and that the
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| Make sure you ask questions about the
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| | lender is comfortable with the
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| different types and choose the one that
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| | loan-to-value calculation.
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| best suits your financial profile.
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| | Loan Closing and Funding
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| Applying for Your Loan
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| | Congratulations! Your loan has been
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| Here's a simple rule of thumb: The more
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| | approved, and all that's left is the
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| you want to borrow, the more details
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| | closing. As in real estate lending, this
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| you'll need to provide. Depending on how
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| | session deals with the paperwork and
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| much you want to borrow, some lenders
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| | signatures. The dealer, lender or
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| will require a full written application,
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| | financial service company will guide you
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| while others will take the application
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| | through the process smoothly and
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| over the phone.
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| | professionally. Twenty or thirty minutes
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| The boat loan decision process is quite
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| | of review are what it usually takes
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| simple and straightforward. There are two
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| | before you take delivery of the boat.
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| major aspects that are examined: You and
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