Whether you’re dreaming about cruising the Patuxent or sailing across the Chesapeake Bay, owning your own boat can be a thrilling experience. But it can also be expensive. Fortunately, a boat loan can help to break the price into more manageable monthly payments. The amount that you can borrow will vary based on the kind of boat you want to purchase and the lender’s discretion. The interest rate and repayment terms will also vary from lender to lender.
A boat loan is typically secured, which means that the lender can repossess your boat if you default on your payment obligations. That security may make this type of financing more accessible than personal loans, which are not backed by anything of value and can be less affordable for people with poor credit scores.
Some lenders offer unsecured boat loan credit union rates as well. However, unsecured marine loans usually have higher interest rates than secured ones. They are often available to those who have a high enough credit score and a long enough credit history to qualify. In addition, unsecured loans typically come with higher origination fees, which can add up quickly and significantly.
Before applying for a boat loan, be sure to have a clear idea of how much you’re willing to spend and what your financial goals are. This will help you to avoid over-borrowing, which can result in unnecessary interest charges. It’s also important to have your credit reports on hand, since the lending process will require verification of your income and debt-to-income ratio.
Once you’ve figured out how much you want to spend and what your credit situation is, you can begin shopping around for the best rates. Many lenders provide online calculators that can help you determine the estimated cost of a particular boat based on its specifications and other factors. This can be a great way to narrow your search and get an idea of what your options are before you apply for a loan.
In addition to comparing boat loan rates, it’s also worth considering the length of your repayment term. In general, longer loan terms will have lower monthly payments but will cost you more in interest over time. Similarly, shorter loan terms will have higher monthly payments but will save you on interest expenses.
Regardless of what type of boat you’re looking for, LightStream has a loan option to help you finance your dream. With a new boat loan or used boat financing, you can get pre-approved before you shop, which is like having cash in hand and can make it easier to spot a good deal when you see it. You can finance up to 85% of the boat’s invoice price or a maximum fair market value (Marine Survey) for boats over 25 feet.