Boating is a great way to spend time with family and friends. It can also help improve your health. But it’s not cheap to buy a boat, so if you need financing for your new purchase, you should know what are the best boat loan rates.
Boat loan rates are influenced by many factors, including the economy and a lender’s own creditworthiness. As such, they tend to be lower during times of economic uncertainty and higher during periods of growth and stability. Additionally, interest rates on all types of loans may be affected by the overall market.
In order to secure the lowest boat loan rate, you’ll need to meet a lender’s credit score and income requirements. While lenders may have different guidelines, they typically expect borrowers to have credit scores of 800 or above and a debt-to-income ratio that’s no more than 50%, excluding the boat payment.
Most boat lenders require a minimum down payment of 10% to 20% of the total cost of the loan. This helps reduce your borrowing amount and therefore decrease the size of your monthly payments. Additionally, a down payment can make you eligible for a lower boat loan interest rate.
You’ll want to shop around to find the best boat loan rate. You can compare rates online to see which lenders offer the best options for your needs. Many lenders also allow you to prequalify before applying. This process can be helpful because it allows you to check your predicted rate and approval odds without impacting your credit score.
For example, Southeast Financial offers competitive boat loan rates for borrowers with credit scores above 600. This lender also provides financing for both new and used boats purchased from a dealer or private seller. Similarly, Mountain America Finance is another lender that offers competitive boat loans for buyers with excellent credit.
Other financing options may be available, such as home equity loans and lines of credit (HELOCs). Because these types of loans use your house as collateral, they’re secured by the value of your property. However, these loans are only available to homeowners with enough equity in their homes and who can afford to pay back the loan if they default.
It’s important to remember that a longer loan term will result in paying more interest over the course of the repayment period. Also, since boats depreciate quickly, you could end up owing more than the boat is worth after it’s paid off. Fortunately, you can avoid these risks by choosing a shorter loan term. This will also allow you to own and enjoy your boat sooner.