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Boat Loan Basics - Boat Age and Value
August 16, 2012

All lenders look at the boat age and value. It will determine whether the boat loan qualifies for their policies and will have an impact on the boat loan interest rate and term. Many banks charge a little more interest for older boats.

Most banks do 10 model years or newer. Some banks only do 5 years and newer, some 10 years and newer, some up to 20 years and some up to 30 years. Past 30 years old may become a real finance issue. Credit unions typically are in the 4 to 8 year range. The older the boat, typically the harder they will review and the more qualified everything needs to be.

Older boats will typically will be shorter terms as well. Where most banks do 20 years over $100,000, they may only do 15 years if the boat is over 10 to 15 years old. If the boat typically qualifies for 15 years, they may reduce the term to 10 or 12 years. As with every other qualification for a boat loan, each bank is different.

For boat values, most banks either look at www.nadaguides.com or www.bucvalu.com. For smaller boats such as smaller center consoles such as Yellowfins, Grady Whites, Contenders, Sea Vees, Rangers to ski and wake board boats like Tige, Mastercraft, Maxum and Malibu, they typically use nada and for larger boats they usually rely on buc. Again, each bank is different.

For the ones that use nada, they are looking at low retail with options not being too much more than 15% to 20% of boat value. If your boat value has a low retail of $20,000 and you put $15,000 in options, they will most likely limit your loan to 85% to 90% of low retail plus 20% of options. In this case, $20,000 + $4,000 in options = $24,000 - 10% down = $21,600 for approximate loan amount. If your purchase price is $75,000 and nada shows low retail including options of $60,000, be prepared to make a larger down payment. They will go off of the $60,000 number and most likely 10% down for a loan of $54,000 meaning a $21,000 down payment.

For larger boats and yachts such as Sea Rays, Hatteras, Carver, Viking and sailboats such as Beneteau, Jeanneau, and Hunter, they will most likely use Buc. Buc includes options and gives you a high to low range. You can change value a little using different conditions. However, if you are saying Bristol, your survey must also indicate such. On larger boats say above $250,000, most lenders are looking for 20% down, some will do 15% but you really must be qualified.

Speaking about surveys, they are not typically used for value. However, please review your survey is close to and above the selling price. Many times a survey has come in below purchase price causing a down payment / boat loan amount adjustment.

If you have any questions about boat ages, value, interest rates or anything else concerning boat loans, please feel free to give me a call at 954-847-1500 or visit us online at www.eboatloans.com.

Thanks and have a great day,



Jack

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