Boat Loan Basics - Summary and Other General Notes
August 28, 2012
Let me finish up with a summary, a few more notes and some general statements about boat loans. Like I said at the beginning, getting a boat loan is like a puzzle. You need all of the pieces to get it done. Depending on the age and value of the boat, yacht or rv, loan amount and your credit, will all determine whether you qualify for the best interest rate and loan.
They key factors again to getting a boat loan are:
A boat with a value supported by and in the books (NADA or Buc)
A good credit score (680 to 700+ for the best interest rates)
Good credit history (comparable credit history, limited to no late payments, no short sales, no bankruptcies)
Limited credit card debt (banks like to see less than $20,000)
Good income (debt to income ratio below 40%)
Stable income (be employed in same position for at least 2 years)
For larger yacht loans, they will be looking harder at liquidity (at least 6 months worth of debt payments in bank after down payment to 30% of the boat loan) and net worth (would like to see at least 2 times the value in net worth)
Again, there are sub-prime type rates from 15% to 19% for those that donít meet some of these criteria and there are some exceptions to every rule.
Financing for boats, yachts and RVs are pretty much underwritten by the same people at the lenders. Obviously, you have senior underwriters handing the bigger and more difficult yacht financing and refinancing.
There are very few lenders providing boat loans for live aboards. One of our competitors, Essex Credit, which is owned by Bank of the West, still provides these loans. You can also check with your local bank or credit union.
The national lenders tend to have great rates at longer terms. Typically for boat loans from $25,000 to $75,000 you are looking at a 15 year term depending on the age. From $75,000 and up, you may be able to obtain 20 year financing.
The local lenders tend to be all over. They can definitely have better rates and a lot have much higher rates. There terms tend to be shorter from the 6 to 10 year range. Also, they tend to shy away from boats older than 5 to 10 years. It is still to your advantage to always check your local bank or credit union.
As always, if you have any questions, please give me a call at 954-847-1500 or visit us online at www.eboatloans.com. Good luck!
Thanks and have a great day,
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