The Basics of Boat Financing

Boats are among the more high-end types of goods that people purchase, since they typically cost thousands of dollars. Anyone who doesn’t have that money in the bank will likely make use of boat financing options to complete their purchase. In fact, most people tend to do this, allowing them to pay off their boat in fixed monthly installments over time while they enjoy using it.

You have several options when it comes to financing your boat purchase. We’ve outlined some of them below.

Types of Boat Loans

A loan on your boat will be an installment loan, which requires you as the loan holder to pay a fixed amount each month for a duration of time (anywhere from a year to ten years is possible) until the purchase is paid off. Interest is accrued on the loan, and the amount will depend on factors like your credit score, your income level, and which subset of loan you get. Bear in mind that, no matter which type you choose, you’re going to have to pay a down payment of 10% to 20% of the boat’s total cost up-front.

The two primary subsets of loans are secured and unsecured. A secured loan uses the boat as collateral, which means that the boat is repossessed if you fail to make your payments in a timely fashion. The nice thing about a secured loan is that it will typically offer you a longer amount of time to repay the loan, in addition to providing you with lower interest rates and higher loan limits. 

Unsecured loans do not require collateral, but the rates are much higher and the terms are much shorter. While you won’t lose your boat if you don’t pay, you may end up in a lawsuit or you may experience wage garnishment on your paycheck, in addition to your credit score going into free-fall.

Where to Look

You’ve also got options when it comes to finding a boat loan, including banks, credit unions, and marine lending specialists like the financing department here at Midwest Marine Boat Company.

If you’ve got an account with a bank or credit union already, it may be more advantageous to obtain a loan through that institution, as you could get lower interest rates and other perks for being a loyal customer. Make sure that you explore all your options to choose the best one for your lending needs.

When you’re ready to buy a boat, you can take advantage of the financing options here at Midwest Marine Boat Company. Our financing department can help you determine the best option for you, depending on your budget and the type of boat you want to purchase. You can drop by our Harrisonville, MO, location to take a tour of our great stock of new and used boats for sale. Midwest Marine Boat Company serves our Missouri customers in Raymore.