Yacht Financial Options

Many choices exist that will enable you get a loan to finance your yacht. It is upon you to select one that meets your needs. These choices are highlighted and explained below:

  • Personal loan from a bank– You can inquire from your bank whether they offer a credit product that can finance your yacht. You can also do a thorough background research on what other banks offer and at what rate. You can ask whether your bank can lower their interest rate if you put a huge amount down.
  • Work with your boat dealer– When you want to get your yacht loan fast, it is important to work with a boat dealer. Boat dealers have a lot of information about boat credit and have interacted with many banks and understand the ones that offer the loans at competitive rates. Though work with boat dealers is a bit expensive, you will get your credit within a short time because they have plenty of experience in boat/yacht financing. The dealer handles all the work needed and you’re able to concentrate on other important issues. The dealer may also you offer certain incentives such as no amount to be put down or reduced introductory rate. The key downside of using this option though is that the dealer may be expensive.
  • Home equity loan-this option is one of the best as it enables you to minus the rate you pay on your home loan from your federal taxes. You will only be able to borrow a huge amount if your loan has much equity. It is important to shop for a buyer with the best interest rate when using this option.
  • Credit cards– This option is a bit expensive but it can nevertheless be applied when the other options are impossible for your case.

What lenders consider before offering you your boat loan

Before offering you a yacht loan, lenders will consider various factors as follows:

  • Your net worth– You will attract many lenders if you’re a high net worth individual. This is because many lenders what to sell other products that they offer apart from yacht loan. These products can only be sold to individuals whose net worth is high. There are many products that can be sold to such individuals. These include: mortgages, second home, auto loans, RV etc. The lender may also want to understand whether you’ve other loans that you’re servicing.
  • Management of credit-To enable you understand how you manage your credit, some lenders may want to understand whether you have ever taken a loan and how you paid it. Some lenders may require that a borrower has a reserve amount of at least a year to enable them repay the loan in case the financial situation of the client changes.
  • Stability and consistency– Before offering you a yacht loan, the lenders may want to know how long you have been in your employment and what is your profession.
  • Credit scores– When applying for a yacht loan, it is important to ensure that your FICO score range between700 to 800. These scores are crucial because they determine your down payment amount.

Perks of working with yacht dealers

  • Lower down payments– To attract as many clients as possible, most boat dealers ask borrowers to put a little amount or a zero amount down. They will look at various factors before extending this privilege to you. These include: your age, the type of yacht you want to buy and your FICO score.
  • Faster credit decisions– The boat dealers fast track the loan process because of their experience in handling credit matters.
  • Extras –The boat dealers may enable you finance boat extras including your electronics and insurance.

Where you can get boat loans from

When you are in need of a yacht loan, there are various lenders that you may contact. These include: Credit Unions, boat dealers, financial service companies, banks and boat brokers.

  • Banks– There are banks based at the local, regional and national levels to offer credit facilities for people who want to buy yachts. Before selecting one, it is important to inquire about the yacht credit products that they offer and at what rate. You need to choose a bank that offer products that meet your needs at the best rate. You can also inquire whether there is room for negotiation especially if you put a huge amount down.
  • Financial service companies-These companies work closely with local, regional and national lenders. It is important to inquire about the products that they offer and their rate.
  • Credit Unions– They’re the best avenues where you can get the best credit from to finance your yacht.

Before selecting a lender for your yacht credit, you need to consider various factors as follows:

  • Interest charged– You need to consider the amount that you will use to buy your credit. It is advisable to compare what various lenders are charging and choose one that offers the best rate.
  • Rating– How the lender is rated by industry regulators is important because it gives you a clue about the lender’s reputation. Look at what Better Business Bureau (BBB) say about the lender. What score have they given the lender? Is it A++?

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