BOAT LOANS FOR BOATING ENTHUSIASTS

2007-03-08 10:33:40

( Financial )



Good news to boating enthusiasts! Boat financing schemes are available for you. Boat loans are available either as secured or unsecured. Secured boat loans require collateral usually the borrower's house, other tangible assets or the boat being financed itself. It usually bears a cheaper interest rate relative to unsecured boat loans. Like any secured loans it requires consistency in payments to avoid losing the property that you put as loan collateral.

Unsecured boat loans require no collateral from the borrower. It charges higher interest rate and other fees to compensate for the higher risk lending unsecured. Also, the approval process is highly selective. Borrowers need the vouch of a good credit history to have a good chance of approval. Valued clients of banks are usually easily approved for this type of loan. These clients have a history of good repayments on loans.

Individuals with negative credit rating and bad credit history will have a hard time applying for a boat loan. Particularly since boat loans are considered high end loans. Boating is a pastime that can only be accessed by a few number of the populace due to the high cost associated with boat construction and maintenance. A boating enthusiast has to set aside cash for the regular maintenance of the boat aside from the regular amortization for the boat loan. Sailing through bad weather can risk damage to the exterior of the boat which entails repair cost and requires more cash from the owner.

Various types of boat loans are available depending on your needs. Boat financing is available for purchase of second hand boats as well as for brand new boats. Second hand boat financing might actually be cheaper but you need to check whether the boat being financed is still in good condition or not. Check also the additional expenses that you will incur in the refurbish and repair of the boat according to your specifications. Boat loans for racing and commercial sailing are also available. These loans are expensive due to the nature of its purpose. Check with your current lender on the terms and conditions of these loans.

It is important to know the price of the boat you want to buy to help you decide how much loan you will apply. You can finance half of the purchase cost of the boat and half of the amount you can finance through a loan. Putting equity on your loan to purchase the boat might result to a lower cost and lower terms of repayment. Whatever terms you decide make sure that it is congruent with your cash flow to avoid default on your payments.


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