Author: Atlantic Horizon Capital Staff

Is It Possible To Refinance an Existing or Future Boat Loan?

Boat owners have a diverse array of needs when it comes to refinancing an expensive yacht or expedition watercraft. Fortunately, you can still encounter plenty of competitive purchase and refinance loans on an impressive range of upscale marine vessels in today’s credit market.

You might be asking yourself, “Can I actually refinance my existing or future boat loan? And will it help me reduce my borrowing costs?” Under the right circumstances, the answer is almost always a resounding yes.

As current or future boat owners, you should be familiar with the benefits of refinancing your new yacht or luxury watercraft loans at a better rate and term.

Shopping for a new refinancing loan for your boat requires a lot of due diligence on your part. You want to ensure that you find the best financing terms for your vessel. Now, let’s review how a boat loan refinance can reduce your overall expenditures.

Should You Refinance Your Boat Now, and Why?

Refinancing one of your most important assets now can be an excellent solution for anyone seeking to renegotiate their existing loan terms to reflect a more favorable rate, attain a different amortization schedule, or get a lower monthly payment. When you refinance your boat loan, the goal is always to draft a better financing agreement between the bank and yourself.

Refinancing frequently entails shortening your loan’s term to pay off your boat sooner. This way, you’ll avoid paying additional interest on a longer loan. Along these same lines, you can extend the length of your existing loan to lower your current monthly payments. As the owner of a luxury yacht or a high-end fishing boat, you know how important it is to keep your vessel in tip-top shape.

Reducing the overall cost to own your boat through refinancing helps keep your beloved watercraft running optimally. This helps you better enjoy your time away from it all on the water. Refinancing your boat is a great strategy for lowering your monthly borrowing costs, and allows you to commit more of your boat ownership budget to your boat’s essential maintenance and upkeep. Reducing the overall cost to own your boat through refinancing helps keep your beloved vessel running optimally.

Refinancing into a better boat loan ultimately means you’re optimizing the return on your investment. By seeking more advantageous terms such as lower interest rates, longer loan terms, and more flexible repayment options, you assure that you’re not paying a third party more than you need to for one of your most key personal assets. At the same time, refinancing your boat frees up more of your hard-earned cash that could be otherwise put to valuable work in cash-flowing investments.

Refinancing liberates more of your budget for upgrades, as well. The extra cash helps you keep your vessel in premium condition and avoid the all-too-common pitfalls of deferred maintenance that lead to rapid depreciation. Securing better financing on your boat helps you reduce the overall costs associated with ownership, allowing you to keep the experience more affordable.Refinancing liberates more of your budget for upgrades, as well. The extra cash helps you keep your vessel in premium condition and avoid the all-too-common pitfalls of deferred maintenance that lead to rapid depreciation.

While boat loans can last for decades, after meeting a few conditions, you always have the option of refinancing your boat loan into a more desirable product either with your current lender or starting afresh with an alternative option. Refinancing your boat lets you upgrade your vessel with new features and accessories and leverage the latest technology to ensure an optimally safe and modern luxury boating experience.

While you can refinance your existing boat loan at any time, most lenders prefer to see at least three consecutive months of on-time payments toward the loan before they grant you a new refinance loan. Some creditors may require six months of seasoning or longer in your current boat agreement before refinancing the loan. Other boat loan programs may lack seasoning requirements entirely.

What are the Additional Benefits of Refinancing a Boat?

Locking in a lower interest rate for your luxury yacht is a proven strategy for cutting the notoriously expensive costs associated with owning your dream vessel. Paying your old loan off in a boat refinance allows you to lower your borrowing costs and reduce your loan balance faster. Refinancing at the right time can save you a considerable sum over the life of your boat loan.

Refinancing your boat can also provide several additional financial benefits you may not have considered. With a lower interest rate, the value of the loan is thereby reduced, meaning you pay less for your asset. This has the effect of maximizing your borrowing power. When you lessen your monthly obligations, you improve your debt-to-income (DTI) ratio, making your personal credit profile attractive to potential lenders.

Paying off your existing loan for a better rate is especially beneficial for boat owners who want to make critical repairs or upgrade their boats and need reasonably fast access to the equity in their assets before they can start. Likewise, refinancing allows you to leverage an array of products that offer access to the lowest interest rates or let you pay off your loan faster at a much lower cost than your existing loan.

As monthly boat payments often account for a significant portion of your overall expenses, refinancing a luxury boat loan can reduce your overall debt. By paying off the boat loan faster, boat owners free up more funds to pay off other high-interest debts, like revolving consumer trade lines, open business accounts, and personal loans.

Considering Refinancing an Existing Boat Loan?

Refinancing an expensive boat loan can save you thousands in interest and fees, but it’s hardly a decision to enter into lightly.

If you’re just now starting to shop for a new boat loan and need expert consultation to help you decide whether a boat refinance is right for you, reach out to a specialist at Atlantic Horizon Capital today.

Our experienced team of credit experts can put you on track to enjoying the most favorable boat financing terms now. Dial us at 609-365-1540.

All About Boat Loan Debt-to-Income Ratio

When you apply for a boat loan, your financial history is reviewed by your lender to determine if you are a low-risk candidate. Your financial stability, credit history, and debt all come into question. The gravity of your debt is, in fact, a huge determining factor in the approval or denial of your boat loan application. To be approved for a boat loan, you must have a good debt-to-income ratio; one that is too high will make lenders hesitate. To ensure that you have the best chance of getting a boat loan and the boat of your dreams, here is everything you need to know about debt-to-income ratio.

What is Debt-to-Income Ratio?

Debt-to-income (DTI) ratio is a financial metric that compares a person’s debt payments to their overall income. This ratio is used by lenders to assess an individual’s ability to manage debt and make payments on time. It is a critical factor in determining whether someone is eligible for a loan or credit card.

The DTI ratio is calculated by adding together your monthly debt obligations, such as your credit card payments and mortgage, and then dividing it by your monthly income. Lenders typically use two different types of DTI ratios: front-end and back-end. Front-end DTI ratios only consider a person’s housing expenses (e.g., mortgage or rent payments) in the calculation. Back-end DTI ratios include all of a person’s debt payments, including credit cards, car loans, student loans, and other expenses.

As an example, let’s say you have a monthly debt obligation of $4,000 and a monthly income of $10,000, that will put you at a 40% DTI. Keep this number in mind.

Why Does Debt-to-Income Ratio Matter?

The DTI ratio is an important factor when applying for any type of loan, including a boat loan, because it compares your monthly debt payments to your monthly income. The higher your DTI ratio, the more likely you are to have trouble making loan payments. If your DTI ratio is too high, the lender may deny your loan application or offer you a higher interest rate.

Having a low DTI ratio is important when applying for a boat loan because it shows the lender that you have a strong financial position and are less likely to default on the loan. Lenders want to ensure that you have enough disposable income to comfortably make your monthly loan payments. A low DTI ratio also indicates that you are responsible with your finances and are less likely to miss payments.

The Best Debt-to-Income Range for a Boat Loan

There is no concrete DTI ratio that lenders want to see. Each lender sets their own DTI requirements while also considering other factors. As such, one lender’s acceptable DTI ratio range may be much higher than another. The range your DTI must be will also change depending on which kind of loan you are apply for. For instance, you may find that your DTI ratio can be much higher when you are using a secured loan to purchase a home. The reason is that your home is collateral. If you are attempting to get an unsecured loan, meaning there is no collateral involved, the lender may be much stricter about your DTI ratio.

Ideally, you want a DTI ratio below 43%. Again, there are some lenders who will accept a higher ratio, especially if the other factors they look at—such as your credit history—are favorable. A DTI ratio below 36% is considered excellent, and it shows that the borrower has a good balance between their debt and income.

How to Reduce Your Debt-to-Income Ratio

Being that your DTI ratio is such an important factor when trying to procure any kind of loan, knowing how to reduce it is essential. Having a 40% DTI ratio before adding in the boat loan payment is not the end of the world, but if you can get the DTI ratio down to around 35%, you will be much better off. There are several steps you can take to reduce your DTI ratio and improve your chances of being approved for a boat loan.

Pay Down Existing Debt

One effective way to reduce your DTI ratio is to pay down your debts. Start with high-interest debts such as credit cards and personal loans, which can have interest rates as high as 20% or more. When you pay off these debts, you not only lower your DTI ratio but also improve your credit score. This can make it easier to qualify for a boat loan and get a lower interest rate.

Also, try to pay on time. Late payments do not directly impact your DTI ratio, but they do have a minor influence. Since late payments affect your credit score, and a poor credit score impacts your monthly payments, your DTI ratio could be higher than it needs to be. By paying off debts and paying attention to your credit score, you can start lowering your DTI ratio.

Increase Your Income

Chances are, if you are looking to buy a luxury vessel, your income is not the problem. However, you may want to consider selling any items that you do not use or need, such as an extra vehicle or pieces of a collection that have increased in value. Bringing in a bit more cash can help you put forth a more tempting down payment.

Reduce Your Current Expenses

Cutting back on unnecessary expenses is another way to save money and reduce your DTI ratio. Look for ways to save on your monthly bills, such as canceling subscriptions or negotiating your cable and phone bills. You can also save money on groceries by shopping at discount stores, buying in bulk, and using coupons. By reducing your expenses, you’ll have more money to put towards paying off your debts and lowering your DTI ratio.

Consider Refinancing Current Debt

Refinancing high-interest debt into a lower-interest loan can help you lower your monthly payments and reduce your DTI ratio. For example, you could consider refinancing your auto loan or student loans. This can help you save money on interest and make it easier to pay off your debts. When you refinance, make sure to compare different lenders and choose the one with the best interest rate and terms.

Wait to Purchase Your New Boat

While it may be inconceivable to put off buying your new boat when your head is set on it, waiting is sometimes the best way to get your DTI ratio under control. Remember: you can work on lowering your DTI ratio over time. By following the above steps, you can improve your financial situation and make it easier to qualify for a boat loan. Waiting a few months or a year can make a significant difference when it comes to being approved for a loan. In the meantime, you can continue to pay down your debts, increase your income, and reduce your expenses to improve your DTI ratio.

Optionally, you can apply for a smaller loan. If you want to buy a boat without the best DTI ratio, then you can improve your chances by applying for a smaller loan amount. The downside is that you are going to need more outright.

Consider a Co-Signer For Your Application

It may not help with creditworthiness, but asking someone to be a co-signer is another option if your DTI ratio is too high. A co-signer is someone who agrees to take on equal responsibility for the repayment of the loan. When a co-signer is added to a loan application, their credit score, income, and DTI ratio. This means that if the co-signer has a lower DTI ratio and a higher income, they could improve your chances of being approved for the boat loan.

A co-signer could also lower the interest rate on the loan, which can help reduce the overall cost of the loan. However, it’s important to keep in mind that adding a co-signer to a loan also means that they are equally responsible for the loan repayment. If the primary borrower is unable to make the payments, the co-signer will be responsible for the payments, which could damage their credit score and financial situation.

Also, keep in mind that some lenders do not permit co-signers for boat loans. Be sure to check with the lending institution beforehand to see if you can have someone sign the documents with you. If you do decide to use a co-signer, make sure their financial stability and creditworthiness is exemplary.

Looking to Finance Your New Boat?

Debt-to-Income ratio is an important factor that lenders consider when approving boat loan applications. Should you have a high DTI ratio, you need to work on reducing it prior to applying for a boat loan. That will increase your chances of approval.

When looking to finance a brand new boat, go with a flexible lender devoted to your experience, such as Atlantic Horizon Capital. Our experienced and educated team can help you find flexible financing options that suit your needs and get you the boat you want. Call 609-365-1540 or contact us today to see if you are pre-approved for one of our boat loans. Optionally, you can start filling out a loan application form.

What Size Yacht Can You Afford?

Owning a yacht is not only one of the world’s greatest luxuries, but it’s also an extravagant expense. As manufacturers push the envelope on what the yacht lifestyle can offer, these vessels are becoming increasingly more costly. Yachts come fixed with a high initial capital, as well as long-term maintenance and insurance fees to consider. You’re looking to purchase a yacht, you may want to ask yourself what size you can afford.

What Are The Different Yacht Sizes?

Before anything else, you must consider the size of the yacht you aspire to purchase. Here is a breakdown of different yacht sizes, including the typical features, crew capacity (because you will need that), and the price tag:

Small Yachts: Also known as mini yachts or pocket yachts, these vessels run between 20-30 feet in length. They are designed for day cruising, fishing, and water sports. These yachts usually have a single cabin, a small kitchenette, and a bathroom. They are suitable for a couple or a small family and can accommodate up to 4 people. The cost of a small yacht can range from $10,000 to $100,000.
Medium Yachts: Medium yachts are typically between 30 to 50 feet in length. These yachts are suitable for weekend cruises, longer fishing trips, or day trips with a larger group of people. Medium yachts usually have two to three cabins, a kitchen, and one or two bathrooms. They can accommodate up to 8 people and require a crew of 1 to 3 people. The cost of a medium yacht can range from $100,000 to $1 million.
Large or Super Yachts: Large yachts are typically between 50 to 100 feet in length. They are designed for luxury cruising, entertaining guests, and extended vacations. These yachts usually have four to six cabins, a spacious kitchen, several bathrooms, and luxurious amenities like a hot tub, a bar, and a cinema room. They can accommodate up to 12 people and require a crew of 3 to 6 people. The cost of a large yacht can range from $1 million to $10 million.
Mega Yachts: These enormous vessels are typically over 100 feet in length. They are the epitome of luxury and are often owned by billionaires, celebrities, and royalty. These yachts usually have multiple decks, swimming pools, a gym, a spa, and a helipad. They can accommodate up to 20 people and require a crew of 10 to 30 people. The cost of a mega yacht can range from $10 million to $500 million or more.

Calculating How Much Boat You Can Afford

Now that you understand how much various yachts cost, it is time to find out exactly how much boat you can afford. To do that, you must first figure out your debt to income (DTI) ratio. From there, you can then estimate how much you would need for a down payment on the yacht, and how much you would need for a boat loan.

The first step to calculating your DTI ratio is to add up your monthly debt expenses, including your mortgage or rent, car loan payments, insurance payments, credit card debts, alimony, and so on. This should only be your debts, not regular living expenses, like groceries or utilities.

Once you’ve quantified your monthly debts, divide that number by your calculated gross monthly income. Generally, gross monthly income consists of your retirement payments, salary, rental income, etc.

Finally, take that number and change it into a percentage. That will be your debt-to-income ratio.

To save time, you can also use the Boater Pal Calculator to determine how much you should spend on a boat.

Considering Your DTI Ratio

Now, let’s say you have a DTI ratio of 30.5% before adding in a boat loan payment. A good DTI ratio is 35% or lower, and would put you in good standing to receive a boat loan. Once the boat payments are added, you will still be within a fairly acceptable range. If you have a DTI ratio between 36-49%, your lender may suggest that you work on improving your DTI ratio before trying for a more expensive vessel. Any DTI ratio that’s 50% and higher is considered poor, and your chances of securing a boat loan may be minimal.

Consider this: you add a boat loan payment of $5,000-$10,000 a month (assuming you purchase a yacht that is over $1 million). If your DTI ratio were at 30.5% before that payment, you may be bumped into the 50-60% range. In other words, making those payments may be difficult for you.

How Much is the Down Payment for a Yacht?

This depends on factors like your loan terms, loan amount, credit score, DTI ratio, and the age of the boat. After your DTI ratio, what you can afford depends on the down payment. The average down payment for any boat is typically between 10-30%. This depends on factors like your loan terms, loan amount, credit score, DTI, and the age of the boat. If you are a high-risk lender, you may have to pay a higher down payment.

Hypothetically, if were you to purchase a $2 million yacht, you would pay anywhere between $20,000 and $60,000 for a down payment.

How Much Does It Cost to Own a Yacht?

Second to the size of yacht you can afford is the maintenance and operational costs. After the initial purchase, you can expect to pay 20% or more of the yacht’s purchase price to maintain it. In other words, if your yacht is worth $10 million, it will cost you around $2 million a year to keep it running. These running costs include insurance (typically 1-5% of the vessel’s value), fuel, dockage fees, repairs, and crew salaries.

For example, the 590-foot superyacht Azzam belonging to the President of the United Arab Emirates, Sheikh Khalifa bin Zayed Al Nahyan costs about $60 million annually to run.

Your yacht will also need routine maintenance to stay in good condition. The cost of maintenance and repairs will depend on the age of the yacht, the level of use, and the specific maintenance and repairs needed. The annual cost of maintenance and repairs can range from 5% to 15% of the yacht’s value.

The Crew

Perhaps the greatest benefit to owning a yacht is having a personal crew tend to the boat while you enjoy your life on board. Deckhands, engineers, chefs, stewards, and the captain all need to be paid. For a 100-to-170-foot yacht, it is estimated that a captain with more than 5 year’s experience earns a salary between $5,500-$16,000 a month, according to Luxury Yacht Group’s Salary Guidelines.

Mooring

Though prices vary from port to port, mooring your yacht at world-class marinas can cost you around $4,000 per night or more. Prime-time events that attract yacht owners from around the globe, such as the Monaco Grand Prix, often cost around $85,000 for five nights.

Furthermore, if you plan on leaving your yacht in the water throughout the year, you must consider port and winterization fees. These fees depend greatly on the region, the size of the port, the size of your yacht, and so on. As such, it may be a couple hundred a month or several thousand.

Fuel

Fuel costs are another significant ongoing expense for yacht owners. The cost of fuel will depend on the yacht’s size and the distance traveled. The fuel consumption rate can range from 100 gallons per hour for smaller yachts to 500 gallons per hour for larger yachts.

Finance Your Dream Yacht Today

Many people dream of owning a yacht, but it is important to first ask yourself, “What size yacht can I afford?” Consider your budget, debt-to-income ratio, and the ongoing costs of yacht ownership when making your decision. It’s crucial to carefully consider each of these factors before determining which size yacht you can comfortably afford.

When financing a yacht, you want to work with a flexible lender who enjoys boating just as much as you. At Atlantic Horizon Capital, we believe in exceptional services and outstanding results. With our customizable loans and competitive rates, our team can help you finance the boat of your dreams. Start filling out your boat loan application today or get in touch by calling 609-365-1540.

Boat Loan Terms and Conditions: What You Need to Know

Everything You Need To Know About Boat Loan Financing Terms and Conditions

Shopping for a new luxury boat or yacht can be as exhilarating as it is stressful. And while boat ownership is decidedly a rewarding experience for most, this doesn’t mean financing a top-end vessel can’t get overwhelming for even the most skilled investment pros.

Whether a first-time boat buyer or a seasoned veteran, prospective boat owners should understand the core financing terms of their loans before they start any search for a new vessel.

Should you fail to explore your options and examine the finer print, you could commit yourself to inadequately disclosed terms or lock into a high-interest loan over an extended repayment period.

Atlantic Horizon Capital specializes in financing high-end boats and luxury yachts. We offer our esteemed clientele best-in-class service through every phase of the approval process. Our experienced team of financing specialists will help you navigate the sometimes murky waters of boat financing. We keep borrowing costs low for our customers. This way, they can optimize the return on one of their biggest investments.

Our senior lending agents will equip you with all the valuable information required to interpret both common and not-so-common boat financing terms. The additional knowledge helps to ensure that you’re well-informed and comfortable with the terms of your next loan agreement.

So that you get the best value for your boat purchase and can continue enhancing your current financial position, we put together this brief guide discussing everything you should know about boat financing terms.

By the end, you should feel confident in moving forward with a long-term boat ownership plan that won’t compromise your current economic security and lets you continue making profitable long-term investments with the savings you’ll gain.

Qualifying for a luxury boat loan

As mentioned, securing the best luxury boat or yacht loan takes a bit of legwork, the bulk of which entails doing the research you’re engaged in now. However, as you start selecting your next luxury watercraft, there are a few specific steps you can take to assure you qualify for a competitive boat loan.

Above all, a good credit score is crucial. A FICO or credit score of 740 or higher gives you the best odds of securing a competitively priced boat loan. Prepare yourself, as well, to make a sizable down payment on your next luxury vessel. Down payments can range anywhere from 10-20% of the total cost of your new luxury boat or yacht. You’ll, similarly, have to provide proof of income and financial assets.

Your credit score shows creditors seven to ten years of account payment history, but proof of income gives lenders a picture of your current financial situation. Your monthly income tells creditors whether or not you’re equipped to make regular payments on the loan.

Aside from a strong FICO, supported income, and investing a considerable down payment into your new boat, familiarizing yourself with the various loan types provided by banks specializing in boat loans is vital.

Countless different types of bloat loan products exist for financing high-end personal vessels. This is why consulting with a boat finance professional is so important. The extra effort guarantees you’re not missing out on the best lending opportunities.

Among the more popular loan types are fixed-rate loans, adjustable-rate loans, balloon loans, and combination loans. It is, therefore, vital to understand the sometimes complex terms and conditions of each loan type so you can informatively decide which lending product best meets your financial objectives.

To recap, here is what boat lenders typically look for in a borrower’s credit profile:

Legal residency status
Verified bank deposits
Higher FICO scores
Consistent employment
Lower debt-to-income ratios

How does the approval process differ from lender to lender?

The boat loan qualification process often does vary from lender to lender. It is, therefore, necessary to take the time to compare your first loan offer against multiple options and not just go with your preferred lending partner.

Most creditors will have their own set of criteria for loan qualification, including debt-to-income ratio (DTI), credit score, and loan disbursement amounts. While lenders can offer their own unique boat financing solutions, many products on the market frequently parallel each other.

Debt-to-income ratio is among the core indicators lenders use to determine loan eligibility. This ratio measures how much of your income goes towards existing debt payments. The higher the DTI, the more difficult it becomes to evidence your ability to pay and ultimately qualify for a competitively priced boat loan.

Some lenders require a lower debt-to-income ratio, while others may be more flexible. However, in most cases, the lower your DTI ratio, the better your odds of getting approved for a well-priced boat loan in the future.

Credit score is, of course, another key factor in qualifying borrowers. Generally, the higher the credit score, the better the chances of a loan approval. Different creditors come with their own unique FICO score requirements, nonetheless. As a borrower, you should be aware of these before applying to avoid excessive hard credit pulls that can lower your FICO and potentially eliminate your eligibility.

Understanding the various criteria involved in the loan qualification process before you apply empowers you to make an educated decision about moving forward with a specific lender. And while it’s always advisable to take the time to compare and contrast different lenders, we are confident that Atlantic Horizon Capital offers the most competitive financing solutions. Our boat financing products have saved our valued customers considerable time and thousands in borrowing costs over the lives of their loans.

What are the different types of loan products?

Luxury boat and yacht owners will encounter a multitude of loan options available for securing their new expedition watercraft. From fixed-rate loans to adjustable-rate loans and balloon loans, these are just a few recurring boat lending products to keep on your radar.

Each loan product includes its own benefits, so it’s essential to compare the different lending options before determining which one best fits your existing budgetary requirements and long-term financial goals.

For more on our full suite of yacht and luxury boat lending options along with expert guidance on choosing the right boat financing product, connect with our knowledgeable team of boat loan specialists today by submitting an application on our site. Or, dial Atlantic Horizon Capital now at 609-365-1540.

What Are The Requirements for an RV Loan?

Recreational vehicles, also known as RVs, offer flexible and convenient travel options to explore parts of the country you’ve ever seen before. But before that, they are a significant investment for anyone looking to purchase an RV. While there are many options available, one of the best paths for purchasing is to sign up for an RV loan. Being that RV loans are designed to cover such a sizable purchase, the process of having your RV loan approved is slightly more complex than an auto loan.

What Do You Need to Qualify for an RV Loan?

Being that obtaining an RV loan can be complicated, it is important to understand what you, as a buyer, will need to qualify for these loans.

Credit Score

When it comes to qualifying for an RV loan, credit score is one of the most important factors. Most lenders will require a credit score of at least 680 or higher. 700 and up is even better. This is considered a good credit score and shows that the borrower is financially responsible and able to handle debt. However, some lenders may be more flexible with credit scores, and may offer loans to borrowers with lower scores.

Borrowers with lower credit scores may still qualify for RV loans, but you should be prepared to pay higher interest rates and fees. Lenders see borrowers with lower credit scores as higher risk, and therefore charge more to offset that risk.

Optionally, you could take steps to better your credit score before applying for an RV loan. Paying your bills on time, reducing credit card debt, and working with a credit counselor can get you back on track and ready to pay off your RV.

Source of Income

In addition to credit score, lenders will also want to ensure that you has a steady source of income and can afford to make the monthly loan payments. This means that borrowers will need to provide proof of income, such as pay stubs or tax returns. Lenders may also consider the borrower’s debt-to-income (DTI) ratio when deciding whether or not to approve a loan. The DTI ratio is a measure of the borrower’s monthly debt payments (auto loan, mortgage, alimony payments, etc.) in relation to their monthly income. A lower DTI ratio (35% and below) is generally seen as more favorable by lenders.

If you have a higher DTI ratio, it does not necessarily mean that you are exempt from receiving a RV loan. However, your RV loan terms may be more rigid and require you to pay more per month.

Down Payment

Depending on the lender and the borrower’s credit profile, a down payment may be required. The amount of the down payment can vary, but it’s typically between 10% to 20% of the purchase price. For example, if an RV costs $100,000, the down payment would be between $10,000 to $20,000. The purpose of a down payment is to reduce the amount of the loan and lower the risk for the lender. Borrowers who can make a larger down payment may secure better loan terms, such as a lower interest rate.

Keep in mind that you can always pay more than the minimum down payment and afford yourself a shorter loan period or less costly monthly payments.

Insurance

Most lenders will require you to have comprehensive insurance coverage on the RV throughout the life of the loan. This is to protect the lender’s investment if that the RV is damaged or destroyed. In other words, you will need to provide proof of insurance to the lender before completing the loan application. Optionally, your lender can choose a full coverage policy for you. However, if your lender purchases a plan for you, the premiums are often higher and liability coverage is minimal at best.

To give you some idea of what to expect, the average annual premium for a Class A motorhome is between $2,000 and $4,000. For a Class B camper van or conversion van, the premium is between $1,000 and $2,000.

Collateral

There are secured and unsecured RV loans. Should you opt to apply for a secure loan, you will have to use collateral. The RV itself will typically serve as collateral for the loan. This means that if you default on the loan, the lender can repossess the RV to recoup their losses.

For used RVs, to ensure that it is free and clear of any liens or encumbrances, the lender may require a title search and lien check. This is to make sure that there are no other parties who have a claim on the RV.

Shopping Around for RV Loans

As mentioned earlier, the requirements for RV loans can vary depending on the lender and the specific loan program. This is why it’s important for borrowers to shop around and compare offers from multiple lenders to find the best RV loan for their needs. By doing this, you can find a loan that offers favorable terms and fits within your unique budget. Be sure to check out online lending institutions, banks, and even credit unions to see what is available to you.

In addition to comparing loan offers, borrowers should also consider working with a reputable lender, like Atlantic Horizon Capital. A reputable lender will be transparent about their loan terms and fees, and will work with the borrower to find a loan that fits their needs. They may also offer pre-approval, which can help streamline the buying process and give you more negotiating power.

Finance the RV of Your Dreams Today

RV loans can be a great way for buyers to finance the purchase of a luxurious RV without having to pay for the entire cost upfront. However, to qualify for an RV loan, borrowers must meet specific requirements, including credit score, income, down payment, collateral, and insurance. Working with a reputable lender can also make a big difference when it comes to RV loans, which is why you should contact Atlantic Horizon Capital today.

The team at Atlantic Horizon Capital works with you to come up with a customizable RV loan, so you can get on the open road in your new motorcoach faster. Our loans and interest rates are also highly competitive. Start your online application today or give us a call to see if you are pre-approved at 609-365-1540.

How Do Lenders Approve Boat Loan Applications?

Before you can enjoy the freedom that comes from owning a boat, you must consider your purchase as a significant expense. One of the best ways to finance this purchase is through a boat loan. This process, however, raises several questions like, “How do lenders approve boat loan applications?” Let’s explore what you need to know to ensure your application goes through without any trouble.

Your Budget

How do you plan on paying for your boat? Paying cash may seem like the obvious choice, but remember that there is more to buying a boat than what is on the price tag. In other words, if you plan to purchase a boat outright with cash, you will need to cover the price tag, plus taxes, closing costs, insurance, and any other fees that could amount to double the initial cost.

That is why boat loans are popular options for procuring a boat.

As such, you must first determine your budget. Consider the size vessel you need, its intended purpose, and how many crew members you need to operate it. An online boat loan calculator can determine the loan amount that fits within your budget. It’s best if you also researched the current boat loan rates, so you can estimate what the interest rate on your loan will be. Remember that a boat loan will typically require a down payment of between 10% and 30% of the cost of the boat.

The Process of Boat Loan Approval

Next, it’s time to shop for a boat and select a lender. Many lenders are available, and choosing one that meets the borrower’s unique financial situation is essential.

Once a lender has been selected, you can then apply for a pre-approval boat loan. The pre-approval takes into account the borrower’s income and credit score and demonstrates to the boat seller or dealer that the borrower is a well-qualified and serious boat buyer. This is a more solid indication of how much the borrower can purchase than a pre-qualification.

The lender then requests information from you. This information includes identification, such as a valid driver’s license, social security number, proof of employment or business ownership, two or more years of tax returns, bank statements, and pay stubs or profit and loss statements. Lenders will look at the borrower’s FICO credit score, credit history, whether bills are paid on time, credit utilization, and debt-to-income ratio. This information determines whether the borrower is a low-risk candidate for the loan.

Once it has been declared that you are a low-risk candidate, your lender may decide to approve the application.

Is It Easy to Get Approved for a Boat Loan?

Getting approved for a boat loan is not necessarily easy, but it’s possible if you have a solid financial standing and good credit history. Here are some tips to ensure that your lender approves your application:

Know your credit score: Your credit score is an essential factor that lenders use to determine your creditworthiness. Most lenders want a FICO score of at least 680, but others will want 700 or higher, especially if you plan on buying a more expensive yacht. Before applying for a boat loan, it’s a good idea to check your credit score and address any errors or issues that may negatively impact your creditworthiness.
Build a strong credit history: Making regular payments on time, keeping your credit utilization low, and avoiding late payments and defaults can help you build a strong credit history and improve your credit score. This can make it easier to get approved for a boat loan.
Have a steady income: A steady income and a stable employment history can demonstrate to lenders that you can make regular loan payments.
Save for a down payment: Saving for a down payment can show lenders that you are invested in the purchase and are less likely to default on the loan.
Keep debt-to-income ratio low: Lenders also consider your debt-to-income ratio, which is the amount of debt you have compared to your income. Keeping your debt-to-income ratio low can increase your chances of getting loan approval.
Shop around for lenders: Not all lenders offer the same rates and terms, so it’s a good idea to shop around and compare offers from multiple lenders to find the best deal for you.

What Might Cause a Lender to Deny a Boat Loan Application?

Lenders have their own criteria that factor into whether you are approved or denied. Some of the factors that lead into a denial include:

Incomplete or inaccurate application
Insufficient income
Poor credit score
Evidence or history of fraud
Recent foreclosure or bankruptcy
Lack of steady employment
Not enough funds for a down payment
High debt-to-income ratio
Zero credit history
Accounts in collections
Credit cards maxed out
Lack of collateral for secured loans
Length of time at your current address is too short

Looking to Finance Your Dream Boat?

Atlantic Horizon Capital can help you find a boat loan that fits your financial profile.

With the right preparation and a solid financial profile, borrowers can enjoy a smooth sailing boat loan approval process. Lenders approve boat loan applications by viewing your credit history, among other factors. If you are seen as a low-risk candidate, they will approve your application. Don’t forget to contact Atlantic Horizon Capital at 609-365-1540 to learn more about our available boat loans or check our pre-approval process. Or, if you are ready, begin your online application for a boat loan today.

New vs Used Boat Financing: What’s The Difference?

When you first a boat, you may ask yourself whether it’s best to finance a new boat or a used one. Both options have their pros and cons, so it is important to understand the differences between the two, such as the boat loans available. There are several differences between financing a new or used boat, such as the interest rate, loan terms, boat depreciation, and even the inspections. Let’s go into more detail.

Interest Rates

When considering whether to finance a new or used boat, you should understand the differences in interest rates. Typically, interest rates for new boats are lower than for used boats. Why? Because lenders consider newer boats to be less risky. Used boats are more of a risk because they may have more maintenance and repair issues than a new model. Furthermore, new boats on the market have a longer lifespan than their predecessors, meaning they can be used for more hours before needing to be replaced. As such, a new boat is a far more attractive investment for lenders. In turn, you, the borrower, receive a lower interest rate.

Boat Loan Terms

Risk also plays a role in determining your boat loan terms. The loan terms for a used boat may be shorter than those for a new boat, which can result in higher monthly payments (which can be counterbalanced by a lower price tag). This is because lenders consider used boats to be a higher risk than new boats. As boats age, they may require more maintenance or repair work, which can be costly. Additionally, lenders may require a larger down payment for a used boat to offset the higher risk. This can make it more difficult for some borrowers to qualify for a loan or afford the payments.

Credit Score

You may be wondering if the credit score you need to secure a decent boat loan will change depending on whether you buy a new or used boat. Generally, lenders will require a higher credit score for a new boat loan compared to a used boat loan, because new boats are more expensive and therefore pose a higher risk for lenders. To qualify for a new boat loan, you may need a credit score of at least 680 (or higher), while a score of 650 may be sufficient for a used boat loan.

Do keep in mind that this will change between lenders. Some are more flexible with their credit score requirements than others. It is always advisable to contact a lender like Atlantic Horizon Capital to determine your specific requirements and options.

Debt-to-Income Ratio

Your debt-to-income (DTI) ratio is another factor that lenders consider when deciding whether to approve you for a boat loan. DTI ratio is the percentage of your monthly income that goes toward paying off debts. Lenders will typically require a lower DTI for a new boat loan compared to a used boat loan. Keep in mind risk. Lenders are more wary of giving loans for a used boat that may have expensive issues.

Furthermore, new boat loans tend to be larger, and lenders want to ensure that you can afford the payments. To qualify for a new boat loan, you may need a DTI ratio of 35% or lower, while a DTI ratio of up to 43% may be acceptable for a used boat loan.

Depreciation of Boat Value

Depreciation is another factor that can impact the financing of a boat. New boats can depreciate quickly in the first few years of ownership, whereas used boats may have already experienced a significant amount of depreciation. This can affect the resale value of the boat and may impact the amount you can borrow or the interest rate you are offered. It’s important to carefully consider the depreciation of a boat when choosing between a new or used boat, as it can impact the overall cost of ownership.

For that reason, depreciation is also important to consider as the buyer of the vessel. A boat that is several years old with more on the engine may not run for as long as a newer boat. Consider the cost of ownership, as well as the interest rate on the used boat. You may find that a new boat is more affordable.

Boat Condition and Inspection

A new boat offers one major advantage: it’s brand new and nothing needs repair. With used boats, it’s the opposite and lenders know that. When financing a used boat, lenders may require a marine survey to assess the condition of the boat and ensure it is worth the loan amount. This can add additional costs to the financing process, as borrowers will need to pay for the surveyor’s services. Additionally, lenders may require that any necessary repairs be completed before the loan is approved. This can add further costs to the financing process, and can make it more difficult for borrowers to qualify for a loan.

Looking to Finance Your Dream Boat?

Whether you decide to finance a new boat or a used boat, it’s important to work with a lender who can guide you through the financing process and help you find the best deal possible. Consider your budget, your goals, and your preferences when choosing between a new or used boat. Remember that financing a boat is a significant investment, and taking the time to research your options can save you money and ensure that you have the best boating experience possible.

Atlantic Horizon Capital can help you achieve your boating dreams. We offer exceptional service and flexible boat loan options for both new and used vessels. Get in touch with us today by calling 609-365-1540 or begin your financing application online

What Credit Score Do I Need to Get a Boat Loan?

While one of the best ways to finance your luxurious new boat is to secure a boat loan, there are some factors that will determine whether you can afford the vessel or not. The main factor is your credit score.

Although the credit score requirements will vary from lender to lender, understanding what credit score you need to get a boat loan can help you better prepare for the application process and even secure better rates and terms.

Let’s take a look at what credit score is necessary for a boat loan, as well as the credit factors affecting your loan application, and how to increase your chances of getting approved.

What to Know About Credit

Credit refers to a person’s financial history and their ability to manage credit and debt responsibly. In other words, a credit score is a number that represents an individual’s creditworthiness, based on their credit history.

Credit scores typically range from 300 to 850; the higher the score, the better your credit history. To lenders, higher scores also mean a lower lending risk. Credit scores are determined by several factors, including payment history, credit utilization, length of credit history, types of credit accounts, and recent credit inquiries.

Why does this matter? Because boats are an expensive, ongoing expense. Being that yachts and other large vessels are considered luxury purchases, lenders view them as high-risk loans. When you opt to purchase a boat using a loan, the lender wants to see that you have an acceptable credit score to offset some of this perceived risk. Furthermore, a good credit score means that you have a stable financial history and will be financially responsible when it comes to repaying the loan back in a timely manner.

What Credit Score Do You Need to Get a Boat Loan?

The credit score required to finance a boat will vary, though the minimum credit score requirement is usually between 600-700. Some institutions take lower credit scores while others require higher ones. At Atlantic Horizon Capital, we generally accept good scores of 670 and up.

Now, here is something to consider: The size of the boat (and its price tag) will often impact the minimum credit score you need to be able to secure a boat loan. Although the exact credit you need is going to vary depending on the lender’s criteria and your financial situation, you can anticipate that a $3 million luxury yacht is going to require a better credit score than a $500,000 cabin cruiser.

Additionally, larger boats may also require larger down payments, which could impact your ability to get approved for a loan if you don’t have enough savings or equity to make a substantial down payment. Lenders may also consider other factors, such as your income, employment history, debt-to-income ratio, and other debts and financial obligations, when assessing your creditworthiness for a boat loan.

How Your Credit Score Can Affect Your Boat Loan Application

A score of 700 or higher is not only going to determine whether you can apply for a new loan. Your score is also going to impact other sections of the application, as well as the end result of your repayment plan.

Take a look at the ways your credit score can affect the application process:

Approval: Lenders use credit scores as an important factor in determining whether to approve your application for credit or a loan. Generally, a higher credit score makes it more likely that you will be approved for credit, while a lower credit score may result in a denial or higher interest rates and fees.

Interest Rates: Your credit score can also impact the interest rates and fees you are offered. A higher credit score usually translates to lower interest rates, which can save you money over the life of the loan. On the other hand, a lower credit score may result in higher interest rates and fees, which can make the loan more expensive.

Loan Terms: Your credit score may also affect the loan terms that you are offered. Lenders may offer different loan terms, such as the length of the loan and the size of the down payment required, based on your credit score.

Credit Limits: When applying for a credit card or line of credit, your credit score can also affect the credit limit you are offered. A higher credit score may result in a higher credit limit, while a lower credit score may result in a lower credit limit.

Security Deposits: Some lenders may require a security deposit or collateral to secure the loan, especially if your credit score is low. This can be a significant burden, as it requires you to put down a substantial amount of money or assets upfront to secure the loan.

Again, while most lenders have their unique requirements for various credit and loan types, the better your credit, the better your chances of approval and decent terms. Aim to get the highest possible credit score you can prior to your application, as it can save you money on fees and interest rates in the future.

Does Applying For a Boat Loan Impact Your Current Credit Score?

When you apply for a boat loan, the lender you choose is going to pull your credit. What does that mean? When someone “pulls your credit,” it means that they are accessing your credit report from Equifax, Experian, or TransUnion to review your credit history and assess your creditworthiness. This is also known as a “credit inquiry” or a “credit check.” A credit check is an important part of the approval process and cannot be bypassed, unless you plan on paying for your yacht outright.

There are two types of credit inquiries: hard inquiries and soft inquiries. A hard inquiry occurs when a lender or creditor accesses your credit report as part of a formal application for credit, such as when you apply for a loan or a credit card. A hard inquiry can affect your credit score and can stay on your credit report for up to two years.

A soft inquiry occurs when someone accesses your credit report for a non-credit related purpose, such as when you check your own credit report or when a potential employer or landlord checks your credit as part of a background check. A soft inquiry does not affect your credit score and is not visible to lenders.

With a boat loan, it will be a hard inquiry that impacts your score for about a year. Fortunately, many credit scoring models will not penalize you for rate shopping, and so you will not take multiple hits when applying through various lenders. Your credit score will only be impacted once when searching within the given rate shopping window (such as the FICO 8 Score 14-day window), preventing your credit score from being irreparably damaged.

Looking for a Flexible Lender for Your Boat Loan?

Before any lender approves you for a new boat loan, you will have to meet a credit score requirement. For most, you need a credit score of 700 or higher, though some lenders are more flexible. Keep in mind that your credit score is one of the biggest factors in the terms and rates you are offered with the boat loan.

If you are looking to finance your next cruiser or yacht, Atlantic Horizon Capital invites you to experience the exceptional with our pre-qualification process and competitive boat loans. We work quickly to prove your loan so you can begin enjoying your boat sooner. Get in touch with our experienced team today at 609-365-1540 or start filling out your application online.

How Long Can You Finance a Boat?

Because buying a boat is such a significant investment for most people, you may find that financing is one of the most practical ways to go about it. However, before you decide to finance a boat with a boat loan, it’s important to understand the different options available to you and how long you can finance a boat.

Here is everything you need to know if you are planning on financing a boat:

How Long Can You Finance a Boat?

The length of a boat loan depends on several factors. In general, boat loans can range from 2 to 20 years, but the most common loan term for boats is between 5 to 15 years.

The length of the loan is important to keep in mind because it impacts the total cost of ownership. Longer loans result in lower monthly payments, but it also means you will be paying greater interest overtime. On the other hand, shorter loans mean you pay a higher monthly fee, but you do not have to pay as much interest as a longer financing term.

Factors That Affect The Loan Term You’re Offered

The length of a boat loan typically depends on several factors, such as the cost of the boat, the down payment, and your creditworthiness. Let’s look at these factors in greater detail:

Your Lender

One of the main determinants in how long you can finance a boat is the lender and their requirements. Some lenders have specific guidelines for the loan and how long it takes to pay it off. Those guidelines are going to depend on the boat’s type, size, age and condition.

You do have many options for lenders. Financing through a credit union or marine lender that specializes in boat loans are two better choices, since they offer more flexible loan terms.

Your Creditworthiness

Better credit and credit history means better loan terms. Conversely, if you have a lower credit score and a history of late payments, the lender will not be able to give you as good a deal. Those who are less worthy will find their options limited and requirements strict.

Your Location

In an effort to keep you, the borrower, safe, many states have limits on the terms of installment loans. Because of this, your location will alter the kinds of loans and terms available.

Boat Type

The length of a boat loan can also depend on the type of boat you’re purchasing. Smaller boats, such as personal watercraft or runabouts, are typically financed over a shorter period, usually between two to seven years. Larger boats, such as yachts or cruisers, are usually financed over a longer period, between 10 to 20 years. The reason for this is that larger boats are more expensive, and it can take longer to pay them off.

Boat Age

Do you plan on purchasing a brand new boat that has no hours on it? Then you will be usually be given multiple options for loan terms.

Used boats are much more of a liability, because they may need serious repairs or have far too many hours on the motor. Unlike brand new boats, your lender will be hesitant to extend longer terms if you try to finance a used one. Commonly, used boats come with much shorter loan terms.

Boat Price

Some lenders have a minimum loan amount. If you are purchasing a smaller craft, you may be shocked to find that the cost of the loan does not meet the price requirements.

Depending on the price of the boat, you may be offered a shorter loan term or be asked to give the lender a larger down payment.

Finance Your Boat With Atlantic Horizon Capital Today

To conclude, how long you can finance your boat depends on several factors, including the cost of the vessel, your down payment, and your creditworthiness. Boat loans can range between 2 and 20 years, though the most common boat loan term is 5 to 15 years. If you are considering financing your boat, it is important to think about your current financial situation, as well as where you will be in the future. By doing so, you can make an informed decision and enjoy a new boat without breaking your bank.

Looking for affordable and flexible financing options? Apply online at Atlantic Horizon Capital today and see how easy it can be to get a customized loan. Our team is fully versed in the latest options, so if you have any questions, please contact us for more information.

The Best Ways to Finance a Personal Aircraft

Let’s face it. No one enjoys going to a crowded airport, waiting on passenger planes that may be delayed, and then dealing with the noise and frustration during the trip—even when you’re in first class. It is no wonder that more individuals are turning to private aviation with their own pilot and crew to get where they need to go faster and with less stress. If you are considering purchasing a private aircraft, such as a jet, you should know that financing it can be a complex process. There are several financing options available, though, so you should find one that suits your needs.

What is a Personal Aircraft?

First, let’s define what it means to have a personal aircraft as the size and maximum takeoff weight can impact your loan to some degree. There are generally three types of private jets, categorized based on their maximum takeoff weights:

Light Jets: These are the smallest and most economical private jets with a maximum takeoff weight of up to 10,000 pounds. These can either be single- or double-engine, typically carry up to 4-6 passengers, and have a flight range of up to 1,500 miles. Examples of light jets include the Cessna Citation M2 and the Embraer Phenom 100.
Midsize Jets: These are larger and more spacious than light jets with a maximum takeoff weight of up to 20,000 pounds. Domestic midsize or super midsize jets can typically carry up to 8-10 passengers and have a flight range of up to 3,000 miles. Examples of midsize jets include the Gulfstream G150 and the Bombardier Learjet 60XR.
Heavy Jets: These are the largest and most luxurious private jets with a maximum takeoff weight of over 20,000 pounds. Heavy jets can typically carry up to 10-18 passengers and have a flight range of up to 7,000 miles. Examples of heavy jets include the Gulfstream G650 and the Bombardier Global 6000.

It’s important to note that the maximum takeoff weight and passenger capacity can vary depending on the specific model and configuration of the private jet.

Similar to financing a car or boat, the age, make, and model of the aircraft can influence your financing options and terms. Generally, lenders are more willing to finance a newer, small aircraft than one that is older with plenty of mileage.

The Best Ways to Finance a Personal Aircraft

Now that you know what qualifies as a private jet or personal aircraft, let’s take a look at the ways to finance your purchase.

Asset-Based Aircraft Loans

One of the most convenient options is an asset-based or secured aircraft loan. An asset-based loan means that, if you default on payments, the lender will be able to repossess your small aircraft. However, no further compensation would be required.

In an asset-based loan, the value of the asset being used as collateral (in this case, your aircraft) is a key factor in determining the loan amount and interest rate. In the case of an aircraft loan, the lender will typically require an appraisal of the aircraft to determine its current market value and may use this value to determine the loan amount and interest rate. Creditworthiness also plays a role in this.

One advantage of an aircraft loan is that you can typically secure a lower interest rate than you would when purchasing a private jet or other small aircraft with a personal loan or credit card. Similar to the financing you use when purchasing a boat, car, or house, this loan comes with a floating or fixed rate. An asset-based loan is generally structured to have short or long-term repayment options. You may be able to secure a short 30-month loan term or one as long as 120 months. In some cases, the loans have amortizations up to 240 months.

That said, if you go this route, you will be faced with very high interest rates, particularly with longer windows for repayment.

Credit-Based Aircraft Loans

For those with exceptional credit, you may select a credit-based loan instead of an asset-based loan. This kind of loan is where the lender determines your eligibility based on your creditworthiness. Creditworthiness is a measure of how likely you are to repay the loan on time and in full. It is determined based on several factors, including your credit score, income, debt-to-income ratio, employment history, and other financial information. Typically, a credit-based loan will cover about 90% of the aircraft’s assessed value. There have been some situations where individuals with outstanding credit are covered up to 100% of the personal aircraft’s value.

The interest rate you are offered on a credit-based loan depends on your creditworthiness; if you have a higher credit score, you typically qualify for lower interest rates.

Keep in mind that these kinds of loans can be secured or unsecured. Be sure to read the loan terms.

Aircraft Leases

Another option to finance a private jet is through a lease. With an aircraft lease, you make payments to use the aircraft for a set period of time, typically three to five years. At the end of the lease, you can choose to purchase the aircraft, return it to the lessor, or renew the lease. Aircraft leases can be a good option if you don’t want to commit to owning an aircraft long-term.

There are two kinds of aircraft leases: non-tax lease and tax leases.

A non-tax lease means that the lessee, you, owns the private jet for tax purposes. This is useful for when the value of the craft depreciates.

A tax lease, on the other hand, is when the lessor owns the private aircraft and, thus, is the one who reaps any tax benefits gained from depreciation. With tax leases, the interest rate is usually lower than with a non-tax lease.

Looking For an Aircraft Loan?

Now that you know the financing options available for personal aircraft—traditional loans, asset-based loans, leases, and personal loans—take some time to consider your budget, as well as the costs and terms of your options. If you are looking for a flexible asset-based or credit-based loan with the best rates available, contact Atlantic Horizon Capital today. Our loans are unlike those from a traditional bank, because we get you the most competitive terms and interest rates.