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.