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How to Qualify for a Boat Loan |
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A few years ago, buyers were qualifying for boat loans who normally wouldn't qualify for a mortgage. It was easy to get a loan because the banks had loosened their criteria for home loans, which spilled over into "Specialty Lending", while throwing long tested lending principles out the window.
It's a different story in today's market. Qualifying for a boat loan is harder than it was a few years ago, but it's not impossible.
That being said... It is important to begin the procces to qualify for a boat loan.
Here are some helpful tips for qualifying for a boat loan:
1. Inspect all three of your credit reports. Pull your credit reports from Equifax, Experian and Transunion. Make sure that all of the information is accurate. If you find an account that doesn't belong to you, submit the necessary form to all three credit reporting agencies to dispute the account.
2. Improve your FICO score. Unfortunately, lenders heavily weight your lending eligibility based on a score that may not accurately measure your financial stability. The FICO score only measures your ability to repay a loan. Improve your score by paying down debt, paying all of your credit accounts on time, and keeping open accounts with a zero balance.
3. Invest in the purchase. Buying a boat with a 20% or more down payment shows you are serious, and Banks want to see borrowers have the financial commitment to the purchase and are capable of putting in Equity.
4. Banks have a criteria they use to assess risk. They are using
Credit scores (700 and above), Down Payment (20% minimum)
Previous boat loan experience is a positive, as well as comparable borrowing experience, especially on larger loans along with job stability and cash reserves for Debt Service.
5. Income Verification. Lenders need verification that a luxury item such as a boat, which has other associated costs (Maintenance, Insurance, Dockage, Fuel, etc) can be well-afforded. Have your complete package ready. (Two years tax returns, Current YTD income, verification of "Liquid" Investments; cash, stock, annuities, IRA's etc.)
6. Be Realistic. The rule of thumb is a monthly debt ratio of all debts including the boat payment (and boat expense) that does not exceed is 40% of your monthly household income.
7. Choose Carefully. Select a reputable company to work with. There are few banks lending for Boat Loans, and there is a high probability you're your request will be duplicated. Work with a company with a long history of making boat loans and one that has strong relationship ties with their banks.
Now is a great time to buy. There are tremendous opportunities to purchase boats at that represent an exceptional value, or may have been previously unaffordable. Take the time to prepare in advance, get "pre-qualified" so you know that financing will not affect your negotiations or timetable to purchase.
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| *Rates are subject to change without notice. Actual rate may vary based on credit history, collateral, down payment, loan amount and other criteria. |
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Fixed rates
as low as * |
5.87% |
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