Are you thinking about buying a boat?

If you’re on the market for purchasing a new boat, it can be overwhelming trying to figure out how to afford the cost of this large expense. Learning how to finance a boat in Canada can be the best way for you to get started chasing your passion for boating. It’s a great way to make the jump into investing in a boat upgrade that you really wanted.

That’s why today, We’ve created this complete guide to help you get a better understanding of used boat financing. Keep reading to learn more!

 

What Is a Used Boat Loan?

A used boat loan is a type of financing option available for people interested in purchasing a used vessel. This loan will cover the financing for fishing boats, sailboats, Ski-Doos, and any other type of boat. You can get a used boat loan from a private lender, a big bank, or a specialty lender.

With a used boat loan, the money you are approved for will get sent directly to the used boat dealer you’re purchasing from. Once the money but you’re approved for is sent to the dealer, you’re able to repay the loan amount through installments.

 

Secured Loans vs. Unsecured Loans

When your purchasing a used boat, you’ll be presented with the ability to choose between a secured used boat loan and an unsecured used boat loan. Learning about the differences between unsecured loans vs secured loans is important. This is because you’ll be able to gather a better understanding of the benefits that each type of loan has to offer.

Understanding the differences between unsecured loans and secured loans will help you make the best possible financial situation. This is why it’s important for you to understand what each type of loan has to offer before deciding to apply.

Secured Used Boat Loans

A secured used boat loan will work similarly to the way that a secured auto loan works. This means that the title for the boat of your purchasing will likely be used as collateral for the loan. It means when the title is being used as collateral, the lender will maintain ownership over the title until you’ve paid off the entire loan amount.

If there’s ever a situation where you’re unable to make too many payments, the lender will seize your boat and resell it. Using a secured boat loan will provide you with better rates and a larger loan amount.

This type of loan will be best for you to use if you’re struggling to find a lender that will work with you because of your credit score. Or if there’s a certain both that you’re really got your eye on, but you can’t afford it any other way, a secured boat loan may be the best option for you.

Unsecured Loans

If you aren’t interested in putting your boat’s title up for collateral, you should consider looking into an unsecured loan. An unsecured loan means that you won’t have to put your boat title up for collateral. You also won’t have to worry about providing any other collateral form to get approved for the loan.

The biggest drawback of this is that unsecured loans tend to have higher rates and lower approval amounts than secured loans. Unsecured loans are great for potential boat owners that have a steady income, a good credit history, and not a lot of debt.

 

Are There Any Guidelines for Used Boat Financing?

For you to get approved for used boat financing in Canada, there are some basic guidelines that you have to follow. These guidelines are:

O.A.C. Loans

All loans for a used boat have to be approved. Plus, they have to be proved by a bank that has taken a look at your creditworthiness.

Amortizations

Some new boats can have amortization for up to 20 years at a time. However, this is without the age of the boat.

There are some used boats that can have amortization for up to 20 years. With new boats, you have the ability to choose for your boat to have less time. However, 20 years is to believe a max that the boat can qualify for.

Qualifying Rates

The qualifying race that you receive will depend on your credit score. Also, the boat’s age, how much cash value you’re putting down if you’re putting down any trade value, and the total amount of financing that you were borrowing will be taken into consideration when you apply for a loan. The current prime lending rate will also be considered when you’re applying to a bank for a loan.

Credit Check

When you apply for a used boat loan, a bank will need to take a look at your credit score to determine your likelihood of a pre-approval. This process is commonly referred to as a hard credit check. As a result of a hard credit check, you will likely see a slight temporary decrease in your total credit score.

If your credit score is low enough or a poor credit history, you will likely not get approved for a used boat loan.

 

How Do You Choose the Right Used Boat?

When you’re in the market for a used boat, it can be overwhelming trying to find the right model for your wants and needs. Whether you’re looking for a speed boat, a large powerboat, or sailboat, there are likely hundreds of different models on the market for you to choose from.

The first thing that you need to do is figure out what kind of boat you’re in the market for. What are you looking to get out of your used boat? You should decide whether you’re looking to get a boat for sailing, fishing, cruising, watersports, or if you’re looking to get a boat for several different purposes.

Also, you need to think about how many people need to be accommodated on your boat. This means that you’ll also need to think about how big you need your boat to be.

In addition, you also need to contemplate how large of an engine you need. It would help if you consider choosing between a stern drive, an outboard, an inboard, a sail, or a get.

While you’re answering these questions, you should also think about if you will need to move your boats around on dry land. If you do, you’ll need to get a boat that has a trailer attachment. Also, don’t forget to think about how much you’re willing to spend on your new boat.

 

Choosing the Right Financing Options

Once you get a better understanding of what type of boat you’re interested in investing in, it’s also time for you to take a look at the different financing options available to you.

There are many different types of boat loans available. A lot of the loans available in today’s market are very affordable. However, these different options do offer their own unique advantages and disadvantages. That’s why it’s important for you to consider all of the other options available before deciding on one type of loan.

Think About Loan Terms

The loan terms for a boat loan tend to be very similar to what you would see for auto loans. Most used boat loans will have a duration of more than ten years. This means that you’ll be able to pay lower monthly costs over an extended period of time.

Many used boat loans will offer either variable rate financing or fixed-rate financing. Plus, the interest rates will depend on what provider you use.

However, it’s important for you to shop around with different providers. This is because different providers May provide you with a competitive rate that better fits your budget. Also, depending on your credit score and the provider you go with, you may be required to pay a down payment.

The down payment that you put down maybe around 10% to 20%. However, some used boat loan companies will provide you with a 0% down payment to purchase a used boat.

Also, if you’re purchasing a larger used boat, there’s a chance that your loan could be broken up into several terms. This means that you may be in a substantial amount of debt for a few years. If you’re unable to afford the large chunks of loan repayment, it could hurt your financial future. You may want to consider sizing down on both sides if you cannot completely afford the cost.

When looking around for the best loan terms for your needs, there are several factors that you should consider. These include:

• Requirements for down payments
• A payment schedule
• Duration of your loan
• Variable interest rates
• Fixed interest rates
• Late payment fees
• Penalties
•  Maximum loan amount
•  Minimum loan amount

Each provider that you look at would likely offer different options. That’s why it’s important for you to shop around through different providers to find the best available loans.

Additional Costs to Expect

When you’re purchasing a used boat, there are other hidden costs that not many shoppers are aware of. That’s why you need to understand all of the costs that are associated with owning a boat. This way, you can get a better understanding if you’re truly able to afford the purchase of a used boat.

Some of the most common costs that come with purchasing a used boat include:

• Docking fees
• Maintenance
• Insurance
•  Inspection fees
•  Fuel
•  Storage
•  Extended service plans
• Equipment

All of these fees can add on a hefty bill when purchasing a new boat. That’s why you should be aware of all of these fees before you apply for a used boat loan.

 

How Do You Apply for a Boat Loan?

When you’re applying for a boat loan, there are a few requirements that you must meet to get approved for the loan. These exact requirements will vary depending upon your credit score and the loan provider that you’re going with. However, most loan providers require the following information:

• Proof of income
• Completing an online, via the phone, or a written application
•  Providing full details about the boat, including registration and tax details
• A financial statement that provides the loan provider with an assessment of your existing debt, your assets, and your income
•  A credit check and meeting the minimum threshold for a credit score

If you have all of this information, it’ll make it a lot easier for you to easily apply for a boat loan. If you haven’t yet applied for alone, you may want to consider gathering all these details up before your application is submitted.

 

Understanding How to Get Approved for Used Boat Financing

When you go to apply for a used boat, you must consider your financial health before you submit any application. There are a lot of unexpected costs that many people are prepared to pay when they get a used boat. Learning what these costs will help you decide whether you need to apply for a larger loan amount.

Plus, learning about the different used boat financing options available to you can help you narrow down what companies you’re considering applying to.

Are you looking to purchase a used boat this year? Here at West Shore Marine, we’re here to help you find the right financing solutions and loans for your personal financial situation. Click here to contact us today to learn more about how we can help you get approved for a used boat loan.