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Are you looking for marine or boat financing in 2023? If so, then this is the guide for you! As sailing season approaches and more Canadians plan their boating adventures around the country, it's important to understand your financing options.
Whether you're looking for a loan to buy a yacht or just need some guidance on where to get the best rates for financing marine equipment, we've got all the info you need right here in our comprehensive guide to boat financing options in Canada.
With everything from how interest rates affect your budgeting process to what types of loans are available and even tips on finding reputable lenders, we'll break down all that, plus much more below.
Don't worry if you're totally new to boat financing options in Canada or getting a loan. We're here to help make the process as simple as possible. First, what should you know about the basics of boat financing?
Boat financing in Canada is a great way to make boat ownership more accessible. It works similarly to other vehicle loans, as you may finance different boat types over different terms and payment experiences. The amount of boat financing you can get depends on a few factors, including the following:
Generally, boat financing does require a down payment (which we'll get into in a bit) — so make sure you have savings prepared before applying. Before signing anything, read the documents carefully to check all details regarding payments, interest rates, and other provisions in the case of default.
The bottom line? With boat financing in Canada, owning a boat has never been easier. However, there are two main things you'll want to keep in mind if you're financing a boat this year.
For new boat buyers in Canada, interest rates vary depending on the economy and your financial situation. Generally speaking, new boat loan interest rates will be around 5% APR if your credit rating is strong.
Unfortunately, the new boat loan interest rate can climb to 24.99% for borrowers with poor credit or other negative financial indicators. This, of course, can add a lot of extra cost to buying a new boat. So, consider interest rates carefully before making a purchase.
Used boat financing terms in Canada can vary depending on the amount and type of loan needed. Generally, the repayment period lasts between 15 to 20 years. Down payments on loans may range from 10% to 30%, and normally the borrowed boat serves as collateral for the loan.
To optimize used boat financing terms, it's important to look for lenders who offer reasonable interest rates that you can afford. Ultimately, used boat financing can allow you to pursue your dream of owning a used vessel with flexibility and reasonable cost!
Ready to finance a boat with all the new knowledge we imparted above? Great! Now, it's time to look at your boat loan options. As with most other types of large loans, including RV loans, ATV loans, and even auto loans, you'll find that your two main options consist of a new boat loan or a used boat loan.
Financing a new boat can involve applying for a new boat loan. This loan type differs from one used to purchase a pre-owned vessel. New boat loans usually offer more competitive terms, including lower interest rates, longer repayment periods, and larger loan amounts when compared to those issued for used boats.
This means new boat buyers like yourself can often qualify for larger loans. This could make it easier for you to invest in higher-quality vessels that may cost more but require fewer repairs down the road.
Our top tip? Look for a new or slightly-used boat. Lenders are usually more eager to approve loans for newer vessels as they're more reliable.
Generally, used boat loans have higher interest rates than new ones due to the additional risk of buying something used. The lender also may require more paperwork for used boat loans as they assess whether or not the used vessel meets their standards.
Ultimately, used boat loans help those seeking pre-owned crafts access the nautical lifestyle they desire. However, be diligent about researching your option and getting several quotes before you sign any paperwork.
Boat financing plans are a great option for boat owners in Canada. These plans help boat owners spread out the cost of their boat over multiple payments rather than paying for it all in one go. Yes, this is pretty much how a standard loan works. However, some lenders, like NLP Finance, offer other payment options to help you spread out the costs.
This makes boat ownership much more affordable and accessible to many people who may not have been able to purchase or lease a boat otherwise. Plus, boat financing plans provide boat owners with flexibility regarding payment plans and can include other benefits such as coverage for repairs and regular maintenance.
With boat financing, you can rest assured you're investing your money wisely in an asset that will last for years. Who doesn't want that?
We know that boat financing in 2023 can be difficult to navigate. You've also got several options online for boat loans and lenders. As you navigate the process, keep these tips in mind.
Financing a boat isn't just about paying for the boat itself. Keeping up with the maintenance of a cruiser can be very expensive, with mooring fees, engine servicing, and fuel costs all taking their toll.
Therefore, it's helpful to consider not only the boat's purchase price but also whether you have the financial resources to keep up with its operating costs in the long run.
Purchasing a smaller boat may be more financially sound to avoid any unexpected surprises down the line. They often require less capital and will be easier to manage too. Regardless, you should consider all of this before signing that loan agreement. It'll pay off; trust us!
It's a good idea to save for a down payment as you'll have a higher chance of approval (and better terms) if you put down at least 20% of the cost. However, it's great to provide more than 20% as a down payment if you can. Saving as much as possible helps you avoid over-borrowing, reducing the money you have to borrow from a lender.
Why does this matter if you'll eventually pay the same amount for the loan? You'll pay less interest when you pay more upfront, helping you keep more money in your pocket.
Okay, so you don't have to use your home or car as collateral, but it is helpful to provide lenders with more assurance when possible. Remember, to ensure you get favorable terms, your lender needs evidence that you can pay back the loan.
This means they'll want verification of your employment, proof of a stable income, and evidence of any bank savings or investments you possess. To secure the best boat loan terms, be prepared to demonstrate each of these things to the lender.
You can even improve the strength of your application by including proof of things like a car title, home equity, or, as mentioned above, providing a larger down payment. This isn't always necessary, but if you have a poor credit score, it could help your chances of success.
Speaking of credit scores, it's also helpful to look at your debt-to-income ratio. Your debt-to-income ratio is an important part of assessing your creditworthiness and can influence the terms and rates you get when applying for loans.
It’s calculated by dividing the total debt obligations (housing payments, credit card debt, car loans, student loan debt, etc.) by your monthly gross income.
Lower debt-to-income ratios often indicate a better ability to pay back debt. Therefore, having a lower debt-to-income ratio can help increase your chances of getting good boat loan terms. How can you improve your DTI ratio quickly? Making consistent payments towards paying off debt is one of the best ways to improve your debt-to-income ratio.
Finally, feel free to compare! It's necessary to ensure you have the best loan for your needs. Different lenders have different loan products, and getting a feel for what’s on offer is the only way to compare them.
By researching and comparing loan products from reputable lenders online or consulting with an experienced broker, you can ensure you're getting great value. Don't just opt for the boat loan lender nearest to you. Make sure it's the right one for your circumstances.
At NLP Finance, we understand the complexity of boat financing in 2023. We work closely with our customers to determine their needs and provide personalized solutions tailored just for them. We are committed to putting your interests first, striving to help you access the best rates and offers available.
Click here to start your journey towards a better boat financing solution today.