Different Options for Financing Your Boat

Owning a boat is a great way to spend more time on the water with friends and family. You can go fishing or engage in water sports. Although boats can be costly, you can finance your boat and make your dream of being a boat owner a possibility. At Blue Water Boats, in Cape May Court House, New Jersey, we have a selection of boats to choose from. We also serve Atlantic City, New Jersey and Philadelphia, Pennsylvania.

Available Loans

Boat loans usually fall under the category of secured and unsecured loans. You can use either financing option to purchase both new and used boats. Secured and unsecured loans each have their pros and cons.

Secured Loans

Collateral is used to back a secured loan. If you are unable to pay the loan, the lender will take the collateral. With a secured boat loan, the boat is the collateral. So, if you default on payments, you can lose the boat.

Unsecured Loans

The great thing about an unsecured loan is you do not need collateral, meaning it is not tied to any asset in your possession. However, the loan is riskier for the lender, and therefore, they will charge a higher interest rate.

Home Equity Loans

A home equity loan is when you take a second mortgage out on your home to pay for the boat. In essence, your home becomes collateral for the boat loan. The interest rates on a home equity loan are lower than an unsecured loan. However, this loan comes with a lot of risks. If you do not keep up on your loan payments, you could lose your home.

Loan Terms

The terms of the boat loan are very similar to the terms of a car loan. You cover the down payment and apply for a loan to cover the remaining cost of the boat. You also select a repayment term that is suitable for you. If the loan is granted, the lender may offer favorable interest rates based on the quality of your credit.

Repayment Terms

A secured boat loan allows you to apply for a 20-year loan. With an unsecured loan, the loan terms are shorter, usually five to seven years. If you choose a longer loan term, you will have to pay more in interest.

Additional Costs

When creating a budget for your boat, you need to also think about other costs that you need to pay for in addition to the loan payments. These costs are registration, taxes, fuel, insurance, maintenance, and repairs. You may also need to budget for storage, slip fees, towing, and winterizing.

There is a lot to consider when financing a boat. You want to think about what kind of loan you would like to get. The type of loan you choose affects the amount of time you have to pay off the loan. When purchasing a boat, you also want to factor in the additional costs that come with owning a boat. If you are interested in purchasing a boat, visit us at Blue Water Boats, in Cape May Court House, New Jersey where we serve Atlantic City, New Jersey and Philadelphia, Pennsylvania as well.