Be Prepared For Your Boat Loan
Getting any type of loan can be a frustrating experience, but this frustration can be heightened with boat loans. The banks do want to loan the money, but since a boat loan is seen as a luxury they can be stingier than with something else. There are a few pitfalls that you may run into, but with a little bit of information the chances of a problem are greatly reduced.
Once you know that you will need a boat loan, it’s a good idea to pre-qualify. Go into the bank and tell them you are looking into boat loans. Point out that you want to know two things, how much they are willing to lend and how much of a boat’s value they will lend. Most of the time they will not offer to lend the entire value of the boat. Don’t forget that the value and the asking price can be drastically different.
If you have already found a boat that you wish to buy, write down all the details. Any identifying number that you can find on the boat needs to be noted. If the boat has an outboard motor be sure to write down those numbers as well. Do the same with a trailer, if the boat comes with one. Note the length of the boat, if it is painted or galvanized, steps, fenders, and anything you can think of. Also factor in accessories. When the bank is considering the boat’s value, this is a very important aspect. No matter how trivial it may seem, write it down. If you forget something the bank may come up with a lower than accurate value and the boat loans you get offered won’t be enough.
Now that you have your information, go home and research. The website, NADA.com is great for looking up the particulars on your boat. When you put in the model number and year remember that even if a boat was manufactured in 2004 it may be a 2005 model. Learn to read the model number, for example a T in the number means the boat has a tunnel. This adds to its value. Also know exactly what the website means for the different options. As an example, when nada.com asks about a fire extinguisher you may be tempted to check it if your boat has one onboard. But this is only asking about built in fire extinguishers, that erroneous value is not something you can likely afford. All of this will affect boat loans.
Make sure the boat’s value is correct and go to the bank. They will go through the same process for the value that you did, you should make sure they arrive at the same number. Otherwise your boat loan will be too low and you will have to come up with more money elsewhere. With any luck you will be approved for the exact boat loan you need.
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