Financing a new boat may be as easy as walking into your bank or credit union and filling out an application. However, you should shop around for alternative financing that may be cheaper. Banks view boats as luxury items, and they know that in tough economic times people are more likely to walk away from a boat loan than their home mortgage. That means boat loans are likely to carry higher interest rates than home mortgages or even automobiles.
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Difficulty:
Moderate
Instructions
1
Check your credit report and score. Few banks or credit unions may be willing to approve you for a boat loan if you're struggling to keep up with your current obligations. Get your credit report online at www.AnnualCreditReport.com. Follow instructions on the credit report for ordering your credit score separately. The Federal Trade Commission established Annual Credit Report to offer free reports as required by federal law. Visit www.ftc.gov/freereports for more information about credit reports.
2
Compare your credit score with established standards for being approved for credit. According to Bankrate.com, a credit score of 620 is the cutoff for good credit. Scores of 750 or higher are necessary for the best rates on loans. Review your credit report for opportunities to raise your score. Possibilities include making payments for any accounts currently showing as delinquent. Also resolve any old debts that are listed as having been charged-off or sold to debt collection companies. Contact the creditors or debt collectors to make payments, and wait about 60 days for your credit report and score to be updated.
3
Shop around for the best rates in your area for boat loans. Visit with a loan officer at your bank or credit union. Tell her your credit score, and ask what interest rate you would likely receive if approved. Also ask if placing a larger down payment instead of the minimum could result in a better deal. Take the notes from your meeting and contact other banks and credit unions in the area to ask about their rates.
4
Apply for the boat loan from a local lender offering the best rate. Alternatively, consider dealer financing, tapping into existing credit lines that you own or borrowing money from friends or family.
