1.Getting a boat loan, used to be a bit easier than it is right now, however if you follow the tips in this list you should increase your chances to get a loan and be able to afford that boat.
2. Check your credit score with all three agencies: Equifax, Experian, and Transunion (Each agency will give you a different score, and may even find different accounts). It is important that you run each one and check for accounts that you did not open or charges that you did not generate. If you find any you will need to dispute them with all three agencies.
2. Improve your FICO score. Your FICO score measures you financial stability. You can improve your score by not using all of your credit space, and especially by having zero balance credit cards, paying your bills on time, and reducing the amount of debt you carry.
3. Put some "skin in the game." Lenders like to see that you have financial motivation to keep from defaulting on the loan. By putting down 20%, the bank sees that you have a motivation to keep repaying the loan, and if you are able to put down more than 20% many times lenders will be able to give you better terms.
4. Banks take more than just credit score and income into the criteria they use to assess risk. Previous boat loan experience is a positive, or at least comparable borrowing experience. They will also look into your employment history, previous payment history, and cash reserves.
5. Gather your financial documents. In order to qualify for a loan, a lender will want to verify that you have the means to both pay back the loan and take care of the boat, including maintenance, insurance, dockage, and fuel, while you own it. In order to prove your financial status, you will need to provide the lender with two years of tax returns, current year to date income, and a balance sheet of current investments, cash, stocks, annuities, IRA's, 401k's, etc. Also, remember that many lenders will require you to insure the boat until you have paid off the loan, even if your state does not require insurance.
6. Know the debt to income rations that banks use to qualify loans. Banks do not usually loan to anyone who's debt and expenses exceed 40% of their income.
7. Choose the right representative. A yacht loan broker is an independent advocate that can connect you with every bank that provides boat loans (not all do), the criteria you should use when choosing your broker should be if they have a long standing, strong relationship with the banks.
2. Check your credit score with all three agencies: Equifax, Experian, and Transunion (Each agency will give you a different score, and may even find different accounts). It is important that you run each one and check for accounts that you did not open or charges that you did not generate. If you find any you will need to dispute them with all three agencies.
2. Improve your FICO score. Your FICO score measures you financial stability. You can improve your score by not using all of your credit space, and especially by having zero balance credit cards, paying your bills on time, and reducing the amount of debt you carry.
3. Put some "skin in the game." Lenders like to see that you have financial motivation to keep from defaulting on the loan. By putting down 20%, the bank sees that you have a motivation to keep repaying the loan, and if you are able to put down more than 20% many times lenders will be able to give you better terms.
4. Banks take more than just credit score and income into the criteria they use to assess risk. Previous boat loan experience is a positive, or at least comparable borrowing experience. They will also look into your employment history, previous payment history, and cash reserves.
5. Gather your financial documents. In order to qualify for a loan, a lender will want to verify that you have the means to both pay back the loan and take care of the boat, including maintenance, insurance, dockage, and fuel, while you own it. In order to prove your financial status, you will need to provide the lender with two years of tax returns, current year to date income, and a balance sheet of current investments, cash, stocks, annuities, IRA's, 401k's, etc. Also, remember that many lenders will require you to insure the boat until you have paid off the loan, even if your state does not require insurance.
6. Know the debt to income rations that banks use to qualify loans. Banks do not usually loan to anyone who's debt and expenses exceed 40% of their income.
7. Choose the right representative. A yacht loan broker is an independent advocate that can connect you with every bank that provides boat loans (not all do), the criteria you should use when choosing your broker should be if they have a long standing, strong relationship with the banks.
About the Author:
Now is a great time to buy a boat. There are great opportunities to purchase boats at that represent an great value, or may have been previously unaffordable. Take the time to prepare in advance, get "pre-qualified" for a boat loan so you know that boat financing will not affect your negotiations or timetable to purchase.
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