A traditional boat loan requires cash and the boat as collateral. Today private loans are also called for the purpose of financing a boat purchase for boat loans. Here we go over what these loan forms mean and how they differ.
Financing a boat purchase through a private loan is very common. If you have no money saved, you can instead settle your boat financing with a private loan, which is the type of loan Advisa provides.
When you settle your boat financing with a private loan, there are no restrictions at all. You do not need to invest any cash and extra fees are rarely added to your loan. If you want to sell your boat, you can do so without having to go through the bank or boat dealer.
You can use a private loan as financing for the entire boat purchase or to finance part of the boat with the loan. You can also use it to buy the accessories and spare parts needed to get a boat in condition. However, as with all loans, mismanagement can lead to payment complaints and debt collection, which has a negative impact on both your finances and your future opportunities to borrow money.
Summary of private loans for the purchase of a boat
- No cash deposit required
- No requirement to buy through an authorized boat dealer
- No insurance or boat model requirements
- Smaller fees often lead to lower effective interest rates than on boat loans
- You can sell your boat whenever and however you want
A traditional boat loanmeans that the boat is used as collateral and the object’s expected depreciation over time is taken into account when amortization plan and interest are set. This type of boat loan requires that you finance 20% of the purchase with a cash deposit and the loan amount itself will then land at 80% of the boat’s cost. Replacing your old boat can in some cases replace the cash contribution. A boat loan is usually taken through your boat dealer. You can also take it directly from a bank. Often there are requirements from the lender on boat model and insurance. The big advantage of a boat loan is that you often get a very low interest rate, just because you go in with your own money and that the bank always has a security in the boat.If you later want to sell the boat, you must have the lender’s consent. However,
Traditional boat loan summary
- Requires 20% cash deposit
- The boat’s expected depreciation affects your loan terms
- The lender has the boat as security
- Requirements for boat model and insurance
- If the boat is sold, it must be done in agreement with the lender
- Favorable interest rates (but watch out for the fees)