About 71 percent of the earth’s surface is covered in water and it’d be a shame if you never got to enjoy this in your boat because of bad credit. Buying a boat is among the many undertakings in life that will give you a lot of fulfilment. Not everyone has the opportunity to go fishing or take their boats on a recreational tour somewhere in the Pacific’s. Owning a boat will, therefore, give you the freedom that only a few get to enjoy. But without the funds, these are but mere dreams. Finding the means to finance a boat purchase with poor credit may seem harder compared with other types of financing. This having been said, here’s how to get a boat loan with bad credit.
1. Secured Boat Loans
If you aspire to own a boat but have been turned down by various financing institutions because of your bad credit, then you know all too well how frustrating this can be. Not to worry though, there’s a solution for that. You’ll need to find a lender who will offer you a secured boat loan. A secured loan means that the lender will use the purchased boat as collateral. You’ll not need to worry about forfeiting your home or car as collateral. However, you’ll need to show proof of income or alternatively proof that you’ll manage to pay the monthly installments. The caveat with secured loans, however, is that these loans have a longer repayment term, higher loan limits, and you also risk losing your boat if you default. If you’re therefore comfortable with the risks and a higher loan amount, then it’s all up to you.
You may also be asked by the lender to invest in an insurance policy. It’s actually one of the best ways to protect your dear investment. Eric Frid from SeaDream suggests including an insurance policy in your boat purchase decision because it will help to cover your boat from accidents, vandalism, theft, and fires. This is because you don’t want any of this happening to your boat knowing all too well that it’s from borrowed money. The last thing you want is to be left paying a debt for a stolen or damaged boat that you will be unable to use anymore.
2. Dealing with a Marine Lending Company
Most marine lending companies will act as middlemen between the financial institution and a borrower. They are financial service companies that secure your boat financing through different financial sources including banks. The best thing about boat loans from a marine lending company is that, while they may charge you a smaller service fee for acting on your behalf, the boat loan attracts the same repayment terms as personal loans. In addition to this, you’ll pay lower interest rates and you’ll also be working with a financial service company that understands your needs and the boating business. The requirements include a down payment of not more than 20% and the boat as the collateral.
3. Peer-To-Peer (P2P) Boat Loans
Peer to peer lending is a type of borrowing and lending service that helps to connect borrowers and lenders via an online platform. There are so many P2P lenders out there, but finding the right one will help to provide a smooth sailing process. However, it can take a bit of time to find a lender because after listing your boat loan on the P2P dashboard, you’ll have to wait until a lender spots your request. Once your request has gone through, you’ll be linked with the lender who’ll want to know your reasons for purchasing a boat among other things. With most P2P lenders, they allow you to select the terms of your loans which include a flexible repayment module and fixed interest rates. Now, since you’ll be on an online platform, you must consider the following:
Your data security
Are there additional benefits
The interest rates
The loan repayment term
The repercussions of defaulting
The duration of time it takes for you to get the money
4. Credit Unions
Most, if not all credit unions are nonprofit financial institutions that provide low-interest rate loans to borrowers who have a bad or average credit history. Credit unions will offer secured loans on both new and used boats. But then again, you’ll need to be a member of a credit union to enjoy the membership perks and privileges.
5. Other Alternatives
If you’re not in a hurry to own a boat, then various
incentives might just help, especially if you’re still undecided on making a long
term financial commitment. They include saving up for your dream boat and
joining a boat club. When
you join a boat club, you’ll be required to make a monthly contribution that
will allow you access to a fleet of boats whenever you need one.
You now don’t have a reason to keep standing at
the bay admiring people’s boats. The above tips will provide you with what you
need to know to make your dream of owning a boat a reality even with bad
credit. And to answer our introductory question, “Can I Get a Boat Loan with
Bad Credit?” definitely!