Buying a boat doesn’t have to be a painful process. For most people, getting a loan for a bass boat is the best way. Costs for new boats vary depending on size and make, but many boat manufacturers and dealers have boats for every budget. If a new boat isn’t in the cards, used boats offer a lot of value and in today’s markets are a great option. BassBoatAds.com is a great place to take a look at the available used boats on the market at any given time. At RecLending.com, we work with boat loans every day and our business is centered in financing for the Bass Boat Industry. Even with well over 30 years of financing experience, we learn something about boat loans every day. We would like to give some common questions and misconceptions we hear and try to explain them.
- “Banks aren’t lending money on boats right now” – We are writing boat loans every day in our business. Part of the problem is that deals are not presented properly by some dealers. Deals are often turned into the wrong lenders and declines start to mount. Banks are in the business of making money with loans. Boats are good loans for banks and they want them.
- “I had a few problems; I will never get a boat loan” – We do work with a couple sub-prime lenders that will take bruised bureaus. These lenders do have higher interest rates and like to see 12 months of clean since the problem. These lenders do report to the bureau so even though the payment may be a bit higher, you’re a boat owner and re-building your credit.
- “How much down payment do I need?” – Down payment is always a good thing. Trade equity and cash down always help a deal go together. The amount of down is, in part, based on the “loan to value” ratio. The book value is important to the deal. Lenders will never lend more than it’s worth regardless of down payment amount. Lenders want to be sure they have an equity position in each deal.
- “How old of a boat can I get a loan on?” – Most lenders like 10 years and newer. We do use one lender with a classic program that will go to 15 years old. They do charge higher interest rate and again a strong book value does help. Book value is important on older boats as well.
- “Used boats have a higher interest rate” – This is true with some lenders, but not all.
- “What score do I need to get a boat loan?” – There is no magic number that works every time. We have gotten loans for people in the mid-600’s and had people in the high 700’s be turned down. Things like debt to income, amount of credit card debt and loan amount history all count as part of the picture.
- “I just got a car loan, I should be good” – Car loans have a bit lower burden of proof than a toy loan. As much as we hate to say it, a boat or RV is not a must. You need a car to get to work and the used car market is much larger than the used boat market. Just because it is a bit tougher, boat loans are written every day.
- “I am shopping for the best financing deal” – Be careful. We often see bureaus full of credit pulls and several lenders burned. Some finance people use the shotgun approach to finding a lender. We use the rifle shot. Sometimes it takes an additional shot but the least amount of activity on your bureau, the better. We also can do a “soft pull” if you’re just starting to shop.
These are just some of the things we hear every day. Yes the boat loan business is different than it was several years ago but we see that as a good thing. Financing is a specialized field. Make sure you are dealing with someone who has a track record of success and knows the industry.
Ken & Todd at RecLending.com
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