How to Finance Your Boat Purchase

When it comes to buying a boat, many people opt to use financing to help them with their purchase. Most of us do not have the ready funds to purchase a boat with cash in hand, so financing helps to get the boat you want at a price you can afford. Here’s what to know about boat financing.

Create a Budget

First, before you do anything else, sit down with your finances to determine how much you can afford to spend on a down payment. Down payments are typically 10% to 20% of the total sticker price of a boat. You’ll then want to determine how much you can pay towards a monthly loan repayment, while also factoring in your monthly boating costs, such as insurance, parts, maintenance, storage, and fuel.

Know Your Loan Types

There are two primary types of loans you may be able to get for your boat: secured and unsecured. Each one is a little different, so it’s important to know the difference between them.

Secured loans make use of your purchased boat as collateral, which means that if you default on (stop paying) your monthly loan payments, the boat may be repossessed by the lender to make up the loss. Secured loans do offer higher borrowing amounts and lower interest rates, which is nice, although they can be harder to qualify for.

Unsecured loans do not require any security in the form of collateral, but that doesn’t mean there won’t be consequences if you fail to pay them back! Instead of repossession, you may find your paychecks garnished or you may receive a subpoena for the money you owe. Unsecured loans have lower borrowing amounts and higher interest rates due to this risk.

Find a Lender

There are a number of places where you can locate a lender for your boat purchase. You may want to start with the bank or credit union where you already maintain one or more checking or savings accounts, as these businesses typically offer loans for a variety of purposes, including marine loans.

Another great place to check for loans is with a specialized marine lender nearby, which can offer you a more customized experience, since they make it their business to know everything about boat loans specifically.

Visit our location in Lake Elsinore, CA, today to check out our array of new and used boats for sale. Our boat financing department is here to help you figure out how best to finance your purchase, so bring us all your questions! 

Pacific Freedom serves our Southern California customers in Long Beach and Temecula.