3 Tips Before Submitting Your Boat Loan Application
Ahoy there! Do you have plans to buy a boat this summer? Before you can hit the water on the Ohio River or at East Fork Lake, you need to work out how you’ll finance the purchase. If paying in cash is out of the question, you may be considering a boat loan. Below are a few tips to consider so you don’t get caught in the wake of a poor financial decision.
Tips for financing a boat
Check your credit score
Your credit score is one factor lenders use to determine your creditworthiness and, as a result, the terms and rates they’re willing to offer you. A higher credit score opens the doors to better rates and potentially lower monthly payments, so consider taking the time to repair your credit prior to submitting an application for a boat loan. If your credit score is already in ship shape, though, you can start the application process online in minutes.
Calculate a down payment
Similar to home loans, many aspiring boat owners try to put 20% down to reduce their monthly payment. Use an online vehicle payment calculator to see what monthly payment you can expect based on the loan term, interest rate, and how much you plan to put down. If you’re not able to put 20% down, you can potentially reduce your monthly payment by selecting a longer loan term. Or, you can commit to a savings goal and plan to apply for a loan later in the year.
Pay down debt
It’s important to factor in any outstanding debt you have. Lenders will compare it to your income to gauge whether you can reasonably afford to take out a loan. In paying down debt, you’ll ensure you have more funds to direct toward payments and put lenders’ minds at ease.