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Boat loans??.


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Anyone recently deal with a boat loan??

what are we looking at for a used boat?   How long of a loan will a bank allow you to take on a used boat?  Approx rate?

same questions on a new boat??

 

we were at the boat show yesterday and got a lot of info.  We only went to sit in boats to determine what size we really want so we can narrow our search of used boats.  When considering loan rates and terms a new boat at twice the price might be more affordable on a monthly basis.  We are looking at a long term purchase-we have owned our current boat for 18 years-so a long term loan doesn't bother me. 

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Likely use terms will be 120-144 months (10-12 years) at the top end. Look at some credit unions to get a loan such as this. Around 4.5% - 6.5% rate. 

 

For or a new boat, likely can find a 20 - 25 year loan at the longest. Rates will likely be 1-1.5% cheaper. 

 

There is a forum on boat loan rates that you can search on the site as well. There is a lot of in depth information in there. 

 

Good of luck on the boat and loan hunting!

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2 minutes ago, NMMalibuFamily said:

Likely use terms will be 120-144 months (10-12 years) at the top end. Look at some credit unions to get a loan such as this. Around 4.5% - 6.5% rate. 

 

For or a new boat, likely can find a 20 - 25 year loan at the longest. Rates will likely be 1-1.5% cheaper. 

 

There is a forum on boat loan rates that you can search on the site as well. There is a lot of in depth information in there. 

 

Good of luck on the boat and loan hunting!

Here's the forum referenced. 

 

 

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Local credit unions are the first to check then big banks like bank of the west. Terms up to 15 years and if you spend over 50k you can go to 20 years. Don't let the long term scare you just go with whatever you can get the most flexibility out of. You can always pay extra but It's always a bad thing to miss payments. 

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I went with Trident (they have offices all over, except the midwest) at the recommendation of someone else on this forum.  I used the branch in Seattle and things were quite easy to handle remotely.  They were the best for me right now (4.7 for 15) on a new boat (beat my local rates by a full point).

As others have said the amount financed and age (if used) will dictate your rate, which lenders will cary, and length of loan allowed.  Used rates are typically between 1 and 2 pts higher so feel free to factor that in your comparison (and I didn't see anything over 10yrs available)

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Check out Essex Credit for a good rate benchmark with various amounts and loan term lengths since they do business nationally. Their used boat rate looks to be only 0.25% higher than their new boat rates. Never used them myself but others on here have, and you can always use their rates to compare or negotiate with a local bank.

My local credit union's rates are the same as Essex so I'm planning to go with the credit union since it's local and has been easy to work with in the past. I also got some quotes from Key Bank that were just slightly higher (0.25%) than Essex's rates.

I've noticed some banks have a huge rate premium on older used boats and others have a fairly small markup, so do your homework if going used since I don't think it needs to be that much more expensive.

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I got 5.25% with a 15 year term on a new boat back in July '17.  It was done by the dealer through a local bank.  Nobody was jumping to loan me money because of the lack of recent installment loan history even though credit score was 800+ and a large down payment.  Kinda a crappy system where I needed to be more in debt for them to want to loan me more money.  :)  They also only wanted to do 15 year term.  I told them fine as long as it is in writing that I can pay off earlier or make extra payments with no penalty.  So in my contract I must keep the loan 12 months with no penalty for extra payments.  The only reason I wanted the loan was to be able to fund the boat/loan on my terms(most extra/leisure cash is invested).

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8 hours ago, vanamp said:

Are you trying to send this thread into a death spiral?   The OP is just doing his due diligence and looking for info. Let's not go down this road until at least page 2.

Sorry. Borrow away!!🤙

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8 minutes ago, wakebrdr94 said:

Interest rates have been ticking up, not going to be going back down anytime soon

My wife and I were just talking about this.  And it may be why we do not upgrade as quick as originally thought. We are building equity fast in the boat but would still borrow for a while, but it is certainly less appealing as rates rise. 

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3 hours ago, braindamage said:

Sorry. Borrow away!!🤙

 I used to think the same way. Cash for toys.  We paid cash but currently all of our investments are making way more than the boat interest.  If we had taken a loan and invested our boat cash we could potentially be slightly better off today. It's complicated.  My only boat payments are at the gas pump so that's nice.  Plus if we had taken a loan it would have been tempting to spend more and we all know how slippery that slope gets.  I'm 31 so most or all of my adult live we've had low interest rates.  I'll have to change how I think again if they start rising. 

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I always read about how not to use cash as your money makes so much more invested. That's great until the market crashes or at least drops significantly.  Then your investment looks like crap, your are stuck with a loan and with these crashes tend to come employment issues...

I wish the wife and I took more advantage of the last recession.  Got a deal on our home but should have scored some heavily discounted toys too.  We won't make that mistake next time!

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1 hour ago, hethj7 said:

Having a loan and being upside down in a loan are two different things. Toys can always be sold if life throws you a curveball.  

Very true.  Except in the recession type of circumstance, the pool of buyers willing to pay top dollar is gone.  Instead, the market becomes more flooded than usual and it is a price competition...a buyers market.  So a loan you were previously good on could be upside down the next year.  As those who bought new boats in '07 and '08 how resale worked out for them after their '09 job loss, where the new boats were selling for less than they owed on their 2 year old boat! 

I was laid off after the tech crash in 2002.  I spent nearly a year unemployed.  I ate through my funds and racked up debt that I had to deal with for years (though kept my credit good).  I wish I had done things differently leading up to that - and I don't think anyone looking at my finances would have said I was being financially irresponsible.  Had I waited a year and bought my first boat cash (and paid off my car then instead of making dual payments), I would have been in a far better situation.

IMO, if getting a loan, get a 20 year and treat it like a 5 year loan (make 4x the payment monthly).  Insulates you from a job loss somewhat while paying down the principal at a reasonable length of time.

It isn't far fetched at all that a significant market correction - or a full out recession - could happen in the near future.  I will be there with a checkbook ready to pounce on a deal!  

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5 hours ago, Nitrousbird said:

I always read about how not to use cash as your money makes so much more invested. That's great until the market crashes or at least drops significantly.  Then your investment looks like crap, your are stuck with a loan and with these crashes tend to come employment issues...

I wish the wife and I took more advantage of the last recession.  Got a deal on our home but should have scored some heavily discounted toys too.  We won't make that mistake next time!

Yes, because the value of the dollar is going to be great during the next recession.....Said no one ever.

 

Accumulating large sums of cash is about the worst thing you could do right now if you are preparing for a recession.  I'm not saying you should blow it all on a boat but acting like USD cash is some safe haven is ludicrous.

Edited by bamaboy
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10 minutes ago, bamaboy said:

Yes, because the value of the dollar is going to be great during the next recession.....Said no one ever.

 

Accumulating large sums of cash is about the worst thing you could do right now if you are preparing for a recession.  I'm not saying you should blow it all on a boat but acting like USD cash is some safe haven is ludicrous.

http://jlcollinsnh.com/stock-series/   - this is a pretty good read - the market goes up - being afraid of it b/c you might lose money in a recession will likely make you end up poorer. 

and yes holding cash is just a sure way to decrease the value of what you earned. 

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I'm guilty of financing my boat but I look at it like a lease I guess.  I did at least put enough down & have paid enough off that I could easily unload it if I had to.  I used Trident myself & it was painless.

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1 hour ago, bamaboy said:

Yes, because the value of the dollar is going to be great during the next recession.....Said no one ever.

 

Accumulating large sums of cash is about the worst thing you could do right now if you are preparing for a recession.  I'm not saying you should blow it all on a boat but acting like USD cash is some safe haven is ludicrous.

I'll be stocked up on Crytpo I paid too much for & can't unload, so I'm good......:(

  • Like 3
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20 hours ago, NWBU said:

Check out Essex Credit for a good rate benchmark with various amounts and loan term lengths since they do business nationally. Their used boat rate looks to be only 0.25% higher than their new boat rates. Never used them myself but others on here have, and you can always use their rates to compare or negotiate with a local bank.

My local credit union's rates are the same as Essex so I'm planning to go with the credit union since it's local and has been easy to work with in the past. I also got some quotes from Key Bank that were just slightly higher (0.25%) than Essex's rates.

I've noticed some banks have a huge rate premium on older used boats and others have a fairly small markup, so do your homework if going used since I don't think it needs to be that much more expensive.

I used these guys 6-7 years ago when I had a little Baja.  They were pretty good.  I have to admit - they aren't nearly as responsive now as they were then as we look to get into a 'Bu/Axis.

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5 hours ago, hethj7 said:

Having a loan and being upside down in a loan are two different things. Toys can always be sold if life throws you a curveball.  

If the markets collapse then things like boats loose value too. You may have had boat equity one day and be upside down the next. 

I remember in 2008 when all the other houseboats on our dock had a for sale sign. Nobody was buying them. In hindsight maybe my parents should have upgraded but I was in college and they were aging out of boating. Luckily my family was in a "recession proof"  business.  I am not. 

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19 hours ago, wakebrdr94 said:

Interest rates have been ticking up, not going to be going back down anytime soon

Yeah, makes me a little nervous as we are currently looking for a lake house, but i guess a percent or 2 isn't t going to stop us from doing it. 

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