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How to go about getting a boat loan

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How to go about getting a boat loan

We all like luxury products – but paying for them – not so much. Owning a luxury item such as a boat definitely has its perks. While many might argue that owning such an item is a waste of money, the good news is that you don’t need to be a millionaire to buy one.

Applying for leisure financing can be a long and strenuous process – but if you enjoy spending time at the ocean, then all the hassle will be worthwhile. We’ll give you the tips you need to get leisure finance and, potentially, land the best deal for your lifestyle and budget.

Furthermore, liquid assets have a high depreciation rate, especially in the first couple of years, which is why it would be wise to look for the best interest rates offered and reasonable pricing. The interest rates you will receive from different lessors will not be the same, even though they are all calculated using your credit record. Therefore, take your time to shop around and follow our extensive steps below for a hassle-free application process.

 

Know what leisure finance is

Do you know what leisure financing entails? Leisure financing refers to the funding of leisure items such as boats, caravans, mountain bikes and golf carts. These assets are costly, and that is why many people opt for financing. So, when applying for financing, your lessor will look at your credit record and other determining factors to approve your loan.

What you need to have when applying for leisure financing:

  • Copy of your barcoded ID card.
  • Skippers licence.
  • Proof of income.
  • Proof of residence.

 

Have a positive credit score

Your credit score is the main factor in the approval of your loan. Many factors are used to calculate your credit rating, for example, the number of revolving accounts you have under your name and whether or not you make your minimum payments each month.

In essence, your score gives creditors an outline of your track record in paying off your debts. Acquiring a loan will require that you have a positive credit score. This means that you have to make all your debt repayments monthly and use less than 50% of your total credit.

Regularly checking in on your credit score can be a challenge as many people simply forget, but if you want to be approved for your future loan applications, simply forgetting to keep tabs on it is something you cannot afford to do. Not being able to access credit when you are in need of it can be frustrating, but maintaining a high score is important for your future.

 

Various elements lenders look at apart from your credit score

To be approved for any financing, your credit score will determine your loan approval. If you have a negative credit score, the likelihood of you being approved is far less than someone who has a positive credit score. Although your credit score weighs heavily on your assessment, take note that your credit score is not the only component that counts in your favour. Many creditors “dig” deep to determine if they should grant you credit or not.

 

  • Employment history: one of the many things lenders look at is your employment history. Your employment history gives them a perspective of your income stability and risk. If you have been with your employer for more than two years, that usually indicates that you are stable and not a risky applicant. On the other hand, if you are a person who regularly hops jobs, they will flag you as a risky client and potentially deny you credit or increase your interest rates to compensate for the added risk.

 

  • Current residence: creditors look at how long you have lived in a particular residence. The longer you live in one place, the greater the chances of you being approved for financing. It tells the creditors that you’re stable and able to make your mortgage fees.

 

  • Cell phone number: you may be asking yourself how your cell phone number is used to assess you as an applicant. Well, it is also used to, once again, verify your stability. For example, lenders conduct cross-checks to see if you have used the same number for previous loan applications. If you list different numbers, they will assume that you have failed to pay for prior bills, and therefore needed to change your cell phone number. So, the longer you keep to one cell phone number, the better the chances of being approved.

 

Work out your budget

Having a set budget should go without saying, especially when you’re planning to buy a leisure asset such as a boat. Your budget will outline your affordability range and, in turn, help shape your final decision. Admittedly, you will not know your interest rates before applying for financing, but that shouldn’t deter you from crunching the numbers.

Many lenders have online platforms that you can use to calculate your repayment fees. This will give you an estimate of how much you should expect to pay over a specific period.

When calculating your repayments with the leisure asset finance calculator, you have free reign to adjust the interest rates and “pay” over a specific duration of time. It is one of the most suitable tools to use when you’re unsure of your budgeting for the upcoming years.

 

Make sure you are pre-selected for your loan

When you are pre-selected for a loan, it leaves you at ease when shopping around for a boat. Many people often assume that being pre-selected means that they will get the loan, and sometimes that is the case, but sometimes it is not. Being pre-selected simply means that you have met the lender's requirements and will hopefully move onto the next stage.

 

Lastly, shop around

Everyone loves a good deal. If you’ve been looking at one particular catalogue, you may have been limiting yourself. Although dealers will provide costs within the same price range, they are never the same. Remember that they are competitors, and are thus competing for your attention. You never know, one dealer may be running a seasonal special and one may not. Therefore, take your time to surf the internet and don’t be hasty to make your decision.

 

Final thoughts

Buying a boat can be a hassle, and coupling it with leisure financing can be overwhelming. Take the stress out of boat hunting by planning ahead. If you now that you will be purchasing a boat soon, why delay the process? Water recreational sports are summer activities; therefore, try and buy your boat during off-peak seasons for the most affordable deal. 

 

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