Financing

Thomv

Petty Officer 1st Class
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Feb 26, 2005
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244
I am in the process of securing a loan on a very clean well kept 28 foot boat with only 181 hours. It passed a survey with flying colors. The Nada resale value is around 80K and I plan to put down 20%. The banks I am dealing with are not interested in the Nada values. They are concerned because the boat is a 2006 model which they tell me it would only qualify for a subprime loan of about 6% and they want me to put down about 35%. I am looking for everyone's opinion if this makes any sense.
 

Maclin

Admiral
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May 27, 2007
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Have you looked into companies the specialize in Marine financing for the amounts like that and larger?
 

GA_Boater

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NADA doesn't know pricing for your area, the banks do. Also the lender makes the rules for their bank. Unfortunately just a fact of life.

I guess you can look for a less costly boat. Are you buying from a dealer or a private sale?
 

Thomv

Petty Officer 1st Class
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Feb 26, 2005
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244
Buying from a private individual that is using a broker. The finance companies all specialize in boat loans. I am somewhat okay with the higher interest rate but not okay having to put down almost 40%.
 

alldodge

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Have you looked into companies the specialize in Marine financing for the amounts like that and larger?

Agree with Maclin, don't just go to a bank. Now the companies that specialize in boats may also want it documented
 

Thomv

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Feb 26, 2005
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I did a comparison on pricing for this boat and they all were within 2k of each other. I will reach out to some more boat loan companies.
 

tpenfield

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Finance companies, even ones that specialize in boat loans do not really like to provide loans for boats that are older than 10 years old. That may be your main issue, and while your prospective boat is slightly over 10 years old, they may be cutting you a break, but requiring more down payment.

Perhaps if you can find something 9 or 10 years old, it may be different.
 

Thomv

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Feb 26, 2005
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Finance companies, even ones that specialize in boat loans do not really like to provide loans for boats that are older than 10 years old. That may be your main issue, and while your prospective boat is slightly over 10 years old, they may be cutting you a break, but requiring more down payment.

Perhaps if you can find something 9 or 10 years old, it may be different.

That is exactly what is happening. I am only asking for a 60 month loan, putting down 20% and still having no takers unless I go up to about 35% down. Good grief! Another thing I just learned that had no idea even existed. Thanks
 

JoLin

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Aug 18, 2007
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Boat loans are risky, period. When an owner falls on hard times, the boat loan payment is gonna be at the bottom of his priorities list. A home equity line of credit might solve your issue. I personally wouldn't tie a boat to my primary home, but it's an option.
 

drrpm

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Oct 24, 2008
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707
The bigger down payment will cut the overall cost of the loan significantly. That's a benefit in the long run. If you have access to a credit union you may be able to get a better interest rate as well but finding financing for older used vehicles can be hard.
 

jkust

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Aug 2, 2008
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Sounds like you are in a tough spot. Maybe adjust your thinking to something much newer for which you can get a lower rate or longer term if your goal is to get into a boat and not the terms and length of the loan. My take I suppose is not the norm but if I can't pay cash from excess cash laying around, I don't buy it if it concerns any toys or real estate.
 
Joined
Mar 1, 2005
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It makes sense to me. Obviously most of us don't know your local lender or boat markets, but 6% on a 5yr boat loan with 35% for a 11 year old boat seems right. The lender has substantial risk here that is only mitigated by the cash you drop down at closing. Besides, plunking down 35% shows the lender that you might be one of the faithful borrowers.

Maybe you could negotiate the lender to by offering to increase insurance coverage. I'm sure that they have their minimums requirements, but they might lower the down payment if you increase the coverage amounts. I assume the lender will be named on the policy, so you are essentially trading lower up front costs for higher insurance premiums. I'm not sure it's a smart financial move in the long view, but if you're not concerned it may be an avenue worth exploring. Sometimes a straight conversation with the lender can be fruitful. "35% seems a bit much. What could I do on this deal to lower that, or what would a different boat do to lower the down payment?"
 
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bruceb58

Supreme Mariner
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Mar 5, 2006
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30,454
The lender doesn't likely care about the insurance coverage if it's for at least the amount of his loan. What he cares about is protecting his loan amount. A value of a boat can drop drastically and especially on a long loan like 5 years.

My suggestion is to pony up the bigger down payment if you really have to have this boat or go to a shorter term. 60 months on an 11 year boat is a LONG loan.
 

Toyelectroman

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Dec 20, 2016
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188
not sure if you have access to USAA but they approved my boat loan and the boat was 15 years old.
 

boatman37

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May 14, 2015
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Try lightstream.com. they are a subsidiary of suntrust. i went through them for my boat. very simple process. i think i am paying about 5.9% for 7 years but it is a no collateral loan and the payment is taken right out of my account.
 

RGrew176

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Mar 20, 2002
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2,089
Try a credit union. I bought my Carver a 1981 model in August 2015. The boat was 34 years old at the time. No bank would even look at it. I put down 50% and the credit union only needed a copy of the survey which placed a value on the boat. Of course that boat did not cost as much as the one you are attempting to purchase so 50% down may not be possible in your situation.
 

thumpar

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Jun 21, 2007
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6,138
I got a loan for my current boat with 100% financing. It was 19 years old at the time. They did charge an extra point because of age but that was still only 3.99%. I bank at a credit union.
 

GA_Boater

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Credit unions are one of the most over looked places to finance. Highly recommended to check with one of them.
 

boatman37

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May 14, 2015
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I tried 2 different credit unions around here and both would only give loans on boats up to 10 years old and they were both about 8% interest (i think they wanted 20% down too). Had nothing to do with my credit as I never told them my name. Guess it depends on where you are located? Lightstream was simple. i hadn't even picked out a boat yet. it is more of a 'personal' loan that they take your word on that you are buying what you say you are buying. but they primarily deal with higher incomes and higher credit scores (low risk)
 

alldodge

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I've tried the CU's before, and for the two times I tried years ago, they were higher on interest then the bank.
 
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