Four Tips for Getting Great Boat Loan Rates

With a good boat loan rate, you can ultimately save money over the life of your loan.  While the exact rate a lender offers is ultimately up to that lender, some research and careful attention to your own finances could lead lenders to offer you a better interest rate.

Clean Up Your Credit History

As with any loan, a boat loan lender will be checking your credit history - so you will want to be sure that it is free of errors or confusing information.  Fortunately, you can request a free copy of your credit history from each of the three credit bureaus once each year. If you find any misleading or outdated information, you can contact the credit bureau and request they correct the information.

If you have a good record with a creditor, you definitely want your record to reflect it.  However, not every creditor reports information to the credit bureaus on time, so check your report to see if there are any creditor's histories missing from your report.  If they are, ask these creditors to update your account with the credit bureaus.

Offer A Higher Down Payment

The more money you can pay up front, the less money the bank need to lend you - which means, the less risk the bank faces.

Check All Of Your Expenses

Boat loan requirements tend to be stricter than requirements for car or home loans.  One point your bank is certain to check is your debt-to-income ratio, or DTI; this is a comparison of your income each month to your monthly debts.  Typically, boat loan lenders require a DTI of about 40%, including the payments for the loan itself, as well as any expenses relating to the boat - docking fees, estimated fuel costs, and the like.  Take the time to calculate what your DTI would be after you purchase the boat, and see whether there is any way to reduce your other monthly expenses. The lower your other expenses will lead to a better DTI and thus the better the loans rates could be.

Check Several Lenders

Every bank and every lender sets its own interest rates, and each uses different standards.  What some banks consider an acceptable level of risk, another bank may consider dangerous. Take the time to check rates from a number of banks and educate yourself in the options available to you.

 


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