Getting a loan to buy a yacht is similar to getting a car loan, the only difference will be in selecting the loan amount. You will have to do your research to choose from the options that are available, and the interest you get on your instalments. Getting a yacht loan is pretty easy, and these tips will help you do make better choices.
Get the right documents and reports
The first thing you have to do is collect all the necessary documents. Do not attempt forgery for fulfilling your dream. If you do not satisfy the criteria to buy a yacht, you can make better investments, and can always rent a yacht for your sea voyages. But with the right documents, you will be able to find out how much loan you can take and with what interest rate and term will apply to that money. Make sure that you have these criteria fulfilled.
- No bankruptcy charges in the past.
- Should own enough assets.
- Recorded current income.
- Employment duration.
- Time of stay at the current residence
- Net worth.
Get a pre-approval
Getting a pre-approval means you are securing a major part of your chances of getting a loan. Pre-approval is usually a letter from the lender which states the assurance to the borrowers of a certain loan amount. Pre-approval will give you an idea about how much you can take out so that you can go shopping and find out your options. You can also get a better bargain, knowing how much you can surely spend. It also helps in setting a budget and makes sure that you do not spend extra.
Consider the operating expenses
Purchasing a boat is one thing and maintaining and operating it is another. You can get a large cruiser but then operating and maintaining it can swipe off your bankroll quicker than your voyages. Getting a smaller boat can help in saving on your usage cost. Before you apply for the loan, make sure that you decide what kind of boat, yacht, or cruiser you want and can maintain.
Offer the lender more security
Assuring your lender his money can help you get bigger loans at better interests on returns. The lender only wants his money back and will be only interested in getting an assurance that you will be able to repay the loan. A lender can seize the boat if you fail to repay the loan, so it is better that you have enough to assure the security for their money. You can use your cars, secondary homes, and other assets as security.
Get a new boat or a used boat
Getting a loan on a brand new or close to new boats is easier than buying old and used boats. The lenders will approve your loan much quicker with better interest rates if you plan on buying a new boat. If you still have plans on getting a second-hand boat, make sure that it is less than five years old and works good enough to be considered a security for lenders.