Yacht Financing Options | Yacht Buyers Guide
Yacht Financing Options | Yacht Buyers Guide
Have you decided to take the plunge on buying a new or pre-owned yacht? If so, don’t let the thought of financing a yacht scare you. Arranging to finance a yacht is not much different than financing a new car. A few reasons why you may want to consider getting a yacht financed are realistic down payments, longer financing terms, and lower monthly payments.
Financing Options for Your Yacht
Whether you purchase a pre-owned yacht or new yacht, there are options available to you when it comes time to finance a yacht. These options include financing through your yacht dealer, financing through your bank or credit union (if available), or finding a marine finance company that specializes in loans for boat purchases.
Bank Financing
While most people choose to work with their yacht dealer for the convenience and hassle-free experience, you could choose to finance your yacht by taking out a home equity line, second mortgage, or a personal loan from your bank. Some reasons people choose this route versus working with a dealer is due to lower interest rates. But, there is a downside; going this route is much more complex and could result in hours of paperwork.
Marine Lending
Working with a marine finance company is another option. Typically, marine finance companies specialize in boat loans and can work out a deal with lower down payments, longer financing terms, or lower monthly payments. However, this is not always the case. It’s important to shop around to ensure you are getting the best deal.
Financing Through Your Yacht Dealer
One of the more convenient options when choosing to finance your yacht is to go through your yacht dealer. Unlike banks and marine finance companies, your yacht dealer understands the marketplace and can typically offer some of the most competitive rates available. Not to mention, it is in their best interest to ensure the finance process goes as seamlessly as possible. They work on your behalf with partnered third parties to ensure everything is situated, saving you time and ensuring your peace of mind. Also, working with your yacht dealer could have its advantages. If you’re purchasing your boat through a dealer, they may have a dealer-fianced loan available that could be comparatively better.
Qualifying for a Boat Loan
Once you determine who to go through, you might want to find out what your payments will look like. To get a good idea of your monthly expenses, utilize our boat loan calculator here. The next step is qualifying for a loan. Qualifying for a boat loan depends on a few factors including, your credit, debt to income ratio, job and homeownership stability, and net-worth. It’s a good idea to get pre-qualified before you start your boat shopping experience. Some generalities that apply to the vast majority of boat loans include:
- Interest rates generally go down as the loan amount goes up.
- Interest rates generally go down as the term of the loan goes down.
- Higher loan amounts can usually be stretched over longer periods. In most cases, boat loans range from four to 20 years.
- Usually, the lender will be basing a boat loan on a 10- to 20-percent down-payment. That said, there are some no-money-down deals out there.
- Often, you can roll the expenses of accessories like electronics, trailers, and even extended warranties into a boat loan. Just be sure to pick out the complete package you want ahead of time.
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Most lenders will be looking for credit scores of about 700 or higher. You can get a boat loan with a lower credit score, but expect that you may have to pay a penalty in the form of a higher interest rate or a larger down-payment.
Weigh Your Options
Whether you have the cash or not, it’s essential to weigh your boat loan options. Financing can not only help you maintain liquidity, it can also help you obtain a more expensive dream boat in the future. Financing a yacht today typically sees terms of 10-20 years. Interest rates are quite low, and down payments can range from no money down to 20%, depending on your qualifications. Of course, if you want a more favorable interest rate, a higher down payment is required, along with a shorter term. No matter which route you decide to take, one thing is for sure, your most favorable outcome is getting to go home with a new boat to create memorable experiences with family and friends.
Financing With Galati Yacht Sales
At Galati Yacht Sales, we understand that the best times are the time spent out on the water. That is why we ensure our finance process is hassle-free and best suited for your needs, to get you out on the water faster. Our qualified business team and certified sales professionals work diligently with you to ensure all paperwork is situated and everything is in order. Marine dealers such as ourselves understand the marketplace and the subtle differences when it comes to marine lending. Our financing team has well-established partnerships with some of the largest marine lenders in the industry that offer aggressive rates and terms that fit best for you.
Here at GYS, we also offer financing with no loan origination fees, closing fees, application fees, or points. Our finance specialists are available throughout your entire sales and closing process to answer questions and provide the “red carpet” customer service experience that we are known for. Plus, we are your convenient one-stop shopping center. After financing your yacht, we offer financing insurance, extended warranty, USCG documentation, state titling, and registration.
