Even if you have the funds to buy a yacht right now, you should think about your financing alternatives. Financing might help you keep your cash flow in check, but it can also let you get into a more costly “dream boat” that would otherwise be out of reach.
And today’s boat finance is very different from what it used to be. Boat loans used to be for a shorter period of time, but now they’re more popular, with durations ranging from 10 to 20 years. The interest rates are at an all-time low.
And these days, down payments might range from zero to twenty percent of the purchase price.
However, keep in mind that if you can afford shorter terms and larger down payment, you’ll likely obtain even better interest rates. Larger loans generally have better interest rates, so buying the more costly boat can save you money in certain respects.
That’s one way of looking at it, at least. But, in our opinion, all of these features of Boat finance Australia and boat loans are secondary to the bottom line:
you, buddy, are about to receive a brand-new boat, and your life is about to get a whole lot better. That’s what we refer to as “favourable terms.”
You have three options when it comes to financing a boat:
- Make a finance arrangement with your boat dealer.
- Make an application for a loan from your bank.
- Take out a loan from a lender that specialises in maritime lending.
Because dealers have lots of expertise putting up boat loans through Business Finance Australia, most consumers just work via their boat dealer. Furthermore, it is in the dealers’ best interests to ensure that the procedure is seamless, quick, and painless.
Others, though, will finance the boat using a home equity line of credit, a second mortgage, or a personal loan from their bank. This can result in a cheaper interest rate, but the drawback is that it adds paperwork and makes the transaction more complicated.
It’s worth examining, though, because arranging the purchase this way might result in some tax benefits.
If it appears to be straightforward, it is. Because the majority of new boats are acquired with a boat loan, well-established procedures are in place. You’ll have three main options when it comes to who you borrow money from:
- Getting financing through your yacht dealer is typically the best option. Every day, boat dealers arrange boat loan Australia, so you’ll be dealing with someone who understands the ropes, has established contacts with lenders, and wants to complete the process as fast and smoothly as possible. They can generally provide advice for insurance setup as well.
- Take out a home equity loan or a second mortgage from your bank – Some purchasers with a lot of equity in their house find it beneficial to take out a home equity loan or a second mortgage from their bank, either to receive a cheaper interest rate or for tax reasons. However, keep in mind that this will lengthen and complicate the deal.
- Take out a loan with a lender who specialises in marine finance – Because financing a boat differs from financing other items, certain lenders specialise in it. There’s even a group called the National Loans, which is made up of lenders who know all.
So, before you move ahead with the boat loan Australia, make sure to consider all of these things.