Boat Loan Credit Basics

By Robin L. Harris

Marine loans are readily available to credit qualified individuals who take advantage of the present low fixed rates for both used and new boat loans. There are basics you need to know.

Credit Score: 700+ is the benchmark and rates are a little higher for lower scores and lower for higher credit scores.

Loan Terms vary according to the amount financed. At $10,000 / term of 120 months, $25,000 / 180 months and $75,000+ / 240 months. You may want a lower term to pay down your loan faster, but you and your finance provider can go over all the options and get you to a term and payment that fits your budget.

Debt ratio: This is the total of your present monthly payments compared to your monthly gross income. If your payments for your mortgage, car loan or lease and any credit card debts total, for example, $2,000 and your total monthly income is $6,000. Then your debt ratio is 33%. When you add a payment for a boat loan of (example) $300. per month then your debt ratio would be 38.3%. The maximum lenders will consider is 40%, so speak to your finance people first, to discover just how much boat you can buy.

Down Payment: You can expect to pay a down payment of 10% or higher, depending on the price of the boat. It’s a good idea to get pre-qualified before you go boat shopping – it shows you’re a serious buyer and will help with your price negotiations, whether you are buying from a dealer, through a broker or directly from a private party.

About the Author: Robin Harris is the owner of Harris Marine Financing in Stevensville and a marine loan expert. She can be reached at 410-643-7097.