Being able to climb aboard your own boat and sail off into the sunset is a dream for many.
Understanding how boat loans work and which is best suited to your nautical needs can help turn that dream into a reality.
Secured Boat Loans
A Secured boat loan is secured to an asset – this asset is known as collateral. When you apply for a secured boat loan, the provider will ask you to protect the value of the outstanding loan amount by placing a lien against an asset.
In the case of non-traditional lenders, such as boat dealers or manufacturers, they will allow you to use the boat being purchased as collateral. If you fail to meet the repayment agreements for the loan, they can repossess the boat to cover the remainder of the money outstanding.
Often a secured loan will offer a lower interest rate than an unsecured loan, although in some cases, lenders may increase rates over the period of the loan as the value of the asset decreases.
Secured boat loans are usually used to cover the purchase of a new boat and may require a downpayment or deposit (much like a car loan would). They aren’t designed to be used to fund things like mooring/overwintering fees, equipment, fuel or insurance.
Unsecured Boat Loans
An unsecured boat loan is the product you’d most often find offered by traditional banks and financial institutes. If a loan is unsecured (not requiring collateral), the interest rates will often be higher than those of a secured loan but likely wouldn’t require a down payment.
They also offer more flexibility on what you can use it to fund – an unsecured boat loan could help you to cover the total cost of a new boat purchase or any maintenance or repairs needed to a boat you already own.
Choosing the Right Boat Loan
Finding a boat loan suitable for your needs and current financial situation doesn’t need to become a storm in a teacup. Once you have decided which type of loan best suits you and the figure you’d like to apply for, applying and getting approved is a simple process.
Most reputable institutions will have an option for you to apply online and get a decision in less than 10 minutes. Once you have a loan offer, they will connect you with one of their loan specialists to discuss options for the loan and verify your personal/financial information. Then, loan documents will be provided for you to review and sign, and once that’s done, you could have the money in your account by the end of the day.
About OneMain Financial
OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.