Navigating the Boat Loans Process
Finance Solution eliminates the trade-off of securing financing that is advantageous for the customer while dealerships move more units.
You’ve picked it out. Maybe you knew from the moment you saw it—the perfect boat. Before you can get nautical you have to get financial and this is where Financial Solution can help. Boat loan rates are very competitive, and Finance Solution finds you the best rate and terms.
The moving parts that come with financing a boat purchase can be thought of from two sides. First is the cost and trouble of hiring and maintaining an expert financing team to get your customers’ applications approved. Second is the actual process of securing the best terms for your customers.
Finance Solution helps dealerships avoid the trade-off between high-cost internal departments and exceptional customer service.
When customers walk into the dealership, potentially ready to make that purchase, a few things might hold your salespeople back from closing a deal. The steepest obstacle is often finding the right financing to fit the customer’s particular needs. We’ve built the relationships with lenders necessary to get loans funded in almost any situation.
When prospective boat buyers are deciding whether they can afford the purchase, one of the biggest factors is the final rate of the loan. One of our trademarks is not only getting more loans approved than the competition (typically 20% more), but also securing the best loan terms available.
Many dealerships imagine that the best option when it comes to financing is to build out an in-house financing department. The problem is this entails recruiting, turnover, training, and other costs associated with having a staff. Plus, an internal staff doesn’t have the flexibility to scale up or down during busy seasons.
We have a track record of higher rates of application approval than other outsourced financing providers. Translation? More sales.
Boat loans are a lot like car loans. When someone applies for a boat loan, the lender usually offers a fixed loan rate for 10 to 15 years. Financial institutions provide the lowest rates to applicants with high credit scores. Those with bad credit receive higher interest rates. The loan amount determines the term length; the more money you request, the longer the term. There are many types of boat loans, rates, and terms.
Finance Solution helps you qualify for the following financial options:
This kind of loan uses the equity of your home as collateral. Home equity loans often offer a longer loan term than a standard boat loan, with the stipulation you pay more in interest. Clients who rent their homes are not eligible for this type of boat loan.
A personal loan is a type of unsecured loan. This type of boat loan doesn’t require collateral but tends to have higher interest rates than other options. The repayment terms for a personal loan are also shorter than a more traditional boat loan, meaning the monthly payments are tougher to keep up with.
An unsecured loan is ideal for customers with flawless credit scores. You don’t need to put your boat up as collateral. However, unsecured loans come with higher interest rates and a shorter repayment term than secured loans. If you fail to repay your loan on schedule, you damage your credit score.
With a secured loan, the borrower needs to put up collateral. When financing a boat, the boat serves as collateral. If you violate the repayment term, the lender can take possession of the boat. Secured loans have higher loan limits and lower interest rates.
Financing a boat is an involved and complicated process. Finance Solution offers a clear way forward when it comes time for you to qualify for a boat loan. When you’re ready to buy a boat, there are a few things you need to check.
A credit score is a summary of your overall credit. A high credit score means a better loan. Bad credit is a major barrier to qualifying for a boat loan. When Finance Solution presents your application to banks and credit unions, the lender calculates the level of risk involved for their organization. When you have a good credit score, it tells the lender you’re more likely to pay them back on time.
When an institution reviews your application for a boat loan, they look at the following:
When you apply for a boat loan, lenders use a debt-to-income (DTI) ratio to determine if you qualify. DTI is vital because income is not a reliable way to measure your eligibility. Someone with low income may have little or no debt, while someone with a six-figure salary could have plenty.
To calculate DTI, you need to provide Finance Solution the following information:
The interest rate for a boat is usually fixed and depends on many factors, such as the type of boat, loan, lender, and the customer’s credit history. The more money a borrower requests, the more the monthly payment will be. Since August 2021, some lenders have offered annual percentage rates (APRs) of 4% to 6% on secured boat loans. However, as we mentioned, qualifying for an APR depends on many variables.
Depending on the loan amount, customers can usually apply for a secured boat loan with a term of up to 20 years. Unsecured loans, also known as personal loans, come with a shorter term. The longer the term, the more a customer pays in total interest.
Step 1 – Fill out an application
If you are already at a dealership we partner with, they will provide you with the right paperwork. If not, you can begin your online application. All we need is the salesperson’s name and a buyers’ order or a purchase agreement number.
Step 2 – Get approval
We will bring your application for credit to a number of banks and negotiate the best rate and terms. The good news is that, when approaching new dealers, the first thing we do is ask for a list of denials they’ve had in the past. We’ve been able to demonstrate that 20% of them could have been approved with our negotiation skills.
Step 3 – Contract
If you accept one of our options, we contact the dealer and begin the contract process. Remember that the financing process can be as quick or as slow as you need it to be; we work on your timeline, not ours. We can get you approval in a few hours if you need it.
When you apply for a boat loan, you want it to cover the vehicle you’ve chosen. When you purchase a boat from a dealership, you can see and touch it. If you purchase a boat online, in a place like Craigslist or Facebook Marketplace, you can’t see or touch your new vehicle. So how do you know if your new boat is real? You don’t.
Transactions between individuals on Facebook Marketplace and Craigslist carry a high risk of fraud. That’s why we don’t secure loans for online boat transactions between individuals.
We could face consequences for financing boat sales that turn out to be fraudulent, and most lenders avoid these transactions for the same reasons. If you go through a dealership when you buy your boat, you can access a loan more easily than if you buy online. Why? Because a transaction dealership is more likely to be legitimate.
Dealerships that outsource their F&I through Finance Solution regularly see a 20% bump in approvals and, by extension, units moved off the lot.