“You can never cross the ocean unless you have the courage to lose sight of the shore.”- Christopher Columbus
Boating is an extraordinary art of sailing across the wide, never-ending ocean. Imagine yourself feeling the hinged wood surface of the boat, the cool air of November swaying on your face, the sound of waves rushing in, and to top it all, the sun setting on the horizon. Boating is one of the greatest adventures to let one free from this world. It is the entry to a world with no rules to follow, and most importantly, time unbound.
However, the first and foremost thing required to set sail across the sea is a boat. But, in today’s world, boats are quite expensive, and that’s where our will to an adventure comes to a stop. But not anymore. Here are a few tips which explain how long you can finance a boat. So, grab your essentials, and be ready for an adventure!
What is A Boat Loan?
The first question asked by many is what exactly a boat loan is? Well, to answer that question, a boat loan is basically money acquired by you from different sources such as banks, credit unions, etc. to purchase or finance your boat.
Types of Boat Loans
Like any other loan, boat loans are classified into 2 major categories. They are Secured Loans, unsecured loans, and second mortgage loans.
1. Secured Loans
This type of loan, as the name suggests, is a category of loans where the concept of collateral is introduced. This means that your financial assets such as a home, car, etc. can be used against you to pay the loan to the lender if the loan is not paid in monetary terms. As the name suggests, there is some security to the loan, which makes sure that the payee deposits the necessary amount on time without any hindrances.
2. Unsecured Loans
This type of loan is the complete opposite of a secured loan. In this type of loan, there is a mutual agreement wherein the payee promises to pay back the loan without the backing of any collateral. Thus, for this type of loan, there is no play with your financial assets.
How Long Can You Finance A Boat?
Financing a boat is a very lengthy process, as buyers need to find the best option for them. Thus, loan lenders need to consider certain factors to find that one loan option for their client that is beneficial for both parties.
One of the primary features for any boat loan lender is the size of the actual loan. The simple rule to remember is that the blogger the loan, the longer it is financed. A major part of loan lending services offers a scheme that is flexible for both the company as well as the client. They offer schemes wherein the payee must deposit the money at short intervals. In simpler terms, banks and other loan services have options that allow the payee to pay a required amount each month. Through this, the payee doesn’t feel an exorbitant burden on them to finance their boat.
The next feature is the style and type of boat. As we know, boats range in different varieties such as speed boats, pontoons, sailboats, kayaks, etc. Therefore, loan lenders find it absolutely essential to consider the loan on the basis of the style of the boat. Thus, the duration of the loan also varies according to the type and design of the boat.
Lastly, if you are purchasing an already used boat, you have to keep in mind that the loan policy will change according to the lender, after a thorough examination of it. Further, new boats have a better chance at a longer duration for financing your boat as compared to old, existing boats.
Hence, both parties need to consider the above options thoroughly before planning their financing for their boat.
Factors That Determine the cost of the boat
Before approaching a company or organization for your loan, payees need to have a critical analysis of what truly makes up their cost for their boat. It is important to keep in mind that the physical cost or the purchase cost is not entirely the true cost of the boat. There will be additional expenses that need to be accounted for by the payee. Thus, the factors that will give rise to the additional expenditure are listed below.
A boat is a physical product or commodity. Thus, it will be prone to wear and tear as time passes. Hence, the buyer needs to give utmost importance to the amount of money required to fix the boat, and overall maintain it constantly. Thus, there will be an additional cost in terms of polish, repairs, etc.
In order to set sail on the ocean or any water body, it is essential that the boat has some source of fuel. Thus, a buyer needs to consider the various options in fuel and their respective costs, in order to get high-quality fuel but at an affordable price.
Boats often require the payment of taxes by the buyer or boat holder. This can be in the form of goods tax, transportation tax, etc.
4. Registration of the boat
As a boat buyer, it is crucial for registration of the boat. This takes care of the legal perspectives of your purchase. It basically authorizes your purchase, making it authentic and verifiable in case of any discrepancies. Thus, the registration of your boat adds to excess expenditure, as it is not free of cost to register your boat.
5. Storage Fees
Once you purchase your boat, the next deciding factor will be regarding the storage of your boat. In simpler terms, it explains where your boat will be kept. This could be at a storehouse, boat club, etc. The one thing that all of them have in common is that they have some monetary fee for them to take care of the safety and security of your boat.
6. Insurance Fees
The last and final cost is your insurance. It is necessary to take insurance for your boat. This is because, in case of an accident or damage caused to your vehicle, the insurance company takes care of it. In order to acquire the potential benefits of your insurance policy, you need to pay a fee to them, which adds to the total cost of your boat.
Hence, consider all the above characteristics before purchasing your dream boat.