4 Steps To Finance A Boat
Read our 4 Steps To Financing A Boat in Australia to help you get the best deal on offer.
Qualify and Calculate Your Loan Amount
To qualify for a boat loan, you’ll need to be 18 years of age or older, an Australian citizen or permanent resident, and be regularly employed with a regular source of income.
When it comes to how much you can borrow, there are a few contributing factors but the main one is how much you’re comfortably able to make repayments on. Boat loans typically start from a minimum of $5,000 and go up to around $200,000.
Use a boat loan calculator to work out your repayments.
Choose The Type of Boat Loan
Now you have to decide what type of boat loan you’ll want to apply for; secured or unsecured.
Secured boat loans are lower risk to the lender, so they usually have better rates and terms, which means you can borrow more money and it’ll cost you less overall. The downside is that if you stop making payments on your loan (and you wouldn’t) then the lender could repossess the boat, and some lenders will only allow new or near-new boats as security.
Unsecured boat loans might not sound great in comparison, but while they do have lower limits and higher interest rates, they allow you complete freedom in the use of funds, which means you could use part of the loan for a boat and part for buying equipment such as fishing or water sports gear.
Choose a Lender
Banks are a popular option for financing boat purchases. However, most banks don’t have loans designed specifically for boat purchases, only secured or unsecured loans.
Non-bank lenders offer very fast approval, specialised loan products, and easy, online applications. Many offer loans designed for purchasing boats, while others offer unsecured loans that can be used to purchase a vessel and personal equipment.
Many boat dealerships will offer finance. This one-stop-shop for purchasing and acquiring finance can be convenient and include an easy application process. However, they may not offer the same value when compared to loans from banks, non-bank lenders and brokers.
Compare Boat Loans
Once you’ve decided on the type of loan you want, you’ll take the time to compare all your options and make sure you can comfortably afford the repayments over the lifetime of the loan. Here are some of the major things to look out for.
Interest rates are the biggest cost of almost any boat loan, so keep an eye out for a low rate if you can find one.
Fees can add up fast. Make sure you know how much you’ll pay by checking the boat loan’s Product Disclosure Statement and comparison rate (a single rate that includes both interest and fees).
The term of your loan will determine your regular and total repayments. Specialist boat loan lenders usually offer longer terms, up to a maximum of 10 years. Try to choose a loan term that balances repayment affordability with interest and fee savings.
Different boat loan features may offer flexibility, or make your loan easier to repay. Some allow fee-free early repayments to pay your boat loan off quickly and save on interest. Others may allow you to borrow more than 100% of the boat’s value to buy boating equipment.