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Boat Financing- Interest Rates Explained
No one can tell you the exact interest rate that you’ll
get on a boat loan. There are many factors that affect this rate, and it will
vary for each person. If you have excellent credit and make a lot of money, for
example, you’re likely to get a lower interest rate than someone with good
credit that makes less money. There are four main factors that influence the
overall determination of your interest rate when it comes to boat financing.
They include:
-Where you get the loan: If you get a boat loan through a
dealership, they might have in-house financing specials that can save you more
than going through a traditional lender. Conversely, their rates might be higher
than those of an independent lender; it all depends on the particular dealers
and lenders that you consider. This is where shopping around for boat financing
comes in handy.
-Your credit score: A boat isn’t an essential purchase.
Therefore, creditors are going to be much stricter about the interest rates that
you’ll pay for your boats, especially when it comes to your credit score. If
you don’t have an excellent score, or at least an almost excellent score, your
chances of getting a good interest rate (anything under 15%) will be out the
window. Try to keep your credit score above 600 at all times, and remember that
it’s better if it’s higher.
-Your debt-to-income ratio: This is the amount of money you
owe versus the amount of income you bring in. The less debt you have, the
better; also, the more income you have, the better. The idea isn’t to not have
any debt; this makes you look like you don’t use your credit well. Instead,
you need a low amount of debt along with an income that is at least triple your
debts each month. For example, if you have $150,000 in debt, but only have
minimum monthly payments of $1500, you should bring home around $4500 each month
or more to get the best deals on interest rates.
Submitted by: michelle
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Added: Wed Nov 26 2008
