When considering a home loan, there are set guidelines around the deposit that home buyers need to have accrued in order to be eligible for a mortgage. Saving the deposit can often be the major obstacle to many people getting into the housing market. So if you've had that experience with your home loan and you're now considering buying a boat, it's not surprising that you would be wondering the same thing - how much deposit do you need?
Well, the good news is that securing a boat loan is a lot easier for most people than going through the home mortgage process. Buying your floating home-away-from-home is definitely different from buying a house. For many boat buyers, no deposit is required to secure a boat loan through Jade Boat Loans.
No Deposit Defined
No deposit loans mean that 100% of the purchase price of the boat can be included in the boat loan. This may include the boat only, the boat and the trailer, the boat and the motor or the entire package. Many additional options and accessories can also be included in the loan when they are purchased at the same time as the boat. So check out what is available, have a good think about what you may consider you’ll need into the future and include it at the time of boat purchase so you don’t have to dip into your cash at a future time.
When lenders such as Jade talk about ‘no deposit finance’ it refers to no money upfront is being requested by the lender. That means you don’t have to stump up 10% or whatever as a deposit. The lender rarely makes such demands. But all loans are subject to individual lender guidelines and individual assessment of the application.
With a Secured Boat Loan on a new boat, the boat is used as security against the loan. For most lenders and for the majority of borrowers this is sufficient to be eligible for no deposit finance. In instances where a lender assesses the value of a boat to be below the purchase price such as a second hand boat, the lender may request the loan amount be reduced. This may also be requested if an application does not meet lender guidelines. Click to find out more information on our used boat loans. In such circumstances, the borrower would need to reduce the overall total loan amount requested which could entail an initial amount paid up front.
For many of our boat loan applicants, a no deposit boat loan is highly achievable and the usual way to go. This allows boat owners to free up cash for other purposes.
Seller Down Payment
The lender definition of a deposit should be clearly differentiated from a deposit requested by the dealer or other seller of the boat. Many buyers will go boat buying, decide on the boat, commit to the purchase and then go off to sort their boat loan. In these instances, it would not be uncommon for the boat dealer to ask for a deposit to be left to confirm the sale. The dealer wants to make sure you actually do return to finalise the sale. They don’t want the big SOLD sign on the boat in their yard or marina, leaving that vessel out of their catalogue, without some form of commitment from the buyer.
If you find yourself in this situation there is a way to still get no deposit finance. Have the conversation with the dealer about refunding the deposit back to you after you’ve secured your finance and your Jade Boat Loan Broker has finalised settlement and paid the full 100% purchase price for you.
Another way is to arrange a pre-approved boat loan. You simply contact Jade prior to heading off to look at boats. We process your loan application through to being approved based on your estimation of the price of the boat you will buy.
When purchased, simply call your Jade consultant to advise the details, we make the necessary arrangements with the dealer and handle the paperwork. Pre-approved new boat finance is a great way to go with boat buying as they give you a target price range to aim at, having had your loan negotiated to meet your target repayments.
Doing the Sums
With all financial transactions, loan applicants need to consider, is it right for me? Is borrowing 100% of the purchase price of the boat the most appropriate pathway for me?
You can use our boat loan repayment calculator to assist you in answering those questions. Simply enter the 100% purchase price of the boat as the loan amount and see what the repayments would be. Then enter a priceless deposit that you might be considering making. Note the variation in the repayment estimates to see if that works with your budget.
Interest rates are currently at historic lows in the lending market which makes most types of consumer loans very achievable for many people. So taking out a no deposit loan at present can make a lot of sense. Compare your finance options with our cheap boat finance interest rates.
To talk through no deposit boat loans or just get on with your application, contact us and have a conversation with one of our Jade consultants.
For a no deposit lending, call us on 1300 000 003
DISCLAIMER: THE INFORMATION AND SPECIFIC DETAILS CONTAINED IN THE CONTENT OF THIS ARTICLE HAVE BEEN PREPARED AND ARE PRESENTED PURELY AS GENERAL INFORMATION AND NOT INTENDED AS THE ONLY SOURCE OF FINANCIAL ADVICE FOR BOAT BUYERS AND LOAN BORROWERS. FOR THOSE THAT CONSIDER THEY REQUIRE SPECIFIC ADVICE, THEY SHOULD CONSULT WITH A FINANCIAL ADVISOR. LIABILITY IS NOT ACCEPTED IN REGARD TO ERRORS AND MISPRESENTED DATA AND DETAILS HEREIN.