There would be very few people that want to actually pay more than they should for anything. Whether it’s essentials or recreational and leisure goods like boats. Regardless of the price range or buyer’s budget – whether it be a top end Riviera luxury cruiser or a basic, entry-level iconic Quintrex tinnie, most buyers are keen to shave something off the price tag. The same principle applies to the boat loan. Keen buyers will be seeking to get the cheapest boat loan to make that boat purchase even more affordable.
But is it even possible to save money on a boat loan? There are a number of ways that buyers can consider to save money on their boat loan to achieve lower repayments, lower interest rates and a cheaper loan overall. We provide a number of ideas for you to both consider and act on when seeking a boat loan.
Save on Interest on the Boat Loan
The largest individual cost or extra on any finance or loan, aside of course from the principal loan amount, is the interest charges. So one of the obvious ways to save money on the boat loan is to get a cheaper interest rate.
The interest rates on boat loans will vary across the lending market. There are many sources that buyers can tap into for a boat loan. Finding the ones that offer the cheapest interest rates is the key to saving on interest charges.
One simple tip is to buy and secure a loan now while lending rates across all markets are at a historic low. The RBA sets the cash rate from which most lenders then establish the interest rates they will charge on their different loans.
The cash rate will go up at some time over the next few years, with some analysts tipping it will be sooner than the 2024 timeline that the RBA has consistently held to over the past 12 months or so. By securing a boat loan at a cheap and fixed interest rate now, will ensure you save on the loan, compared with if you delay the purchase for a year or so. Note the key word ‘fixed’. Some boat loans may be offered at a variable interest rate. That means the interest rate charged on the loan can potentially go up if interest rates in general increase.
Even now, with rates at all-time lows, the interest rates being offered for boat loans varies across the market. Refer to our Interest Rate Comparison Guide and you’ll quickly see what we mean.
Choosing a Specialist Lender
The choice of boat loan lender is pivotal to the discussion around saving on interest. As you can see from our lender comparison, the rates vary and as a specialist marine finance lender, our Jade Boat Loans rate is the cheapest on the list.
Lenders such as banks and some finance companies that operate across multiple consumer and business finance sectors tend to offer more general loan products. These large-scale organisations also must usually adhere to set internal guidelines for approving loans. To coin a popular phrase – with little wriggle room on rates or loan conditions.
By using Jade as your lender, you have access to a vast selection of lenders including specialist that have greater flexibility and are open to negotiating.
Term of the Loan
Drilling deeper now into the actual loan structure and we’ll look at how the length or term of the boat loan can offer another way to save. Interest is charged on an annual basis so if you are looking to save on total interest charged, opt for a shorter loan term. You will
A shorter loan can mean less in total interest payable and you can pay off the loan and the boat sooner. But a shorter loan term means higher monthly repayments. So it will depend on whether a buyer is looking to save on interest or save, as in pay less, each month in repayments.
Again it can come back to lender choice. Lenders can have guidelines around how many years they will approve for boat loans.
The Deposit Question
Jade Boat Loans offers no deposit boat loans for approved applicants which means the total amount of the boat purchase price can be included in the loan amount requested. Many buyers may be interested in taking advantage of the current low interest rate scenario by accepting no deposit finance. It frees up existing savings for other purposes.
On the other hand, by forgoing no deposit finance, paying an initial upfront to the seller and reducing the total amount of the loan will deliver a savings in total interest payable.
Credit Profile Issues
Another key way to save on your boat loan is to have a really good credit profile. Lenders assess the credit profile of applicants and this determines the level of risk they attach to the loan. Good credit rated applicants are deemed lower risk and as such tend to be offered better interest rate loans.
Paying down other debts such as other loans you may have or credit card balances can improve a general credit profile.
Taking these actions and considering all the options prior to making a boat loan application can improve your prospects of being offered a cheaper loan and saving money on your boat loan.
To save money on your boat loan with a cheaper interest rate, contact Jade Boat Loans 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.