Taking on finance of any type is a significant step for most boat buyers. The purchase can be significant in dollar terms, depending on the type of boat being acquired. The boat loan repayments present an additional expense to the individual or the household. So the entire process of applying for a boat loan should be approached with a seriousness, honesty and transparency from both applicant and lender to ensure a positive outcome.
The boat loan application is an important document. Jade Boat Loans consultants assist customers with what is required, but it is up to the individual to provide the correct information and not underestimate their current expenses or overestimate their income.
The details which loan applicants provide in their boat loan application are extremely important in allowing lenders make an assessment and suitable loan offer. When full and complete information is not provided, there can be negative outcomes for the individual.
We highlight the importance of the details provided in a boat loan application to ensure customers are aware of their role and responsibilities in achieving the most appropriate boat loan offer to suit their circumstances.
Application Assessments
Lenders assess boat loan applications for the creditworthiness of the individual and to arrive at a decision as to the loan amount which would be approved. Creditworthiness meaning the ability to repay a loan. From that assessment, a decision is made on the interest rate and loan terms and conditions which will be included in any offer made to the applicant.
Lenders access information from credit reports which list loans and loan applications as well as other information in regard to the finance history including for credit cards.
Lenders will have varying guidelines around loan approvals, but all must adhere to regulations and laws in this area. Lenders in the consumer finance area, which covers boat loans to private buyers for recreational boats, must adhere to the laws as set out by ASIC.
Jade Boat Loans is a Licensed Credit Provider and we adhere to the Responsible Lender Guidelines and applicable Codes of Conduct. Our licence and credentials are an assurance to our customers that they are dealing with a reputable and responsible marine finance lender.
These regulations set out the way that lenders must behave when making loan offers to consumers and are in place for the benefit of consumers.
Application Details
When applying for a boat loan, applicants are required to provide a range of information on their financial position, residential status, employment and other personal details. This is required by law.
The financial data includes information in regard to income but also in regard to expenses. In the assessment process, some data can be verified from tax records, banks statements and the credit report. However, some aspects of expenses may not be as easy to verify so it is up to the applicant to correctly provide this information.
The information must be full with no ‘omissions’, ‘oversights’ or ‘under-estimations’ when it comes to expenses. The application is signed by the applicant as true.
Outcomes of Providing Incorrect Information
In completing a loan application form, it may be tempting for some people to under-estimate expenses to improve the appearance of the financial position or personal balance sheet. Perhaps with the hope that a larger loan amount would be approved to purchase the boat of choice. But the potential outcomes of such a move can be significant and can be long-term.
Lenders make a loan offer based on that information. If a loan offer is made and accepted and is not within the affordability of the individual, the repayments may place pressure on the budget. With current inflation soaring and cost of living pressures on many individuals, this is an important issue.
Underestimating expenses can result in a loan offer being accepted that is not realistic for the applicant.
When repayments are under pressure, this is where the situation can become dire. Under the format of a Secured Boat Loan, the boat is used as security for the lender against the finance being extended. When repayments are missed, the loan can fall into what is known as default. At this point, the lender has the right to repossess the boat.
The boat is then on-sold for the lender to recoup outstanding monies. The borrower ends up with no boat and a serious downgrade in their credit rating.
The credit profile is affected as these issues are reported to Credit Reporting Agencies. Resulting in a downgrading of the credit score. These entries can remain on a credit profile for some time and as such impact future finance applications including credit cards.
A good credit score should be valued and maintained as it can be critical to achieving financial goals over the long term.
Achieving Cheaper Interest Rate Boat Loan
Cheaper interest rate boat loans can be achieved without having to underestimate expenses. Interest rates on boat loans will vary with the individual aspects of the loan application, but also across the lender market. We are accredited with many lenders which is one of the reason we can easily source the cheapest rates.
The best interest rates, as displayed by lenders, are for the best credit rating applications. If in doubt as to what the credit score is or what is on the credit profile, individuals can apply for a copy. There are set procedures for addressing any entries which are considered errors. Information around this can be found at Moneysmart.
Providing less than complete details may result in doubt on behalf of lenders and as such a less than ideal offer may be made or the application may not be approved. Ensure the details on the application are full, complete and correct to ensure the most appropriate loan offer is received.
Our consultants negotiate with lenders to get the best rates for our customers, but that starts with the information we have to work with. Our service includes assistance with application queries and handling the paperwork to ensure a streamlined loan process.
Contact Jade Boat Loans on 1300 000 003 to apply for boat finance
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.
