Recreational boats are usually on buyers’ ‘wish’ and ‘want’ lists rather than essential purchases. As such, the cost can play a crucial part in purchase decision. But when finance is required to make the purchase, then the ‘cost’ factor typically relates more to the boat loan repayments rather than the boat price tag. The priority is to ensure the purchase is affordable and that can mean securing the lowest possible boat loan repayments. Ensuring the least amount is coming out of discretionary income as possible.
At Jade Boat Loans we prioritise achieving the cheapest interest rate for our customers as that is a major determinant of the overall loan cost and the monthly loan repayments. But there are a number of element to the loan structure that interact and can be varied to achieve the repayment level desired. We detail the options for structuring a boat loan to achieve the cheapest repayments and how we can assist boat buyers land the loan that suits their requirements.
Cheap Interest Rates Drive Cheap Loans
The total interest payable is the most significant cost associated with any type of finance. Yes, the lenders do have fees and charges to apply to the loan but the compound interest is by far the factor to focus on. Prioritising securing the cheapest boat loan interest rate is the first critical step to lower repayments.
The interest rate charged on loans for boats will vary across the lending sector due to a number of reasons. While the cash rate determined by the RBA is a starting point, lenders then need to account for their own costs of business including acquiring the funds they need to lend out and their operating costs. In addition, the interest rate offered can reflect that lender’s interest in being active in the sector.
As not all lenders will advertise a specific boat loan, it can take a lot of time for individuals to do the rounds of the lending sector to get information on what rates are being offered by different banks and non-bank lenders. So we’ve taken much of that work off your schedule with our Interest Rate Comparison Calculator. You can see who is offering what loans for boat purchases and at what interest rates. By entering the price of your boat in the loan amount, you can immediately see how the estimated repayments change accordingly.
It’s easy to see how the cheaper the interest rate the lower the boat loan repayment.
Time to Talk Terms
The term of the loan is another critical element to consider when striving to achieve lower boat loan repayments. Interest rates are presented as a ‘pa’ (per annum/per year) figure which should be a lightbulb moment that the number of years of the loan term will have an effect on repayments.
Jade Boat Loans can achieve up to 7 years for boat loans, subject to the approval of the lenders etc.
Talking terms and repayments, with loan amount and interest rate constant:-
- Longer boat loan terms will mean a lower monthly loan repayments. But the total interest payable on the loan will be higher than…
- Shorter boat loan terms, meaning less years, result in paying more each month in repayments but less in total interest over the entire loan term.
So if landing lower repayments is your priority, both the interest rate and the length of the loan should be taken into account. Before starting to talk with a Jade consultant about a boat loan quote, it can be helpful to have a monthly repayment figure in mind. It can assist our consultants to start negotiating with our lenders straight up to achieve the best outcome.
One extra feature of our Secured Boat Loans to keep in mind is being permitted to make extra payments as desired. So if you do opt for a certain repayment level but have extra income you can pay it towards your loan. Thus reducing the interest payable and shortening the loan term.
Total Loan Amount
Of course the total amount of a loan will affect the amount of the monthly repayments. We offer no deposit finance so, subject to approvals, our customers do have the option of including the full purchase price of the boat in the loan. Additional items such as trailer, outboard motor and safety gear may also be included.
But if you’re looking to reduce the monthly outgoings, then making an upfront payment to the marine dealer and reducing the total loan amount, can in turn reduce the repayments.
Structure Loans with the Calculator
To see how all these elements can work together and separately to impact the boat loan repayment, just refer to our Boat Loan Calculator. It’s an easy to use loan tool which allows you to input your own values for rate, term and loan amount. The calculator then displays the resultant repayment estimate for those values. Change one of the values and see how the repayment estimate changes.
Landing the ‘loan of the day’ can be achieved with careful consideration of the interest rate and the loan term and by engaging with a specialist marine finance lender like Jade Boat Loans to source the loan for you. Our consultants will handle the process and negotiate with our lenders to achieve the best possible result.
To discuss boat loan repayment options, 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.