Pros and cons of paying cash or a boat loan
Buying a boat is a major decision for most people. Even a small dinghy, sailboat or trailer boat can represents a significant purchase. So when the time comes, the other big decision you have to make, besides which boat you will buy, is how you are going to pay for it.
While every individual’s financial situation is different and you should take into account your personal financial position both now and in the future, there are some general considerations which may assist you in your decision.
In times long gone, the trend was definitely to work hard and save for your luxury and major purchases. But in the current environment, with a sophisticated global financial industry, financing major purchases, both essentials and leisure, is the growing trend.
Is Cash Really King?
Time to pay for the boat and if you are fortunate enough to have accumulated the necessary funds, paying cash for your boat may be an attractive option. For starters, with interest rates at historic lows, if you have your savings in the bank it’s not working very hard for in earning significant interest.
In addition, paying cash means you avoid any fees and charges associated with many boat loans and the boat is all yours. When you do come to on-sell, there will be no encumbrances which often makes a sale much easier.
On the negative side – think of how long it took you to save that money? Possibly a long time and may take even longer to replace it. By using your cash reserves/savings, may leave you with little in back-up funds for unforeseen events in the future and you may have to cut back on other things in life. And of course, boats come with ongoing expenses such as mooring, servicing, fuel and registration.
On the consideration side – how can you better use your cash – to offset your home loan mortgage or other commitments.
Do Boat Loans Rule?
Securing a great finance deal for you boat is a relatively easy process and specialist marine finance brokers, such as Jade Boat Loans are in an ideal position to offer you a great boat loan at great interest rates.
While current low interest rates mean you don’t earn much on savings, they also mean you don’t pay as much interest on loans. So it is one of the best periods in recent history for great interest rate loans.
With a boat loan, you will have a fixed monthly repayment for the term of the loan. So if interest rates increase, your loan repayments will not but your savings will earn more.
You can utilise your saved cash reserves to pay off the loan.
With a boat loan, you can have the flexibility to pay out the loan early if your financial circumstances make that an attractive possibility in the future.
Benefits of a Boat Loan
Taking out a boat loan and establishing a good pattern of making repayments can assist you in improving your credit rating for future finance loans.
You still have your nest egg cash for other purposes and back-up for unforeseen circumstances and you can use it as collateral against other financing requirements.
And of course, you can always take the middle ground and pay part in cash and finance the balance!
These are just a few considerations that your Jade Boat Loans consultant can discuss with you further in a no obligation, confidential conversation.
Jade Boat Loans are a well-established, Australian boat loans company with extensive experience and expertise across many areas of finance and insurance.
We work in the best interests of our customers and will be working hard to secure you a great boat loan. They cater for Jet Ski Loans, Houseboat Finance, Used Boat Loans, and Cheap New Boat Loans Interest Rates.
Disclaimer: The information contained in this article is sourced from government and reputable sources, however, it is intended as a guide for general information.