When buying a new boat, most buyers these days will require finance to make the purchase. The choice of loan options and decisions to be made around finance can be extensive. But the process doesn’t need to be complex or drawn out if you are well-informed around your choices and have the assistance of an experienced marine finance lender such as Jade Boat Loans to handle your loan from the get-go.
The Australian lending sector is vast with a range of banks and finance companies available for boat loans. Not all will offer specific loans for boats but their generic secured personal loan category usually covers this type of purchase. We do offer a Secured Boat Loan which is structured and sourced specifically for marine vessels.
As we are accredited with multiple lenders including those that do specialise in marine finance, we assist with the decision around lender selection by simply sourcing the best loan available for consideration by our customer.
One decision which is purely in the hands of individual boat buyers is whether to apply for a boat loan before or after the purchase decisions are made and a commitment to a sale made. We’re talking about whether to go for a Pre-Approved Boat Loan or wait and seek a Post-Purchase Boat Loan.
It’s probably fair to say that historically and the more popular way to go has been to decide on a purchase and then head off to sort the finance. But pre-approved loans are becoming more popular and can offer significant benefits. We cover off on the similarities and differences on these two ways of applying for a boat loan so you are well-informed to arrive at which way is best for you.
Definitions
First the definition of pre-approved and post-purchase boat loans. These are not actually different loan types but simply refer to when the loan is applied for. The ‘post-purchase’ naming is a term we’ve adopted for this purpose and to differentiate from pre-approved.
A post-purchase boat loan is the well-known way of seeking a loan after the decision is made with the seller. The buyer does the deal with the boat dealer which can be a full commitment, with a holding deposit paid or an arrangement where the deal is subject to finance being secured. That would depend on what the seller is prepared to agree to.
A pre-approved boat loan is applied for before a boat purchase is made. The loan application can be made based on an estimate of what the borrower considers they will be spending on the boat. Usually a buyer will have an idea of what type of boat they intend to buy – cruiser, fishing boat, yacht, tinnie, wake boat, or other and this can determine aspects of the loan. It is preferable to have an idea of the type of boat, possibly maker, new or used and a price range prior to applying for a pre-approved loan. Having as much detail upfront and then proceeding to buy according to the brief may prevent adjustments and re-quoting a pre-approved loan after the purchase is finalised.
Similarities
There are significant similarities between applying for a loan before or after a boat purchase is made.
For loans sourced through Jade Boat Loans, the similarities between pre-approved and post-purchase boat loans include:-
- Available for all types of boats: cruisers, power, sail, fishing, recreational, wake boats, ski boats, cabin cruisers, tinnies, yachts, luxury motor yachts, houseboats, jet skis and others.
- Available for locally manufactured and imported boats.
- The same interest rates apply and can be fixed for the entire term of the loan.
- Fixed loan terms are the same with up to 7 years available.
- Same loan types available: Secured Boat Loan being the most popular for private buyers.
- Private buyers and marine business operators.
- Repayments can be calculated using our calculators.
- No deposit finance available.
Differences
There are a number of key differences between pre-approved and post-approved loans.
- Timing: as pre-approved loans are arranged prior to purchase, they do have a timeframe after which the offer expires. This will be advised at the time.
- The exact loan amount is usually not known when applying for a pre-approved boat loan. Extras and options may be added at time of purchase and may be included in the loan. Therefore, our consultants include the final loan amount when finalising the loan. This may require a slight adjustment to the repayments depending on whether the final amount is greater or less than the estimate.
Benefits
The benefits of the different timing in applying for a loan may be perceived differently depending on individual buyers.
However, there are some widely accepted benefits of pre-approved finance:-
- Buyers have the knowledge that they are approved to spend a certain amount on their boat purchase.
- Provide confidence moving forward with a purchase knowing the loan has been secured.
- Avoid knee-jerk decisions around finance such as around dealer finance offers which may end up more expensive than can be achieved through Jade.
- Avoiding any desperation which may be associated with having to source finance to quickly finalise a purchase.
- Being prepared to act quickly and commit and secure a boat which may be in short supply.
The decision as to when you apply for a boat loan is up to you. But whatever way you choose, we can assist with quotes and loans at better interest rates.
To discuss boat loan 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 MIS-PRESENTED DATA AND DETAILS HEREIN.
