Jade Boat Loans FAQs

Yes. A pre-approved loan is simply finance which is sourced, quoted, arranged and approved prior to a purchase being made. It is arranged based on the amount that the borrower intends to spend and an indication of the make/model of the intended purchase. Pre-approved financing is available across all lending products and attract the same rates that are applied for and approved after a purchase commitment has been made. Pre-approved lending have a time limit after which the deal would be reviewed and possibly re-priced depending on the economic climate and any changes in the purchase specifications and the purchaser’s circumstances.

The type of vessel does not necessarily affect the pricing of a loan but it will be taken into account by lenders when assessing a lending application. The same rate usually applies across finance for all new models for all types and makes. That would include vessels for fishing, cruisers, yachts, runabouts, luxury superyachts and tinnies. With older models, lending for used craft may attract a different rate. The rates advertised by lenders can generally be presumed to refer to an applicant with a good credit rating, strong application and for new goods. The rate offered on lending can be determined more from the credit rating and aspects of the application rather than vessel type.

Through 2020 and into 2021, rates across the board have been at historic low levels. The Reserve Bank of Australia is responsible for setting the official cash rate which is the basis for lenders to set their individual levels. The RBA reduced rates as part of monetary policy stimulus measures to stimulate the economy due to the coronavirus impacts. The RBA has indicated it is looking for key economic indicators including unemployment in the sub 5% range and inflation in the 2-3% range before considering a rate rise. It has been indicated that may be in 2023 but it may be sooner. The RBA has said it expects rates to remain low ‘for some time’. Lenders want to remain competitive in the market and tend to wait until the RBA acts before changing their own rates. The RBA Board meets on the first Tuesday of each month (excluding January) and an announcement re rates is made at that time.

A comparison interest rate is relevant only to consumer loans, not business loans. The comparison interest rate is a  computation of multiple aspects of a loan. The comparison interest rate shown on any advertisement for consumer credit is displayed as an example. A comparison rate is computed based on a specific initial loan amount which has been arranged at a specific interest rate over a specific time frame and adding in the loan fees and charges and then averaged over the entire loan period. As the comparison rate includes these fees and charges, it will always be higher than the general interest rate. Lenders are required by law to display a comparison interest rate with all advertisements for consumer credit. When comparing marine loans, borrowers should compare comparison rates when the loan specifics are identical.

The majority of marine finance provided in Australia is secured lending at a fixed interest rate. The rate is fixed to the rate which is offered at the time the loan contract was arranged and settled. Changes to the official interest rate by the Reserve Bank will not impact a fixed interest rate loan that is already current.

The interest rate you are offered is based on your individual application and the security or boat you are lookng to finance. If you are looking to the future, there may be issues with your credit profile or credit score that you may be able to address and fix which will improve your credit profile and thus increase your possibilities of achieving a cheaper rate on future loans. There may be other aspects of your current loan application that can be addressed that may attract a cheaper interest rate. You would need to discuss these with the broker or lender as these would be totally individually addressed. There may be conditions around the loan that you may opt to change which may attract a cheaper rate by reducing your risk assessment. These may include reducing the overall loan amount and/or paying a larger deposit to the seller so the security held by the lender represents less of the overall value of the boat.

The interest rate that Jade is currently advertising is today’s best rate for watercraft loans and a general guide. This rate is derived on numerous calculations and formulations which take into account what our lenders are offering, global economic influences and other factors. Our interest rate varies at various times depending on changes in the lending market. The interest rate that you will be offered on your boat loan is calculated based on taking into account individual aspects of your boat loan application. Individual lenders will assess individual loan applications and offer the interest rate they consider suits that application. Your Jade consultant will negotiate and source the cheapest interest rate achievable for your particular loan. The interest rate you are offered may be exactly what we are advertising today or it may be higher.

Commercial marine finance are for business borrowers. In general, due to the nature of a business operation, a business is deemed a lower risk by lenders than personal loan borrowers.

Business have ongoing trading operations are often operating from a fixed place of business and often have many other aspects including additional security by way of property and equipment which make them a more secure borrower.

A personal borrower is deemed a higher risk assessment compared with a business and that is reflected in the different interest rates for business and personal use marine loans. This difference in business and personal loan interest rates is consistent across all types of finance – boats, cars, etc