A Guide to Getting Used Boat Financing for Bad Credit
Visions of boat ownership can be dashed with the overwhelming challenge of poor credit history. An impaired credit score means that fewer lenders will be willing to approve a loan and even if they are willing to work with the applicant, the terms may not be favorable. However, many lenders will provide used boat financing for bad credit. By following a few simple guidelines, it is still possible to sail off into the sunset and increase credit scores.
Beginning the Process of Getting a Loan
Before starting the process of looking for used boat financing for bad credit, it is important to prepare and gather any necessary supporting documentation. Include an income statement and an assessment statement. Also check over all credit reports to make sure that there are no errors. Not all lenders are willing to make used boat loans. Determine which lenders do and which ones are willing to consider those with less than perfect credit.
Utilizing Other Assets to Get a Boat
Often there are other assets available that can be used as collateral for used boat financing for bad credit. Consider using a home equity loan or a home equity line of credit. A 401k can also be borrowed against to use as collateral. There are drawbacks to using this type of funding though. If the job should end, the money from the 401k will need to be replaced within 60 days or there will be tax penalties.
The Consequences of Bad Credit
If a lender is required and there is not another source of collateral, the boat may be used as collateral. However, used boat financing for bad credit will usually mean that there will be higher interest rates. Be sure to check the terms as well. Sometimes lenders will include high processing fees or administrative fees to offset the risks of a poor credit applicant. It can help to apply with multiple lenders to get the best interest rates and terms.
Using a Boat Loan Broker
Another option for used boat financing for bad credit is to use a boat loan broker. These professionals will help to find the right boat and they work with a network of lenders. This provides them with several choices to help get the applicant qualified for the loan. Be sure to be wary of any loan that has a pre-payment penalty. This would prevent a boat loan refinance in the future when credit scores improve.
Getting a used boat loan for bad credit can be as expensive as investing in a second home. With the poor economy, there will be many people who find themselves with lower credit scores. This doesn’t need to stop these people from living their dream. There are loans that are specifically designed for those with bad credit. In addition, there are other options available that can provide the solution to the problem. By examining all the options available it, even bad credit is not an insurmountable problem.