Getting a boat loan if you have bad credit may be difficult, but you may still have a chance of qualifying for one if you apply with the right lenders. Here’s what you need to know about how to get a boat loan with bad credit:
Check your credit
Your credit score will help you determine which lenders you’re most likely to qualify with and the interest rates they may offer you. If your credit score is low, you should the time to improve your credit score before applying for a loan. Raising your score before applying can save you money in interest and fees, reducing the total cost of borrowing.
Create a budget
The cost of a boat depends on the size and type of boat you’re shopping for. You’ll want to pay close attention to how much of a down payment is required, plus the minimum you’ll pay each month. Typically, you’ll need to save up between 10% and 20% of the boat’s total price to offer as a down payment. Use a boat loan calculator to estimate your monthly payments and determine whether a boat loan fits into your budget.
Choose a boat
During the boat loan application process, you’ll need to disclose which vessel you plan to purchase, so it’s a good idea to make this decision ahead of time. Lenders typically want to know the make, model, year, mileage and condition of the boat, as well as its history.
Apply to lenders
Rate shopping for a boat loan can help you nail down the rates and features that best fit your financial needs. During this part of the process, the credit scoring models will count all of your loan inquiries as one, as long as you do it within a 14-day window. It’s always a smart idea to apply to multiple lenders so you can find the least expensive loan with the best features.
Close on your loan
After you choose a lender and meet their qualifications, you’ll need to sign your loan agreement and close on your loan. Be sure you understand what your repayment schedule will be, so you don’t miss a payment.