Ways to Finance a Wakeboard Boat

So, you’ve shopped around, tested out a few models, and you finally found the one. Your dream wakeboard boat. You might still be in a state of sticker shock after looking at the price tag, but don’t let that stand in the way of your wakeboard boating dreams! Boat ownership is actually very attainable for many people with the right financing plan. Here are some ways you can finance your wakeboard boat and a few other factors you should consider before you set sail with a new loan.

What to Consider Before Financing a Boat

Purchasing a boat in no small financial undertaking but with careful planning and consideration, you can ensure that your payments are manageable. Before you pull the trigger, you should consider a few important aspects.

First and foremost, you need to examine your credit. This influences the type and extent of boat loan that a lender is going to give you. A higher credit score is better because it displays your previous history of making reliable payments on loans. However, if you have a lower credit score, you should be prepared to pay a higher interest rate.

Another question you should ask when determining your boat budget is what is the true cost of owning a boat. Aside from purchasing the wakeboarding boat itself, you’ll need to consider the cost of gas, maintenance, repairs, winterizing, towing, registration, taxes, boat insurance, and seasonal storage depending on where you live. These additional costs can add up quickly and send you way beyond your initial budget.

Additionally, if you’re interested in buying a used boat as opposed to a new boat, you might need to pay for a marine survey, which ensures the boat’s condition and functionality. If the examiner notes any issues, you’ll likely need to get them repaired before you can purchase the boat and take it on the water.

Types of Boat Loans

Boat loans are similar to standard car loans and vary significantly based on the size of your down payment, your level of income, credit history, payment period, and the size of the loan. You can expect to pay fixed monthly installments over the course of two to fifteen years. The interest rates vary based on a variety of factors and the type of boat loan you take out. There are essentially two types of boat loans: secured and unsecured. Each type has its own benefits and drawbacks, so it’s important to understand the distinctions between the two types of loans before committing to one.

Secured Loans

In a secured boat loan, your purchased boat becomes collateral. This type of personal loan dictates that if you default on the loan, the lender can repossess the boat as a form of repayment. Secured boat loans also have higher loan limits, which means you can get a larger, flashier boat, and the longer repayment terms give you more time to pay off the purchase. Additionally, the types of loans have lower interest rates.

A secured boat loan might be the right move for you if you don’t qualify for an unsecured loan, are seeking out a higher loan amount, and are comfortable taking on some risk.

Unsecured Loans

Unlike the secured loan, an unsecured loan does not use the boat or any other asset or property as collateral. Because these types of boat loans are not backed by a specific asset, lenders view them as riskier, resulting in higher interest rates and shorter loan repayment terms. If you default on an unsecured boat loan payment, the boat will not be repossessed, but you will face financial consequences such as a damaged credit score and wage garnishment if the lender takes you to court.

This is the more popular method of financing a wakeboard boat if you want to get an older boat and make a lot of upgrades.

Benefits of Financing

Financing a wakeboard boat gives prospective boat owners the opportunity to secure the boat of their dreams with fewer upfront costs. Additionally, some boats may qualify for the same IRS tax advantages that are available when you purchase a second home, giving you more financial flexibility and the chance to pursue other investments. Paying in cash or liquidating your assets to pay for a wakeboard boat can put you in a tight spot if unexpected money issues crop up, but you can rest easy with a financing plan.

How to Secure Financing

Whether you choose to secure a loan through a bank, credit union, or a marine lending specialist, you should compare different lenders to find the perfect fit for your financial needs. A great way to nail down your budget is to use a payment calculator, which helps you determine how the kind of boat you can afford and how much you can expect to pay based on the size of the down payment, length of the loan, and the interest rate.

When you’re ready to hit the water in the wakeboard boat of your dreams, our team at M20 Marine is happy to assist. With our extensive boat showroom and experience with financing options, we can help you find the right boat at the right price today.