Bad Credit Boat Loans | Top 6 Tips to Getting Boat Financing with Bad Credit

Intro: Bad Credit Boat Loans | Top 6 Tips to Getting Boat Financing with Bad Credit

Tip #1: Do your research: What is a bad credit boat loan?

You may be familiar already with the difficulty of getting a loan when your credit rating is low. Bad credit boat loans are an increasingly popular way to help rebuild your credit and help improve your quality of life with a recreational vehicle, a boat, to make your leisure time more pleasurable.

These loans are also referred to as “below prime” loans: essentially, because boat lenders are taking a gamble with giving you boat financing with bad credit, you pay a higher boat interest rate.

However, if you default, they will also be able to sell your boat fairly easily and not take a loss. This is one of the reasons that boat lenders are willing to look at boat loans for bad credit borrowers.

Image Source: Pixabay.com

There are two ways to apply for boat loans for bad credit: through the boat dealership or through a financing company. The advantage of securing your bad credit boat loans through the dealership is that the dealer will be incentivized to get the loan approved, as they will want to make the sale.

On the other hand, applying directly to a financing company and getting a pre-approved boat loan with bad credit beforehand gives you more choice when you start shopping. You aren’t tied down to just one dealer.

The important thing to remember as you start to look at the possibility of getting a boat loans for bad credit borrowers is that it accomplishes two things at once: you get a boat, and you get a chance to rebuild your bad credit in the process of paying off your loan.

Tip #2: Assess your situation: Can boat financing with bad credit help you?

Should you be applying for boat loans with bad credit? It’s time to look at your personal financial and credit situation to decide if this is going to work for you, even before you go out and start applying to banks or financing companies. Remember, every time that you apply for a loan, it is recorded in your credit history, so make sure that you know what you want before you start applying for a bad credit boat loan.

What’s your current financial situation? If you are looking into boat loans for bad credit, your credit history must be a little rocky. It makes sense, then, to first decide if you want a boat, and if you will be able to make the payments to pay off your bad credit boat loan.

Is owning a boat something that you really want? This is not the time to indulge in a passing whim. Owning a boat involves more than just making the loan payments. Once you’ve obtained your boat loan financing, you will still have to pay for maintenance, insurance, marina fees or towing and boat launch fees, and other routine upkeep costs.

However, if you’ve come this far, you probably do really want a boat. Maybe you already have one and want to upgrade to a bigger and better boat! Having a vessel that you can trade in can help you get that boat loan financing you’re looking for.

Making boat loans with bad credit work for you

So, once you’ve decided that you want that boat, it’s time to look at your finances and see if boat financing with bad credit is going to work for you. The degree of your bad credit will have a big impact on the boat interest rates that you will be able to get from prospective boat lenders.

While some bad credit boat loans are only available to those with a credit score over 550, other boat loan financing companies will look at you even if your credit score is as low as 500. Expect, however, that boat rates will be higher for you the lower that your credit rating is.

Don’t be discouraged if you’ve got a low credit rating. You can still get boat financing with bad credit, even if you’ve got the following issues in your credit history:

one bankruptcy from more than a year ago
unpaid accounts under $5,000
late car or mortgage payments from more than 6 months ago

Even with a current low credit score, obtaining and paying off your boat financing with bad credit will help you build a better credit rating for future loan applications. As your previous credit issues recede further and further into the past, replaced by a good credit record of paying off your boat loans for bad credit, your credit rating will reflect this and help you build a stronger financial future.

Don’t Miss: Carrington Mortgage Reviews – All You Need to Know (Mortgage Services Reviews)

All-in-One Change Management Tools

Top Rated Toolkit for Change Managers.

Get Your Change Management Tool Today...

Tip #3: Shop around: Who has the best deals for boat loans for bad credit borrowers?

There are 3 ways to apply for boat loans for bad credit borrowers:

local banks or trust companies
local boat dealerships
national companies specializing in boat loan financing

There are advantages and disadvantages to each of these sources of boat loans with bad credit. It is worth considering talking to representatives of each before reaching a decision on which avenue to pursue.

Your local bank or trust company may seem like the logical place to ask for boat loans for bad credit borrowers. After all, your current financial institution would have the best and most up-to-date picture of your current financial situation. However, a local bank would not be specialized in boat financing with bad credit and might not be inclined to give you boat loan financing.

A local boat dealership would have the incentive to secure you boat financing with bad credit, because they would be guaranteed a sale. If you have already found the boat that you want at that dealership, they will be all the more motivated. They would also take care of much of the paperwork for you.

Merrick Bank works with dealers to arrange boat financing with bad credit, up to $60,000. They only finance standard motorboats, not houseboats, sailboats, yachts, or personal watercraft. You cannot approach them directly to apply for boat loans with bad credit, but you can contact them directly to find out their current boat rates. Dealerships in Alaska, Hawaii, and West Virginia cannot apply to Merrick Bank for boat loans with bad credit.

Applying directly for boat financing with bad credit

If you want to have the most freedom in choosing your boat and the most competitive boat interest rates, a national or regional financing company specializing in boat loans for bad credit borrowers would make the most sense. They have the most expertise in this particular financial product. These companies can assess your credit history and give you boat financing with bad credit, leaving you free to look around for the perfect boat.

EBoats Loans works with you to find the best option for boat financing with bad credit. While they do not actually loan the funds, they will act as an intermediary for you with the boat lenders, once you have chosen the boat that you would like to purchase. They only need to pull your credit history once before talking with multiple lenders, which helps your credit score.

Seadream Finance and Insurance can provide bad credit boat loans to clients with credit scores as low as 550. Their sub-prime boat rates are higher than for customers with good credit scores, but they promise:

Loan terms up to 12 years
Simple interest financing with no pre-payment penalty
Standard fixed-rate & short-term fixed programs
Interest rates vary from the low to high teens

They will consider boat loans for bad credit borrowers of up to $60,000. They do not finance loans for high performance boats, commercial vessels, or personal watercraft.

Seadream Finance and Insurance

South-East Financial provides boat financing with bad credit in all 50 states. Loans start at $7,500. Past bankruptcies are not an issue as long as they have been discharged in full. As long as you have a credit score of at least 550, have stable employment, and are applying for boat loan financing for a recreational vessel only, you will be considered for boat loans with bad credit. You can apply online throught their website.

Boat Financing USA will give boat loans for bad credit borrowers when they meet the following criteria:

$5,000 – 60,000 loan amount
Minimum 10% down payment (which could be a trade-in rather than cash)
Minimum credit score of 550
2004 model year or newer only, limit of 28’
Powerboat or sailboat

Image source: BoatfinancingUSA.com

Rock Solid Funding will provide bad credit boat loans for both personal and business purposes to sub-prime customers. They welcome people with low credit scores to apply for boat loan financing in all fifty states. They also provide financing for trailers, RVs, and motorcycles. You can apply online, by phone, or by fax, and they promise quick approval times.

Boat Loans will only give boat loans for bad credit borrowers when the boat is less than 15 years old and when the borrower puts down a 10% deposit. They will not give boat loans for bad credit on high performance or commercial boats.

Boat Money lets you get pre-approval for a bad credit boat loan so that you can then look for a yacht knowing how much you can afford. They have a 17.99% boat interest rate for sub-prime borrowers who want to buy a yacht. They will finance between $50,000 and $500,000, depending on your financial situation. However, you have to be able to pay a 40% down payment.

Tip #4: Re-assess your situation: Will boat loan financing work for you?

You’ve started looking at some boats, and you’ve carefully considered where you stand financially. Be aware that you will have trouble getting even bad credit boat loans with the following issues in your credit history:

a high ratio of debt to income, over 45%
several bankruptcies
no way to verify your income, such as pay stubs or an employment letter
little past history of paying loans off in installments
no current ownership of a boat
unpaid liens

You may have to wait until you have cleared up some of these issues before you can successfully apply for boat loans for bad credit. Too many inquiries on your credit score could lower it even further before you have a chance to repair it!

Tip #5: Be prepared for the application process for boat loans with bad credit

Expect to share the following information when you apply for boat financing with bad credit:

Yourself:

Name, address, phone number
Where you work, for how long, and your income
Tax returns for the last two years
Do you own or rent?
What are your monthly expenses?
Complete list of assets and liabilities

The Boat:

Year, make, model, power, and any extras
The total cost, including upgrades, sales tax, and license fees

The lender will take this information into consideration along with your credit report in deciding whether to proceed with the boat loan financing. Meanwhile, make sure that you are up-to-date on all your bill payments and debt repayments!

Tip #6: See it from the boat lenders’ POV: What can you expect when you apply for boat loans with bad credit?

Let’s face it, if you’ve got a low credit score, you are more of a risk for a lender. In addition to having to meet certain basic requirements as listed above, you can expect that the terms of your boat financing with bad credit are going to be less favorable than those that someone with an excellent credit score will receive. Although boat lenders are willing to give many people with bad credit histories a chance, they still need to minimize their risk. As a result:

Expect to pay higher boat interest rates. It could be double the prime rate that borrowers with an excellent credit score pay, as high as 17.95%.
Expect to pay a minimum 10% down payment on your bad credit boat loans.
Expect to be limited in the choice of eligible boats for boat loans for bad credit borrowers. Most boat lenders exclude commercial boats, longer boats, and personal watercraft.

On the other hand, expect to get a longer financing term than you would on a car, as boats hold their value for many more years. This means lower monthly payments! Even bad credit boat loans could have a 144 month term. That’s 12 years to spread your payments out over.

Free Wealth & Finance Software - Get Yours Now ►

Making the final decision: Is boat financing with bad credit right for you?

In the end, you have to decide whether using boat loans for bad credit borrowers is going to be the cure you need for your low credit score.

After considering your credit history and your current financial situation, you might decide that this is what you can do to accomplish two important goals: improving your credit score for future loan requests, and getting a boat which you can use for days and weeks and months of pleasure for yourself and your family for years to come.

The companies are out there to help you reach those goals; it’s up to you to make it happen.

AdvisoryHQ (AHQ) Disclaimer:

Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.

Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.