Options - New Boat Finance
The boat finance are highly dependent on two things, the interest rate and the amount borrowed. Although this might seem obvious, the point is that this information can be used by you to determine either your monthly boat loan repayments, or the length of time over which you want to take the loan. Both of these will be determined by the amount you decide is feesable for you to pay each month.
The all inclusive costs of new boat finance is determined by the time over which you pay and the interest rate. You are able to use a boat loan calculator to dicover the cheapest way, and also the best way according to what your affordable monthly repayments are. The monthly repayment amount is not of considerable importance to some people, while to others it is of most importance, and in the latter case you can increase the repayment term in order to pay less each month. However the total cost of your loan in terms of both interest repayments and capital repayment will be greater.
It is often fact that the longer time frame over which you shell out, the more interest you will have paid by the time you have paid off the loan. A boat loan calculator is able to determine that for you, and discover the amount of interest you will pay. However, you can ease the charge a new boat loan by careful selection of the financier. Not all financiers are the same, so what should you be looking for?
First seek a lender that will provide you a guaranteed fixed interest rate for the length of the loan, whether that be one or five years. Not all do this, although it is possible to come across lenders that will give you this security. Due to the fact that your boat is new you will be able to negotiate a secured boat loan, using the boat as security. This will generally permit you a decreased interest rate, and therefore the cost will be less than if your loan was unsecured.
However, you may encounter hidden expenses in purchasing a new boat as apposed to the actual new boat loan itself. If you hold a secured loan, the lender will require the marine vessel to be maintained and well looked after, and will require you getting a fully comprehensive auto insurance policy. This is so that, should an unfortunate incident occur to the automobile, it will not lose value through you being unable to pay for repairs or even a replacement, depending on the severity of the accident.
You will encounter this is true of any secured new boat loans, and will be an expense that you will need to be aware of when making the decision of the size of loan that you find affordable. It more than uses up the benefit of the lower interest rate through the loan being secured on your boat, and could be an unbearable burden if you are not aware of it and have implemented the cost into consideration in your calculations.
Boat Loan Calculator
A boat loan calculator allows you to calculate the monthly repayments at a specific interest rate over a set period, but this will not include the auto insurance. Then again, there could be a another option if this means that the loan you require is not feesable. If you feel you will be in improved financial circumstances at the end of the loan term, then you could apply a balloon.
This is similar to paying a deposit on the boat, but at the finish of the loan as opposed to at the beginning. You state a sum to be paid in cash at the end of the loan time period, and that is taken from the amount of the loan. Your repayments are correspondingly less, and you can afford the loan you need as well as the comprehensive insurance payments. As you earn more money you could pay for the balloon payment at the end.
Many financiers offer this option, and it is a beneficial one for those whose earnings are expected to rise during the time frame of the loan. If the balloon payment is not feesible for you to pay, then you may have no option to either take out another loan to pay it or to sell the boat to raise the money. However, it is a sound option worthy of consideration if you need more money than you can initially afford.
The cost of new boat finance loans, then, is a combination of interest rate, period of the loan and the amount you borrow, but you must also consider the comprehensive insurance policy into this. Selecting the option of a balloon payment enables you to ease your monthly repayments, but not the over cost given that you are still paying interest on the entire loan, including the balloon.