Buying a boat is usually seen as the epitome of investing in your luxury and leisure. Who wouldn’t want to get a boat for themselves? It’s comfortable, it’s fun, and owning a boat gives you bragging rights.
The good news is that getting financing for a yacht or a boat is pretty similar to how you would get a car loan. You receive a specific loan amount that you have to pay back over a fixed period, and there’s a certain interest rate attached to the entire transaction. If you are looking for a yacht financing option through a personal loan, read on as we discuss the different options available to you for buying a boat.
Types of Boat Loans
There are two major types of boat loans you can opt for; secured loans and unsecured loans. Both have different benefits to consider and maybe the better option for you depending on the situation. Let’s break them down:
Secured Boat Loans:
These are loans that are backed against a collateral of some sort. The lender will require you to submit some valuable item or asset against which they will provide the loan. If you cannot pay that loan back, the lender can take the collateral offered. With a secured boat loan, you can keep the boat as collateral instead of having to put up some other asset you own. If you’re unable to pay off the loan, your boat can get repossessed by the lender.
Unsecured Boat Loans:
On the other hand, unsecured boat loans have no collateral of any sort that they’re backed against. This option works for people who either don’t want to put up their assets as collateral or don’t have the assets to put up. These loans are considered riskier and usually have higher interest rates but give you more free hand in using the loan.
Repayment Time Frames
In most cases, you can get a boat loan that will last up to 20 years on a secured loan. This can change depending on the terms of your loan, the boat you buy, and the lender. In the case of unsecured loans, you might get less time to pay back the loan. It’s important also to realize that longer-term loans mean you pay more over the long term.
If you’re opting to get secure boat loans, then you should go in expecting an annual interest rate of between 4 to 6 percent on your loan. This number may change depending on your credit history and loan amount. For unsecured loans, the terms can be set by negotiating with the lender offering the loan.
If you want personal loans for a yacht, you should contact our team at K Horton Financials and check our options for private yacht loans. We offer both secured and unsecured private loans for boat financing. Contact us to learn more about our loan policy.
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