Boat financing loans are easily available but one should study loans offered by various lenders – the interest rates, the loan amount and the length of the boat financing loan, the loan tenure to be precise.
The tenure of a loan is dependent on various factors:
The loan amount is the most important factor for deciding the tenure of the loan.
If a person with a weak credit score applies for a boat financing loan, the lender may grant his request but may insist on a short loan term. This is because the lender is taking a risk granting a loan to such a person and he wants to get back his money as quickly as possible.
If the lender has agreed to grant a loan for a boat which is quite old, he may want the loan to be repaid within a short period. The reason - the boat is the collateral for the loan and the value of the boat would decrease drastically as the boat gets older. So in case of a loan default, the lender would take possession of the boat but would find it difficult to sell it at a good price. This would result in him losing a good chunk of the money he lent.
For a person who has a good income and who has no problem in paying a large loan installment, a short tenure would be beneficial as this would save him money. But for someone who is not able to make large loan payments, a long tenure would be convenient.