A person who has taken a boat loan to purchase a boat may want to get out of the loan for various reasons. But he would have to find the different ways out and select one which is most beneficial to him.
Is there a good way to get out of a boat loan?
This is a rare situation, but it could so happen that the boat owner has enough funds to repay his lender. Instead of continuing the loan, he may want to close it by making a lump sum payment. Before he selects this option, he should check if his loan contract contains a prepayment clause. If it does, he may be required to pay some charges for prepaying the loan. In such a case he should verify if the prepayment option would prove expensive.
A person who had taken a boat loan when the interest rates were high may now want to get out of the loan and take a cheaper one. If there are no prepayment charges, then he can apply for a new loan and retire the old one with that amount. If there are prepayment charges, he would have to compare and see whether continuing with the loan would be more beneficial.
Another way out for a person who wants to close his boat loan is to sell the boat. But this can be tricky because the lender has a lien on the boat and so the boat cannot be sold without his permission. Lenders may permit the sale if they see that the borrower is struggling with his payments. Some borrowers privately sell the boat, i.e. collect money from the buyer and give delivery of the boat, repay the lender and once the title reverts to them, transfer ownership to the new buyer.
People who are finding it difficult to pay back the boat loan can negotiate with their lenders for better terms; they can also rent out the boat.