A boat is quite expensive and it is almost impossible for a person with limited means to pay for it up front. But boat loans are quite easily available and they help to realize a person’s dream of owning a boat.
Different lenders charge different interest rates and a prospective boat buyer would want to get the loan with the lowest interest rate.
Interest rates for loans are generally dependent on various macro factors like the state of the economy and the interest rate policies of a country’s central bank.
Online, one can see various advertisements of boat loan lenders claiming that they offer low interest rates. But the fact is that at the micro level, the interest terms are dependent on certain factors related to the borrower.
The general financial situation of the borrower would be considered while arriving at the interest rate he would be charged. Too many loans and limited ability to pay them may make result in a higher interest rate.
A high credit score would attract a lower interest rate. If the borrower has bad credit, he may be either refused the loan or charged a high rate of interest, to compensate for the risk the lender is taking by granting him a loan.
The lender would want to know the borrower’s income to gauge his ability to repay the loan. If the income is limited or his job is perceived to be unstable, the loan rate would be higher.
If the age of the boat is on the higher side, it would have a limited resale value. So when a loan is applied for the purchase of such a boat, the lender may charge a high rate.
So, if one wants to actually know what rate he would be charged, there is a provision for entering the above details in the lender’s website. The interest rate is then computed automatically and displayed and the applicant would know whether it is a low interest boat loan.