Boat Loan

[Choporoz]

Welcome to 2023.  I'm only couple few weeks into 48 month new boat loan from my historically great credit union.  Credit score in 98th percentile.

 

9.15%

[GReb]

The reason a lot of dealerships can sell at cost is because they get a sizable portion of the rate. If the dealer is quoting you 7% you can bet he is paying less and profiting off the difference. I’ve had rates magically cut in half from threatening to walk out the door. I’m not saying that’s always the case but it’s definitely a card dealers have in their back pocket. 

[casts_by_fly]

Another option to consider is a home equity line of credit. They work like a credit card in that you have an available limit, but are tied to the equity in your house. If you are more than 20% paid or so on your mortgage you should be able to get one through your bank. We just opened one 6 months ago to finance our outdoor kitchen renovations. We get paid big lumps once a year in bonuses which we use for things like this. Having the revolving line allows us to choose when to spend the bonuses if we need to commit the money a couple months before we get them. Ours is interest only and variable rate but you can get them with fixed rates and percentage of principle payments just like a loan would have. The benefit is that when you pay it off the loan isn’t gone. The line of credit is still available to you. So we will pay ours off in March and have that entire line of credit available to us for other things. If we wanted to buy a car or boat with it and the rate is better than through a dealer or other offer then we use it. If we don’t use it then we have a high ‘available creditk and great debt to credit ratio on credit reports. 

[J._Bricker]

A 7% interest rate on a boat loan is probably the going rate given the current state of the economy. A couple years ago a boat loan was around 4-5% depending on your credit, the length of the loan and how much you put down. Which is definitely better than the 16.75% interest rate for our first house. Every time I think of that rate I just gotta shake my head

[volzfan59]

Things must have really changed a lot since I left BPS. I sold boats for one of my four years there. At the Kodak/ Sevierville BPS, you could arrange your own financing, go thru who ever financed boats for us (I don't remember) or we would use TVA Employees Credit Union (Tennessee Valley Authority) Also, you could put as much down as you wanted with any of the banks. Whoever it was that did the BPS financing required a minimum of 10% down. TVA didn't require anything down, depending on your credit score. With the increases in interest rates, the rate you were quoted might not be to bad. I don't know what they are now. I pay cash for everything. Been out of debt for years.

[slonezp]

The more you put down, the better the rate. If your credit is as good as you claim, shop around. Go direct to lender. 

[flyfisher]

The other thing to consider is how do you know you have great credit.  A lot of the credit monitoring agencies are not very accurate.  I know a couple of credit card companies give FICO scores which are a little more accurate when looking at lending than places like transunion etc...  I am pretty sure you can get a free copy of your credit report from the major credit bureaus and while it won't be a score it will show you what is on there and you can pretty much tell where you stand.  When a creditor reports to the agency makes a big difference in things like available credit.  I had a  credit card that used to be my primary and i realized they would report to teh agencies prior to my payment posting which made it look like i had a balance when i didn't.  I promptly stopped using that one.  Available Credit is a major part of your credit score.

[Bankc]

16 hours ago, casts_by_fly said:

Another option to consider is a home equity line of credit. They work like a credit card in that you have an available limit, but are tied to the equity in your house. If you are more than 20% paid or so on your mortgage you should be able to get one through your bank. We just opened one 6 months ago to finance our outdoor kitchen renovations. We get paid big lumps once a year in bonuses which we use for things like this. Having the revolving line allows us to choose when to spend the bonuses if we need to commit the money a couple months before we get them. Ours is interest only and variable rate but you can get them with fixed rates and percentage of principle payments just like a loan would have. The benefit is that when you pay it off the loan isn’t gone. The line of credit is still available to you. So we will pay ours off in March and have that entire line of credit available to us for other things. If we wanted to buy a car or boat with it and the rate is better than through a dealer or other offer then we use it. If we don’t use it then we have a high ‘available creditk and great debt to credit ratio on credit reports. 

True.  But this can be dangerous.  If something happens (like you get laid off) and you can't pay it back, you could not only lose your boat, but your house.  Now you have to make two monthly payments or risk the bank foreclosing on your house (assuming your still making mortgage payments on our house).  It can be good if you're in a stable situation and that's not really a risk for you.  But you're putting a lot of eggs into that one basket.  

2 hours ago, flyfisher said:

The other thing to consider is how do you know you have great credit.  A lot of the credit monitoring agencies are not very accurate.  I know a couple of credit card companies give FICO scores which are a little more accurate when looking at lending than places like transunion etc...  I am pretty sure you can get a free copy of your credit report from the major credit bureaus and while it won't be a score it will show you what is on there and you can pretty much tell where you stand.  When a creditor reports to the agency makes a big difference in things like available credit.  I had a  credit card that used to be my primary and i realized they would report to teh agencies prior to my payment posting which made it look like i had a balance when i didn't.  I promptly stopped using that one.  Available Credit is a major part of your credit score.

Yup.  And it's often a good idea to have extra credit cards you don't use, if you're trying to build your credit.  And never cancel a bunch just before you need a loan, as that can look bad.  I've got excellent credit and a bad job, but I built that credit partly by having a bunch of cards and cycling between them for purchases.  Then I pay them back online about a week later after the charges have posted.  Not only do I get the cash back from my credit card (which is small, but adds up over time), but it looks great on my credit report.  The trick is to stay disciplined and not treat it like a credit card.  Don't spend money you don't have.  Instead, just funnel your normal purchases through them temporarily.

[flyfisher]

And as far as the credit card usage goes, you don't have to use them to build credit.  A zero balance card still gets counted as paid as a zero balance.  I am with you though about rewards, I pay for pretty much all my Christmas shopping with rewards each year.

[Darth-Baiter]

my accountant told me to never ever tie a fun hobby to my home thru a home equity loan.  

[Choporoz]

7 minutes ago, Darth-Baiter said:

my accountant told me to never ever tie a fun hobby to my home thru a home equity loan.  

Tell me fishing is just a fun hobby once more...I dare you

[Darth-Baiter]

41 minutes ago, Choporoz said:

Tell me fishing is just a fun hobby once more...I dare you

(backing away from computer now...avoiding eye contact...slow, slowly...)

[Bankbeater]

Personally, if a seller told me I couldn't pay off a loan early I would get up and walk out.  I would come back only when I had the full amount to make the purchase.

[volzfan59]

2 hours ago, Darth-Baiter said:

my accountant told me to never ever tie a fun hobby to my home thru a home equity loan.  

You have a smart accountant.