Anyone who has cherished the dream of owning a boat for years and has a secure income sooner or later thinks about buying or leasing a motorboat or even a sailing yacht. But unlike, for example, when buying a car, loans for boat financing are not a natural part of the bank portfolio. This is because the granting of boat loans for the financing of boats, yachts or ships is subject to special conditions. However, if you do not want to lease but want to buy, you will also find providers of boat loans who are familiar with the subject matter and offer good conditions.
What should be considered when financing
- Size and type of boat or yacht
- Additional costs for maintenance and insurance
- Berth in Germany, Europe or in non-European countries
- Mooring fees or similar costs
1. What makes boat loans so special?
A loan to finance a motorboat or sailboat is basically an installment loan , albeit over relatively large sums. Similar to a car loan, the purchased boat serves as collateral for the lender, ie a boat loan is usually a so-called earmarked loan. If you want to buy a small boat that costs a little more than 10,000 euros, and perhaps even has a mooring very close by, you can often finance the purchase through the house bank or with the help of the installment loan from a direct bank. For larger purchases, such as if it is to be a luxury sailing yacht, which is located in other European countries, you have to resort to funding for special providers, also because of the formalities associated with the boat purchase. This is worth a thorough search and comparison of providers, because financial service providers who do not often loans for boat financing, the borrower can usually offer a low interest rate.
1.1 Do not forget the additional costs!
Unlike car loans, boat financing plays a significant role in the financing of the boat and should be included in the financing planning. This includes not only the maintenance of the boat or the yacht, but also the cost of the berth or for the purchase of a boat trailer. In addition, there are insurance companies – here, for larger boats, the sum of 100,000 euros is called minimum insurance sum!
2. Considerations before the loan application
As a boat loan is in many cases a substantial loan, some considerations have to be made in advance. Absolutely recommended is the realistic assessment of your own financial situation. In addition to the price of the dream boat one should bring the expected additional costs as exactly as possible in experience and if necessary rather too high to calculate too low.
It is particularly advantageous for installment loans for large sums if the borrower can raise part of the amount himself. This often helps on more favorable terms – a fact that is also true for other large purchases, such as construction loans . Here pays the saving of a corresponding amount, even if you have to postpone the dream of your own boat for a while.
For the interest and processing fees of the boat loan is not only the total amount of importance, but also the duration and thus the amount of the monthly installment. If you can quickly pay off your credit, you will of course benefit less, but the monthly burden on the household will be higher. Credit calculator online and credit comparison portals allow a calculation of different payment modalities. So the borrower can make an informed decision.
In the search for a financial service provider for the boat loan also the competence and seriousness of the provider plays an important role. A background check on licensing and regulation is advisable, and of course the study of the general terms and conditions as well as later of the fine print in the proposed loan agreement.
3. Who offers loans for boat financing?
If you’re looking for a cheap loan to make your dream come true, you can search online and find what you’re looking for – not only direct banks offer loans in the desired amount, there are also providers from the field of marine financing, who trusts in boat financing are. One should also include the house banks of the shipyards in the search, because these banks are also familiar with all components of the earmarked installment loan for the purchase of a boat or a yacht. But you should also ask at your own house bank, especially if you have previously received larger loans and paid off easily. In such cases, the branch bank sometimes counsels “easy-care” existing customers also at the interest rate for the boat loan.
3.1 Provider of loans for boat financing
- Branch banks or direct banks
- House banks of the shipyards
- Specialized financial service providers in the field of marine financing
- Personal loans, if necessary via credit intermediaries
It should be noted that in classic branch banks or direct banks in individual cases, a successful boat loan on good terms, without having to search too long. Private lending is likely to make research harder – unlike buying a car, the borrower will find it harder to find a lender with knowledge of the subject matter and can estimate the value of the boat as collateral before embarking on financing. At least the interest rates are then probably higher due to the risk than reputable special providers for boat financing.
4. It depends on the type. Not every provider finances everything!
Another important factor in boat financing is the type of boat you want. Not every provider finances all types. In addition to smaller rowing or motor boats, as anglers use them on inland waters, one distinguishes between larger boats on equipment and length. There are motorized quality inflatable boats, motor boats and sailboats with and without motor. Is a living room with cabin and cooking facilities available, one speaks of a cruiser, if the dream boat has several decks, it is a yacht.
Boats used on inland waterways usually have a length of between six and ten meters; seaworthy sailboats or motorboats are usually longer. There is no upper limit for yachts in particular – a yacht suitable for high seas is usually 20 m long, luxury models can have a multiple of this length.
Also catamarans can be financed by a boat loan – this boat type has two connected hulls. Catamarans are available as engine and sailing catamarans.
Last but not least, houseboats are mentioned, which enjoy uninterrupted popularity and represent a maritime version of the motorhome. Here, too, the possibilities range from simple to luxurious.
Whose heart depends on its own yacht, which will find that there are now special providers specifically for yacht financing. This is because the purchase price, but also the insurance costs are much higher than other boats. As a result, financial service providers make a significant distinction between boat financing and yacht financing.
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5. The boat as security for loans for boat financing
Since a boat loan is usually given with a purpose binding, the object, in this case the boat, serves as security. Therefore, in addition to the personal data and information about the financial situation of the borrower, lenders also require exact information about the object of purchase. This includes information on the origin, such as invoices, serial numbers and possibly independent reports on the condition as well as information on the berth. The required proofs are similar, if you will, to the documentation required for a car loan .
Financers, whether they are banks or specialized financial services providers, typically ask for details on:
- Name of the manufacturer or shipyard
- boat type
- Hull number or serial number
- Seller Information
- For used boats, the number of previous owners and the original invoices
- purchase price
- residual value
- Photos of the financing object
- In the case of foreign purchases, the “Bill of Sale” and the tax receipt
In addition to these details, other factors are added. Who wants to finance a used boat with the help of a boat loan, must submit a register extract, moreover, the evidence of liability and comprehensive insurance, often a misappropriation insurance. Since the value of the boat determines the coverage, the lower limit here is 100,000 euros.
In addition, an opinion on the condition of the object is important to the financier. Understandably, banks here do not rely on the information provided by the buyer or seller, but prefer a professional opinion, which determines the condition, equipment and value of the boat and thus sets the equivalent of security.
6. The berth and the use of the boat
The berth and the use of the boat are essential elements for lending. A berth in Germany, but also in a country within the European Union, is conducive to a trouble-free execution of the desired credit. A non-European berth, on the other hand, is usually in the way of a loan for boat financing, precisely because of the procedure described for determining the value of the boat as collateral. Often from a value of 100,000 euros by the lender for protection a proof of the entry in the ship register of the berth is required.
A similar situation arises in the use, therefore, it is here explicitly asked whether the boat itself should be used or chartered. Lending or renting to third parties beyond personal use affects the conditions of the boat loan, because the careful handling of the boat is not ensured to the same extent as when using the boat by the owner, even if this is on board during the chartering. Moreover, especially for smaller boats a license can be relatively easily acquired without the requirements would be too high. Changing users especially with small boats thus lead to a higher wear of the boat. Therefore, lenders distinguish clearly between the own and the commercial use of the financing object.
7. Credit comparison calculator also use in boat financing
Thanks to the search options online, future boat owners can also use comparison computers for this type of installment loan. The details of the desired loan amount, the term and the monthly installments are entered once, and the loan calculator immediately returns a list of eligible providers, including the APR and debit interest rates. Thus, at first glance, a selection of particularly favorable lenders can be made. Since the purchase of a boat is usually a big loan, differences of just one percent pa are already crucial if you do not want to spend unnecessary expenditures – often the interest rate differentials are even greater. With one click you usually get to the website of the provider, where with more detailed information on the personal situation and the purchase object a non-binding loan proposal can be requested.
Providers of boat financing bring a certain amount of routine here, and the applicants usually decide on the basis of a certain previous experience for the desired boat and already know what details of the financing and buying process brings. It is in the interest of the borrower that a good Schufa score should be available for large loan amounts. Extremely advantageous for the design of the interest rates is already existing equity or a life insurance that can serve as collateral.
As with installment loans, the following information is required for the loan agreement:
- Information on age, place of residence and employment situation
- proof of income
- credit check
- Desired duration and loan amount
- Amount of available equity, down payment and final installment
- Special repayments and early repayment
8. Conclusion on boat loans: the comparison is worthwhile
Who wants to implement the desire for a private boat or even a yacht in action, is usually not on a whim. In many cases, the future boat owner has already familiarized himself with the types of boats in question, knows the current prices and has at least approximate ideas of the use and the desired berth. Especially when buying smaller boats, you can sometimes finance through the house bank, with large loans and special conditions, such as at berths in other European countries, maritime financial services are experienced contact. In any case, the use of a loan calculator , as provided by many finance portals , is worthwhile for a comparison of the providers. Since boat loans are earmarked loans, the conditions are a bit different from conventional installment loans. If you have all the documents you need, you can expect to get loan offers quickly. The valuation depends not only on the terms of the loan, but also on the possibility of early redemption or regular special repayments. The conclusion of a residual debt insurance can also help to lower interest rates and provide security for successful long-term loan repayment.