What to expect for a boat payment?

[reclending]

Nothing wrong with borrowing money. The place rates are now, it can be a good move. If you take the long terms, ALWAYS pay extra each month. Taking extra off the principle in a simple interest loan, helps knock down the effective rates as well. The biggest problem people get into is with credit cards. Those rates are the ones that will kill you. When Todd and I started selling boats (mid 80's), the best boat loans were at 12.5% variable. Lenders were also doing no money down and 180 month terms. Now that is tough to gain ground. A nice down payment, today's rates and some extra each month is a manageable loan. Let us know if we can help with anything. Ken

[Schwa713]

reclender
Not true. NEVER pay extra! Since you're the lender I can see why you say that. Put that extra money in your own savings, if you lose your job you can still make payments. Otherwise if you miss a payment then they forclose. Always save a least 1 years wages.

[superstockbigblock]

From bowhunters post
i work in the banking industry and a good guide line is the rule of 20 on a 5 year loan for example
20000 x .2 = 400 per month on 5 year
30000 x .2 = 600 per month on 5 year

Also not true 20000 x .2 = 4000, 30000 x .2 = 6000, I do not work in the banking industry.

[reclending]

Originally Posted by Schwa713

reclender
Not true. NEVER pay extra! Since you're the lender I can see why you say that. Put that extra money in your own savings, if you lose your job you can still make payments. Otherwise if you miss a payment then they forclose. Always save a least 1 years wages.

Just for your information, we ARE NOT A LENDER. We close boat loans between buyers and sellers. By paying extra each month, we mean like $20 - $50 dollars. The extra money comes off the principle and saves a ton of interest over the term of the loan. If an extra $20 - $50 a month off the balance of a loan gets you close to being in trouble, than it makes no sense to have the loan in the first place. Most lenders will not lend $$ to people that close to the edge anyway. We agree, savings and a safety net for your family are far more important than a boat loan. We assume people know those things already. Thanks, Ken

[Frog_Belly]

You should never purchase a boat any other way except cash unless you are a professional guide or professional fisherman that wouldn't be able to maintain an income without it.

[bowhunter99]

Originally Posted by superstockbigblock

From bowhunters post
i work in the banking industry and a good guide line is the rule of 20 on a 5 year loan for example
20000 x .2 = 400 per month on 5 year
30000 x .2 = 600 per month on 5 year

Also not true 20000 x .2 = 4000, 30000 x .2 = 6000, I do not work in the banking industry.

20000 X .02 = 400
30000 X .02 = 600

forgot the 0.
think most people would have figure it out, to be exact a 20000 loan with a fixed rate of 7.35% works out to be 399.33 per month for 5 years. like i said it is a quick reference when trying to figure out a payment. usually through the dealers banks will offer a better rate trying to get that business and in return banks will pay that dealer a reserve for that business

[reclending]

Originally Posted by Frog_Belly

You should never purchase a boat any other way except cash unless you are a professional guide or professional fisherman that wouldn't be able to maintain an income without it.

Any special reason? Seems like sinking a bunch of cash in a depreciating asset can cause a problem. One thing to weigh out is the interest rates on both ends. Investment interest (+) can be easy in the 6% and above range. We are seeing some people get interest rates on boat loans less than that. Besides all the rules about compounding interest, having cash on hand for emergencies is also important. Smart investing and smart borrowing can be done together. There is a world of difference between getting strapped with payments that can not be handled and using other peoples money. Let us know if we can help with anything.
Thanks,
Ken

[Frog_Belly]

Originally Posted by reclending

Any special reason? Seems like sinking a bunch of cash in a depreciating asset can cause a problem. One thing to weigh out is the interest rates on both ends. Investment interest (+) can be easy in the 6% and above range. We are seeing some people get interest rates on boat loans less than that. Besides all the rules about compounding interest, having cash on hand for emergencies is also important. Smart investing and smart borrowing can be done together. There is a world of difference between getting strapped with payments that can not be handled and using other peoples money. Let us know if we can help with anything.
Thanks,
Ken

Boat expenses, fuel, insurance, licensing, etc really eat into the costs of boat ownership even if your loan:investment ratio is positive. If you have the money for these expenses you can either save an extra month and buy a cheap boat with cash or you can practice getting really good at shore fishing.

[reclending]

Originally Posted by Frog_Belly

Boat expenses, fuel, insurance, licensing, etc really eat into the costs of boat ownership even if your loan:investment ratio is positive. If you have the money for these expenses you can either save an extra month and buy a cheap boat with cash or you can practice getting really good at shore fishing.

Hey - I have an idea, let's just agree to disagree. We will continue on in our business helping people enjoy a great hobby and past time and you can go on doing what you do (sorry I do not know what that is). Enjoy your day Sir.
Thanks,
Ken

[reclending]

Wait....I'm not quite done. I have been in the boat business since 1984. Sold, built, distributed, rep'd and now financed. To see customers come back and buy again because the prior one was a blast, is great. Also, to see 2nd generations come and turn into customers is also a plus. In all those years helping families spend more time together and building memories is by far the best. Kids and wives fishing, skiing, taking a ride on a river, color tours, vacations.........I love the boat business.
Been a good back and forth. You should know, we started this business because people needed help dealing with lenders. Some loans and buyers we do pass on or advise some to work on some credit issues first. We need customers today as any business does. But we also need customers tomorrow and in years to come. We ARE NOT BANKERS, and never even played one on TV
Do I dare ask where "Frog Belly" came from. Please do not send any pictures to help explain.
Thanks,
Ken