1st Boat Questions

jimbob · Criminal Joined: 24 Feb 2003 Posts: 66 City: Aiken, SC

Ok, so I've finally reached that point in my life after 10 years of being able to afford a friggin boat.

I've got a pretty specific idea of what I want (00-03) X-Star (Pro205 V) or a SAN (98-03).

I'm guessing my price range for these boats will be in the 28-35k range, but I'm not exactly sure.

My main question is where you guys have gone for boat loans. My credit union does 4.99% APR twice a year but the max loan term on a boat is 5 years, and I'd much rather pay a little more for a 10 year loan considering how well MCs, and CCs hold their value. Any advice on where to find a good 10 year loan rate? Also, wondering what would be a good 10 year rate lowest I've seen is 7.5% for 10 years.
Thanks,

Chattwake · Posted: Jun 11, 2007 6:17 am Post subject:

My advice is that for around 32k you can get an 02 Xstar or SANTE. As long as you borrow over 25k you can typically push your payments out 12-15 years. I borrowed 35k on my VLX. At 15 years w/ 7.5% my payments are $335/mo. It's better to push your payments out as far as possible (provided you can get the same rate) that way if you pay a little extra each month, it will go straight to principal.

I would look into the financing companies advertised on boattrader. Also, if you get a dealer involved, typically they will fight to get you the best numbers. Mine is financed through Bank of America. Right now, 6.99-7.99 is the range of rates you can get with good credit.

Chattwake · Posted: Jun 11, 2007 6:18 am Post subject:

I'd also look on www.tmcowners.com for used mastercrafts.

Bambamski · Posted: Jun 11, 2007 6:50 am Post subject:

I don't understand you guys getting boat loans???

Why don't you just get a line of credit and put your debt on that. Prime plus 1/2 a percent and pay it down as fast or as slow as you want.

I will never get a conventional loan again. It makes ZERO sense.

tonality · Soul Rider Joined: 20 Aug 2004 Posts: 435 City: DFW

Aren't unsecured lines of credit compounded differently? I can't see that being the smart option...

As well, many of us lesser mortals need more structure on our payment schedules to avoid the "I'll pay it off another day" syndrome. Wink

Broccoli B · Posted: Jun 11, 2007 6:57 am Post subject:

If only we were as enlighted as Bambamski. Rolling Eyes

Bambamski · Posted: Jun 11, 2007 7:00 am Post subject:

so you'd rather pay 8% for 15 years vs 4.75%? and pay if off faster

ok Rolling Eyes

pet575 · Posted: Jun 11, 2007 8:31 am Post subject:

Most of those rates are not calculated exactly the same way, with the line of credit being an APR that is calculated daily like a credit card. The minimum payment may be lower, but if people get baited into paying only the minimum payment or money gets tight to where that is all they CAN pay then they end up taking longer to pay it off and pay WAY more than they should. They key is in being able to (1) get a line of credit large enough to cover the asking price; AND (2) get a decent interest rate for the line of credit.

BUT, assuming you can, Bambamski is right. If you are either disciplined enough or in a good enough financial position to get the line of credit and then say, "I'm going to pay $300 a month no matter what" then you WOULD pay it off sooner and for much less money interest-wise.

jimbob · Criminal Joined: 24 Feb 2003 Posts: 66 City: Aiken, SC

I have good credit (around 660 score) I just don't see how you get an unsecured loan that would have a cheaper rate. It doesn't make sense for a bank to loan you money with no collatoral cheaper than they would if they have a title to a boat that doesn't depreciate as collatoral.

Bambamski, I'm all for a lower interest rate just point me in the right direction if you could. Cool

Chattwake · Posted: Jun 11, 2007 11:05 am Post subject:

hey jimbob, my brother lives in Aiken, SC. Small world.

oshensurfer · Posted: Jun 11, 2007 11:14 am Post subject:

jimbob, Do you own a house? Any equity?

jimbob · Criminal Joined: 24 Feb 2003 Posts: 66 City: Aiken, SC

Yeah, but the house has it's own mortgage on it. I don't have anything to put up for equity towards a 30k boat.

02lightning, yeah that's pretty crazy. Aiken's pretty small only about 40k people here and I've only met a couple of guys that ride and one of them sold their boat so looks like I'm gonna have to buy my own so I can get back on the water.

pet575 · Posted: Jun 11, 2007 12:02 pm Post subject:

Jimbob, they make their money based on speculation. A credit card is also an unsecured line of credit. Know how they send you those offers to transfer many balances to their account for a low interest rate (sometimes only an introductory rate), and they'll give you like $30-40K as a limit? That is essentially a line of credit, but they are also going to do you a huge favor by issuing you a card so you can buy more stuff with it later too. Very nice of them.

So ask yourself, "How is a credit card making money by giving me that low rate?" Well, they ARE going to make SOME money based on the low interest rate X the high balance you transferred. But, they are also speculating that you will not pay much over the minimum payment and that eventually they will make a ton of money off of you because you won't make a high enough payment each month to knock that principle down.

They make money because the statistics say that the majority of their card holders will pay only the minimum payment the majority of the time. Ever seen those calculations where it says that it will take 25-30 years to pay off a card if you just paid the minimum balance? Now think about it- you are putting $30K off for all of that time. They make way more money over that amount of time than the bank would make on a straight 10 year note.

See, the straight 10 year note REQUIRES you to make the payment on both the interest and the principle. Since it is a structure payment of the principle, there is a set date in which you will pay off the principle.

What Bambamski is saying is "beat them at their own game." Take the low rate on the unsecured line of credit. But, internally make a schedule of payments so that you make a set payment each month of both principle and interest. Treat it like that 10-year note. Then YOU save the money.

jimbob · Criminal Joined: 24 Feb 2003 Posts: 66 City: Aiken, SC

Ok, I certainly have the discipline (aka automatic withdrawls) to handle such a scenario. My question is where do I look to find a low rate unsecured line of credit like you speak of.

pet575 · Posted: Jun 11, 2007 2:30 pm Post subject:

Local banks should offer it. I have one with Bank of America. I think that many of the major credit card companies offer them as well. I've had lines of credit in the past with Chase and MBNA.

kmagnuss · Posted: Jun 11, 2007 2:50 pm Post subject:

pet575 · Posted: Jun 11, 2007 6:21 pm Post subject:

In case you get hurt and can't work, it won't hurt to miss work.