Owning a boat in Australia is an essential investment because it fetches a high value, as well as allow owners and users to explore the enchanting waters of Australia. However, it might be challenging to pay for your desired boat without taking a boat loan. It’s, therefore, essential to consider you boat loans option and take note of the things to watch out for before getting a boat loan.
Do You Need Boat Finance?
Several advantages come with boat finance. They include:
- Flexible payment structure
- Little or no collateral requirement
- Tax benefits
Things to Consider Before Obtaining A Loan
Before you go on with the loan process, here are three important things you should consider.
- The cost of the boat you want to purchase: Look around for the ships that suit your taste and research the cost. Some lenders give pre-approval loans such that you know what your loan can afford before you search, and you can immediately have access to your credit as soon as you find the boat you want.
- Look out for financial institutions that provide boat loans and compare the interest rate. You should also use a boat finance calculator tool to calculate your weekly, fortnightly and monthly payments.
- Determine whether you want a secured or unsecured loan boat loan.
Available Finance Options
There are various boat finance options available for you. They include:
The loan process is quite straightforward. The lender loans out the fund needed to purchase the boat to you. Then, the lender places a mortgage on it till you can complete the payment for the loan.
Commercial Hire Purchase
An Offer to Hire or a Hire Purchase is when the institution financing the loan retains ownership of the boat until the borrower can make full payment for the ship by paying a regular instalment over a fixed time.
Boat Finance Lease
This arrangement leases out the boat to the borrower for a set period while the financing institution retains the ownership of the boat. If the borrower wishes to extend their use of the boat, they could renew the lease agreement with the financier.
Choosing the Right Lending Company
It’s vital to choose the right lender for your boat finance. To ensure you can do this, here are the following guidelines put in place by the Australian Securities and Investment Commission (ASIC).
- Your Lender Must Be Licensed: It’s one of ASIC’s guidelines that before a lender gives out money, it must have a license. So, before you make a pick, ensure that the actual lender has a license. To know this, you can check up your prospective lender in the list of ASIC’s licensed lenders in the ASIC’s Connect Professional Register.
- Your Lender Must Provide You with The Credit Guide: As a licensed lender, it must provide you with the credit guide and credit proposal disclosure document, so you can read and make informed choices.
- Your Lender Must Give You A Quote for Providing Credit Assistance: Unless you have agreed on the maximum amount, you will pay for your lender’s services.
Improving Your Credit Profile
If you’re looking to improve your credit profile, here are few tips as provided by ASIC.
Examine Your Credit Report and Score
The first thing you want to do is ensure there is no error or irregularity in your credit report before you apply for a loan. If you discover any error or inconsistency that could negatively affect your credit score, you can hire a credit reporter to fix it for you.
Discharge All or Some of Your Debt Obligations
Securing equipment finance is pretty much about the history of your past credit loans. If you have mismanaged or delayed in its payment, it could negatively affect your credit profile. Pay your bills on time, resist accruing debts and ensure your existing loan obligations are on track.
Make A Comprehensive Budget
You don’t want to take more than you can payback. If you do, it will affect your next loan application. So, make a detailed budget about your expenses and income for the time being. This would allow you to be prudent in your financial dealing.
Barriers to Enquires About Your Credit Profile
This is important if your lender decides to consider your credit report, you don’t want to make it difficult for them, do you? So, watch out for any barrier.
Paying for Your Boat Registration or License Renewal
After purchasing your boat, you would need to register the vessel as long as the boat has a motor. Luckily, the process is straightforward, and you can do it online. The process, however, varies slightly across the States.
Note that it’s essential to register your boat after acquisition for the ship to be under the protection of the Australian government. And it’s more important if the boat would be on international waters or high seas according to the Australian Maritime Safety Authority.
DISCLAIMER: The data provided above is merely a GENERAL MATERIAL for your use and consideration. They do not, and should not in any way, be considered as financial advice or recommendation from CSHTA. Hence, we shall and do not take liability for faults or mistakes in the presentation or interpretation of the facts highlighted herein. Also, we do not accept responsibility for any analysis and commentary on data present within the public domain. We advise you to consult with an accountant or financial advisor if you need specific recommendations concerning your financial needs or circumstances.