How to Apply for a Boat Loan in 5 Steps

A boat loan is an installment loan exclusively used to finance a boat or similar vessel. A boat loan works similarly to an auto loan, and the application may mimic the loan application process.

However, boat loans are larger than most installment loans and therefore tend to be more difficult to get approved. Before applying, you must understand the ins and outs of the application process to increase your chances of being approved.

1. Check your credit history. Boat loans generally require a higher credit rating than auto loans and most personal loans. If your score is below the very good to very good range, you are less likely to be admitted.

Your FICO credit score is the most popular scoring model that lenders use frequently during the application process. If your FICO score is below 740, your chances of admission may decrease. However, each lender has different requirements. So, check the specific criteria before choosing a lender.

How to check your credit There are various ways to check your score for free. For example, gives you free annual access to your credit report. If you have a credit card, you may be able to access your scores and reports for free as an added perk for cardholders.

You can also get scores from three credit bureaus—Equifax, Experian, and TransUnion—for a minimal fee. However, your decision to check your score won't affect your credit score at the end of the day, and it's important to keep up with it. Monitoring your credit score can give you insight into why your credit score is going up or down, which can help improve your credit score and increase your chances of getting approved for a boat loan.

2. Calculate how much you need to borrow Before you commit to any application, carefully calculate the amount you will need to borrow, including associated costs such as maintenance, insurance and marina charges.

A certain amount will prevent you from borrowing too much. If you borrow too much, you may end up spending more money than you originally borrowed due to the interest accrued on the principal. It's also important to know how much loan you need, as each lender has different requirements and maximum amounts you can borrow.

You can do this by taking a close look at your budget, wealth and finances and using a loan calculator. Loan calculators will help you determine possible repayment schedules and monthly payments based on projected loan details.

3. Prequalify and compare lenders Prequalification is an option offered by most online lenders and banks; it allows you to check your qualifying odds and predicted odds without affecting your score. However, if the institution offers prequalification, you should not take advantage of it before applying in rare cases.

Qualify with at least 2 lenders, then compare quotes to more easily find the best lender for you and your credit profile. If you end up with a similar rate quote, dig into each lender's benefits or allowances to deduce which option will benefit you.

As you browse the lender's website, look out for offers such as interest discounts on signing up for Autopay, exclusive financial resources and guides, or a custom customer service experience for its members.

4. Gather required documents One of the most frustrating experiences a borrower can have when applying for a loan is starting the application and then realizing that you don't have the necessary documents on hand.

Most lenders offer same-day financing and a fast application process; however, it won't be an easy process if you don't know exactly what you need in advance. As a rule of thumb, have your income documents, ID, and your social security number ready. Similar to credit scores, each lender has different requirements, so read the criteria carefully before starting your application. Having documents in hand can also help avoid an incomplete rejection of an application. 5. Apply If you have a permanent location near you, you can apply on the agency's website or in person. After you complete your application, you may receive a status notification the same day, or it may take several business days, depending on the lender. Once approved, the lender will contact you with payment information and when you expect the funds to hit your bank account. Some companies pride themselves on their excellent customer service and may provide you with a personal representative to guide you through the process.

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