Boat Finance in Australia

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What Are Your Options for Boat Finance in Australia?

There’s nothing better on a hot summer day than being out on the water, relaxing on your boat. However, affording a boat purchase can be intimidating, and upkeep costs can add up quickly as well. There’s a reason that some people say that B.O.A.T. stands for “Break Out Another Thousand!”

Boat loans are a great way to spread out the cost of the purchase over a longer period of time, rather than having to come up with the money all at once. Read on to explore the different boat finance options available in Australia.

Contents

    What is a boat loan?

    Boat loans are personal loans that are specifically used to cover the cost of a marine vessel. Much like with car loans, boat loans can be sought out for either personal or business use. Boats can be bought from private individuals or at a commercial store, and boat finance options exist for both of these. Boat loans for bad credit are also available, so you can get your own boat even if you have a weaker credit history.

    Many people are also interested in getting jet ski loans. While jet skis are not the same as boats, they are still marine vessels and many lenders will have jet ski finance options available.

    What goes into the cost of a boat?

    The price tag of your upcoming purchase is one of the most important things to know before buying a boats.

    The boat itself is the biggest cost, which ranges based on body type, size, and condition$20,000 to $200,000
    Registration and license fees cover compliance costs for berthing in Australian waters$70 to $700
    Equipment includes electronics, accessories, and passenger safety gear like life jackets$1,500+
    Fuel can get expensive quickly, based on the size of your engine and your frequency of use~$300-500 per fill
    Maintenance is an essential but expensive component of upkeep, just like for any vehicle~10% of initial cost
    Insurance covers you in the event of damage, and varies based on the boat’s value$500+ per year
    Storage includes mooring fees while the boat is in the water, or dry storage on land$500+ per year

    Types of boat loans

    Personal use

    Most people shopping for a boat are individuals or families looking to have fun on the shore. Common options for these types of purchases include:

    • Secured loan

      This type of loan uses the boat itself as collateral, meaning that it can be seized by the lender if you fail to make your payments. These loans usually have low, fixed interest rates and shorter loan terms.

    • Unsecured loan

      Unlike a secured loan, this loan does not require putting the boat itself on the line. Unsecured loans can be used to help cover additional costs beyond the boat itself, but interest rates are higher.

    • Dealer finance

      Certain companies have their own loans available. For instance, Yamaha boat financing options are quite popular and sometimes come with perks like low interest rates or discounted fees in order to entice buyers.

    When looking at loans, it’s also important to understand the main types of boat loan interest rates. A fixed rate will stay the same through the life of the loan, while a variable rate can change based on the Reserve Bank’s cash rate.

    Business use

    Some boat shoppers have a commercial use for the vessel in mind, like tourism or fishing. These are the boat finance options available in this case:

    • Chattel mortgage

      This is a popular finance structure for business purchases. Profits from operating the boat are used to help pay off the chattel mortgage.

    • Hire purchase

      Similar to other loans, this boat finance structure allows someone to hire the vessel while paying for it in regular instalments.

    • Finance lease

      In a marine finance lease, the lender still owns the boat title, but the boat is being leased to the borrower for an agreed-upon cost and duration.

    • Rental agreement

      This is a shorter-term arrangement similar to a lease, where the financier keeps the title while the other party pays to use the vessel.

    Tips for getting the best boat loan

    Everyone wants to make sure they’re getting the best deal, particularly with a major purchase. The boat finance and jet ski finance processes both have several complicated steps. As you navigate the process, here’s what to keep in mind in order to make sure you get cheapest boat finance option possible:

    • Interest rates and repayment: Compare the boat loan interest rates you’re offered, and see what the repayment process will be like. Remember that you’ll be paying the repayment sum on a regular basis, including during the off-season when you may not be using the boat.

    • Extra fees: Make sure you watch out for establishment fees, ongoing monthly service fees, and late payment fees.

    • Loan limit: Some providers have higher limits than others. Be wary of borrowing excess funds, since the bigger the loan, the harder it is to pay back.

    • Loan term: Boat loans tend to have longer terms, which likely means smaller individual payments, but could result in you paying more money overall. Note that some lenders cap the loan term at seven years.

    • Other convenient features: Some lenders allow you to get ahead on the loan, which provides extra breathing room down the line. Lenders can also be flexible on how frequent the payments are (weekly, biweekly, or monthly).

    Boat finance FAQ

    Can I get a boat loan with bad credit?
    Yes, boat loans for bad credit are available with a number of lenders. However, these loans will carry higher interest rates and the approval process may be more stringent.
    How do I apply for a boat loan or jet ski loan?

    To apply, you will need to be:

    • At least 18 years old
    • An Australian citizen, permanent resident, or valid visa holder
    • Employed or receiving regular income, and with a solid credit rating
    • You will also be asked to provide:

    • Proof of identity (driver’s licence, passport)
    • Proof of income (payslips, tax records)
    • Details of any other financial obligations (outstanding debt)
    • Details of any other assets (particularly vehicles or real estate with mortgages)
    Can I get a loan for a used boat?
    Yes, you can get a loan for a used boat. For a secured loan, the boat will need to be in good condition and have a lower age, since the lender needs to be able to resell the boat in case of loan default. For older boats, you will likely need to seek an unsecured personal loan and use that towards the purchase.
    What’s the difference between boat loans and personal loans?
    Boat loans are specifically designed around boat finance and jet ski finance programs, so they often have low interest rates because the boat itself is the collateral. In contrast, personal loans can be used for any large purchase, and they are not custom-built for boat financing. Personal loans usually have no collateral.
    What should I avoid when searching for a boat loan?
    Make sure you are dealing with a reputable, licensed lender. You should also avoid taking on boat loans if you are already currently struggling with other debt. You don’t want to spend thousands on loan interest and boat expenses, only to have the vessel repossessed.
    What type of boat can I finance?
    You can find finance options for all types of marine crafts, and you can get loans for both personal and commercial use. Boat finance can apply toward sailboats, speedboats, jet boats, yachts, dinghies, powerboats, motor cruisers, or even jet ski loans.

    Boat finance conclusion

    When shopping for a boat loan or jet ski loan, there are countless factors to consider and many different choices to weigh up. Boat finance options can differ in terms of interest rates, loan terms, repayment plans, and other details. The most important thing to remember is that boat costs stack up extremely quickly, and it’s easy to spend more money than you initially expected. Getting the best boat loan rates is key to making sure nothing stops you from getting quality time out on the water.