REC LENDING - BOAT LOANS 101 -

Recreational Lending NBAA recently asked Rec Lending to write an article giving an explanation on boat financing and how it works. Rec Lending works with boat loans every day and their business is centered in the Bass Boat Industry. With well over 20 years of financing experience, Rec Lending knows a thing or two about boat financing. In this article, they will give some common asked questions, miss-conceptions, and break them down and explain.

“Banks aren’t lending money on boats right now”. Rec Lending is writing loans every day. Part of the problem is that deals are not presented properly by some dealers. Deals are often turned into the wrong lenders and declines start to mount. Banks are in the business of making money with loans. Boats are good loans for banks and they want them.
“I had a few problems; I will never get a loan”. Rec Lending will work with sub-prime lenders that will take bruised bureaus. These lenders do have higher interest rates and like to see 12 months of clean, since the problem. These lenders do report to the bureau so even though the payment may be a bit higher, your fishing and re-building your credit.
“How much down payment do I need?” Down payment is always a good thing. Trade equity and cash down will always help a deal go together. The amount of down is, in part, based on the “loan to value” ratio. The book value is important to the deal. Lenders will never lend more than it’s worth regardless of down payment amount. Lenders want to be sure they have an equity position in each deal.
“How old of a boat can I get a loan on?” Most lenders like 10 years and newer. However, Rec Lending does have one lender with a classic program that will go to 15 years. They do charge higher interest rate and again a strong book value does help.
“Used boats have a higher interest rate”. This is true with some lenders, but not all.
“What score do I need to get a boat loan?” There is no magic number that works every time. We have gotten loans for people in the mid-600’s and have had people in the high 700’s be turned down. Things like debt to income, amount of credit card debt and loan amount history all count as part of the picture.
“I just got a car loan, I should be good”. Car loans have a bit lower burden of proof than a toy loan. As much as we hate to say it, a boat or RV is not a must. You need a car to get to work and the used car market is much larger than the used boat market. Just because it is a bit tougher, they are written every day.
“I am going to shop for the best financing deal”. Be careful. We have seen credit bureaus full of credit pulls and several lenders burned. Some finance people use the shotgun approach to finding a lender. We use the rifle shot. Sometimes we need two shots but the least amount of activity on your bureau, the better.
These are just some of the things that Rec Lending hears every day. Yes, the boat loan business is different than it was several years ago but that as a good thing. Financing is a specialized field. Make sure you are dealing with someone who has a track record of success. For more information about getting a loan on your next boat, contact the folks at Rec Lending. Ken, Todd or Chris would be happy to help you and answer your questions.

You can contact Rec Lending at 517-543-6921 or visit them on line at www.reclending.com.