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Boat loans for October 2022 in Canada

Apply for a boat loan at a bank, verified by our specialists. On 03.10.2022 0 car loans. are available to you. Increase your chances of getting a loan - fill out an online application with a free credit rating check.

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Interest rates on car loans in various Canadian provinces

Section 347 of the Criminal Code of Canada imposes the cap on the maximum allowable annualized interest - 60%. Any higher interest charged is considered usury and is illegal.

In Canada, average auto loan interest rates range from 4.5% to 10%. However, a borrower can expect to be charged up to 36%.

Factors determining car loan interest rates include the Bank of Canada’s key interest rate, the client's credit score, whether the car is new or used, the history of the vehicle, and whether the interest rate is fixed or variable. In addition, 0% interest can apply to customers with exceptional credit.

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Reviews of boat loans

GoDay
1.6
JUDGEV
JUDGEV
26.05.2022 at 15:46
the application is easy and takes less then 5 mins to fill out. but the funding time is quite long. if looking for instant funding then its not here...
Review
Boat loans for October 2022

What is a boat loan?

Boating, water sports, and yachting can be hobbies, purposes of life, or professions. In Canada, abundant with its rivers, lakes, and saltwater bodies, you can enjoy all of these if you are willing to invest time and money.

On average, Canadians earn over $50,000 annually, while boat costs range from $25,000 to $80,000. Of course, it all depends on available savings, the type of boat chosen, and household expenses regarding affordability and available resources. But looking at average statistics, it's clear that there's a gap between income from the job and the cost of the boat. As a result, boat loans are a popular bridge between the dream and the possibility of buying a boat.

A boat loan is a credit product offered by banks, credit unions, online lenders, specialty retailers, and other lenders that offer financing with the following criteria:

  • the loan is granted for a fixed term;

  • it must be repaid;

  • the borrower pays a fixed or floating interest rate for the use of the money borrowed from the financial institution or another lender and additional loan fees.

There is one detail that distinguishes boat loans from car loans. Boats are popular, but only one in two Canadians owns one because it is expensive, and since it is a water activity, there is some risk involved. It takes pretty good skills, and even if you are fishing or spending a weekend on the lake, you need to know some safety measures to make your time enjoyable and safe. Lenders often consider this criterion when they decide on the approval and offer the conditions: the experience of the future boat owner. The more experience the borrower has in this area, the lower the lending risk. There is still some risk, of course, but lenders want to ensure the loan is repaid no matter what. So they might require insurance for the borrower against job loss, life and accident insurance, boat insurance, etc.

Attention! Boat loans have different costs that vary from lender to lender and depend on the borrower's credit risk, credit score, and credit history data. Therefore, the cost of the same loan product depends on many factors.

Boat loans help you to finance your best deal on the boat purchase. Compared to relying on their savings, boat loans bridge customers to a higher class of boats.

It is possible to buy a new or used boat without kicking the can down the road, even if a customer does not have enough money to pay full price at the moment. First of all, you have to answer several questions for yourself:

  1. Do I want to buy a new boat or a used one: what is affordable for me?

  2. What do I want to use it for?

  3. Where do I want to store it?

  4. Do I want it to be trailerable so I can transport it to different places with my vehicle or not?

  5. What amount can I pay as a down payment?

  6. Is my boating experience sufficient for the type of boat I want to buy?

  7. What risk am I willing to take when I choose a loan product and sign the loan agreement (fixed interest rate or floating interest rate that can change significantly over time)?

  8. Do I want to find all possible tools to lower the monthly installments, or is this not crucial (secured loans usually have lower interest rates because the risk for the lender is somewhat lower)?

  9. For how long do I expect to be repaying the loan?

  10. Will I use the services of a financial advisor to analyze and find the best loan option, or will I do this myself by searching for information online and offline and using a boat loan calculator?

You can create your list of essential questions to ask before applying for a loan, but it's helpful to take the time to do this if you are interested in getting a good deal that matches your expectations and capabilities. Also, remember that a reasonable market offer should balance supply and demand. In other words, ensure that your interests are reflected in the loan product you choose before applying for approval or pre-approval.

Best rates are offered for high, excellent credit scores, but if a client has no credit score or a bad credit score due to past reasons, there are options for getting approved with alternative lenders.

To get a good deal, make sure that you choose the right type of boat (every next boat gives more and more experience and helps to get determined about needed features):

  • An all-purpose fishing boat can be used for much more than fishing. You can enjoy fishing in fresh or salt water in the company of friends, fishing for a big game, spending time with family, or relaxing on the water. These features distinguish this boat from simple fishing boats that do not have a cabin or windbreak and are powered by human power. In addition, this boat can be transported using your vehicle.

  • A rowboat is a classic human-powered boat used for fishing. Such boats have enough space for fish on board and are pretty stable on the water. They are best suited for calm waters; for the open sea, it is better to look for something more sheltered. Such boats are light and can be transported by car. The material of the boat can be not only wood but also aluminum.

  • Kayaks are of different kinds: used for sport, for fishing, for extreme trips on the water, etc. To keep a kayak stable on the water, one has to have experience. In addition, the kayak’s length influences its speed and maneuverability: shorter ones are more maneuverable, and longer ones are faster. Fishing kayaks have a motor. Kayaks are suitable for all kinds of water: rivers, the salt water of the ocean, ponds, and lakes.

  • A canoe is an excellent solution for fishing in ponds, lakes, and rivers. A great feature is that canoe feels good at any depth. Short canoes are fine for river fishing, but it is better to check other alternatives if you sail in more aggressive conditions. It would be wise to avoid anything rougher than 1st class. Like kayaking, fishing on a canoe requires good skills to keep balance. A canoe is easy to transport and is not expensive, on average, $150-$2,000.

  • Inflatable Boats keep balance and get to fishing places very quickly. They are not too heavy, and at the same time, they give sufficient room for the occupants. It has an engine and can go even through shallow waters. It is trailerable. A professional model may seat over 30 people, but its cost may be close to $100,000. The life span of such boats is over ten years, and they are not created for deep sea fishing.

  • Skiff boats are anglers' best friends when flying, fishing, bonefishing, or just spending time on the water. Usually, they are made of wood or fiberglass or a mixture of both materials. Such boats are well balanced and provide space for the fish caught. The price range is from $700 to $85,000, and there are models with powerful engines or trolley motors, which are usually powerful enough.

  • Jon boats are classic fishing boats, thanks to their affordable price and quality. They are light and easy to transport. They have an apartment bottom. They do not require complicated maintenance. Fishing in the area close to the shore is not recommended. They are suitable for calm waters and lakes. Fast waters need a different model that would be safer in more aggressive conditions.

  • Deck boats have more space than the previously mentioned models. They are powered by an engine and are suitable not only for deep-sea fishing, bass fishing, etc., but also for spending time on the water. Moreover, fishing and chilling on the water can be combined simultaneously. Unlike the previously mentioned boats, this one is suitable for fresh and salt water. The price range is from $6,000 up to $100,000 or more, depending on the brand and equipment. The size of such boats makes them unsuitable for sailing in shallow waters.

  • A runabout is a boat for recreation, picnic on the water, or a party, but It is not a yacht. The price of this boat depends not only on the equipment but also on the material from which it is made. Such boats are a good solution for calm waters such as bays, ponds, and lakes.
    The price range starts from $5,000 and goes up to $200,000 and more.

  • Bass boats are fishing boats for calm waters, including large rivers. The V-shape allows for good speed, and the shallow design makes it easier to navigate shallow waters. Such a boat can cost as much as $100,000 or more. Experienced fishermen say that it is better to have other boats for salmon fishing.

  • Bay boats are made for the ocean, they have room for company and fishing, and the boat is high and strong enough to sail in the sea. Usually, such boats are made of fiberglass, wood, or a mixture of these two materials. A fully clad boat costs about $400,000.

  • Power catamarans provide an efficient means for fishing and sunbathing. Size and price depend on the model. The price can be as high as $3.5 million. Due to their relatively large size, power catamarans would not be suitable for sailing in most lakes and rivers, but sea, coast, and deep water are perfect for such models.

  • Centre console boats are classified as medium-sized fishing boats. They are suitable for various water bodies: oceans, rivers, and bays. The size allows about 25 people on board, and still, there is enough space. Even larger boats of this kind offer modest amenities for overnight stays. However, since the price can be as high as $1 million, consider what features are important to you. If you want to spend the night on the water, you should choose another model that offers more comfort.

  • Pilothouse boats have a closed cabin for the driver and up to 5 passengers. There is no room to sleep there. If you want to be comfortable on this boat on a hot summer day, you should choose the model with air conditioning; otherwise, get ready to be heated by the sun in every corner of the boat. This boat is sturdy enough to withstand the ocean waves. Prices vary from $14,000 up to $9-10 million.

  • Pontoon boats are suitable for both recreation and fishing. They are stable on the water. You can fish, sunbathe and hide from the sun in the shade. It can reach a high speed, but water sports may require more. Depending on features, prices vary and can be close to $500,000.

  • Yachts offer comfort and sufficient room for passengers. However, due to the size, they are not trailerable.

  • Convertible boats are cruisers with an overnight place and a toilet. Prices start from approximately $100,000 and can be as high as $7-8 million. As a result, families can enjoy weekends and even vacations on the water.

  • Express cruisers are designed for speed lovers and are suitable for large lakes and deep sea fishing. The average cost of such a vessel is $200,000 - $300,000.

  • Cabin cruiser boats give room and comfort for long fishing in deep waters or just relaxing on the water. Depending on the material, prices would range between $30,000 and $6 million.

  • Trawlers are made for professional fishing on a big scale. There is plenty of room for caught fish and the ability to keep it fresh. The new model would cost $20,000-$6 million.

If you know what features are important to you and why it will be easier for you to find the boat you want and get the best deal.

Driving a boat requires skills and is related to the safety of the driver and its passengers. For lenders, it means the safety of their own money, so they often want the boat borrower to have a relatively solid boating experience.

The repayment schedule can be adjusted to the borrower's pay cycle and helps maintain payment discipline.

To choose the best boat loan option, it pays to use a boat loan calculator for informational purposes and check out monthly payments, opportunities for good / poor credit scores, and various financing options from financial institutions. It helps to see the impact of different scenarios on your budget and get the result in a few minutes.

The final decision should be based on the professional advice of the lender's loan administrator and your financial advisor if you use such services.

A boat is a good investment if you enjoy spending time on the water, fishing, boating, water sports, etc. But before buying take care of winter storage, take a moment and consider:

  • maintenance expenses;

  • added expense vs. your budget;

  • condition of desired watercraft: new boat or used one;

  • credit approval chances;

  • needed cash amount;

  • type of interest rate and its impact on the cost of the loan;

  • check what you can afford (purchase price and loan amount, and loan servicing);

  • regular amount of loan payment;

  • total loan amount, etc.

Major types of boat loans

The main difference between different loans is whether the boat is used as collateral or another property is taken as a guarantee of repayment.

Secured boat loans ensure that the loan will be repaid in full, and if something goes wrong and the customer fails to meet the repayment schedule, the lender has the right to mortgage the property and cover its costs from the sale of the equity.

Unsecured loans do not require collateral and are less risky for borrowers. However, if the loan and interest are repaid on time, there is no reason to fear losing the secured property.

Depending on the type of lender, it may be:

  • a bank;

  • a credit union;

  • a dealer;

  • other lenders.

Boat loans also vary based on:

  • required down payment amount;

  • type of interest rate (fixed interest or variable rate);

  • term of the loan (3 months and up to 20 years);

  • loans for new and loans for used watercraft, etc.

Each borrower has to make sure that the deal has reasonable terms, flexible payment options, allows needed loan amount, and competitive rates.

How to apply for a boat loan

An application may be made to various lenders:

  • banks;

  • credit unions;

  • dealers of watercraft and other types of watercraft;

  • other lenders.

Applications can be submitted online, through a mobile app, or in person at the lender's branch for review.

Next, the borrower must provide the required documents (e.g., a watercraft appraisal, income verification, confirmation of residency in Canada, etc.).

Further steps include approval, disbursement of the loan, and payment for the watercraft.

Requirements

To qualify for a boat loan in Canada, the borrower must meet legal requirements and the lender's lending criteria. Typically, this means:

  • age of majority;

  • the ability to enter into legally binding contracts;

  • Canadian citizenship or permanent residency status;

  • stable income and steady employment (the number of years with the same employer depends on the lender's requirements);

  • excellent, good credit (or any credit score if the borrower is applying to alternative online lenders);

  • proven boating experience (exceptions may be small boats without motors, and the lender's guidelines should be read, of course);

  • some lenders require the borrower to open an account with their institution, etc.,

Ways to get a boat loan

Boat purchase can be financed by:

  • a bank;

  • a marine or another watercraft dealer;

  • a credit union;

  • other lenders.

Pros and cons

Pros

  • fast financing of the purchase of your dream boat, instead of waiting until you have sufficient savings;

  • simple application procedure;

  • an extensive offer of boats on the market;

  • multiple loan options, making it easier to decide which lender to contract with

  • possibility of a flexible repayment schedule depending on salary frequency (bi-weekly, weekly, monthly, etc.);

  • ability to repay the loan early without a prepayment penalty (if available under a particular lender's rates);

  • availability of boat loan calculators to check scenarios before applying.

The main advantages of boat loans are their flexibility and the possibility to tailor loans for the borrowers’ needs and financial abilities. Now let us complete the picture and see the disadvantages of taking boat loans.

Cons

  • If the boat is used as collateral, failure to meet the repayment schedule risks losing the boat;

  • regular payments reduce the net income available to you;

  • there are additional fees and insurance that make the loan more expensive;

  • better interest rates and terms are available only to customers with excellent and good credit ratings;

  • taking out such a loan is more complicated compared to a car loan;

  • when purchasing a used loan, the borrower incurs additional fees for title verification, appraisal, etc.;

  • if the borrower opts for a variable interest rate, there is a risk that it will rise higher than expected and drastically increase the cost of the loan.

How to repay a boat loan debt

It depends on the lender, but generally, there are several options:

  • direct debit;

  • cash payment to the lender's teller at the office/branch;

  • check;

  • online banking transfer or via a mobile app, etc.

Legal regulation

Federal laws and provincial legislation regulate boat loans. The local level has the right to impose more strict and resize regulations. The criminal code provides maximal interest rates for loans. The borrowers have to be duly and fully informed about the cost of the loan (payments, the total budget of the transaction rules to access money, etc.), debt collection procedure, and insurance terms. Details on a specific loan group can be obtained from the Financial Consumer Agency of Canada.

The actual cost of a boat loan in Canada

The real cost of a watercraft loan in Canada includes all related fees and interest:

  • dealer fees;

  • interest payment;

  • regular payments amount;

  • insurance;

  • transaction fees, etc.

FAQ

What credit score do you need for a boat?

Banks and credit unions prefer to work with excellent or good credit scores, but since the Canadian loan market is abundant with offers and lenders, even bad (less than 600) or no credit scores can be approved.

What is the average interest rate on a boat loan?

The average interest rate for boat loans in Canada is 26,75%.

How long are most boats financed for?

Most boat loans are financed from 3 months and up to 20 years, the possible duration of the loan. Generally, it depends on the lender.

Is it easier to finance a new or used boat?

A used watercraft is cheaper to finance because it has lost some of its original value due to depreciation, even if it was purchased new by the previous owner only 1-3 years ago. However, additional costs are associated with financing a used watercraft, such as verifying the seller's ownership, appraisal, and recording collateral information in the registry. Most often, significant lenders finance both new and used boats.