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Old 31-08-2021, 10:48   #1
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Bank to finance - older boat

Hi all...wondering if anyone has a recommendation for a financial institution who will finance a boat loan for boats older than 20 years?

I'm having a hard time finding one that doesn't want an insane interest rate/super short term/etc.

Specs:
60-80k loan
can put $ down
excellent credit
longer term the better (10+ years)

Thanks in advance
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Old 31-08-2021, 10:58   #2
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Re: Bank to finance - older boat

What is the price of the boat you're considering? Instead of a traditional boat loan with an insane rate, how about a home equity line of credit? Essentially you back the boat loan with your property.
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Old 31-08-2021, 11:00   #3
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Re: Bank to finance - older boat

60-80K

No house to take out a LOC.
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Old 31-08-2021, 11:05   #4
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Re: Bank to finance - older boat

Ok, so the banks are going to freak unless you can make a sizeable down payment, what's affordable?
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Old 31-08-2021, 11:05   #5
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Re: Bank to finance - older boat

I could pay cash but don't want to.
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Old 31-08-2021, 11:08   #6
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Re: Bank to finance - older boat

Quote:
Originally Posted by Legend1673 View Post
I could pay cash [for an older boat] but don't want to.

Neither do most banks. An old boat isn't good security for a loan.
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Old 31-08-2021, 11:13   #7
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Re: Bank to finance - older boat

I understand that MOST banks won't be interested. That's why I'm posting a thread to see if anyone has suggestions on places that will.
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Old 31-08-2021, 11:13   #8
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Re: Bank to finance - older boat

Quote:
Originally Posted by Legend1673 View Post
I could pay cash but don't want to.

Seconded - you always need cash on hand for repairs, rum, etc
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Old 31-08-2021, 11:24   #9
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Re: Bank to finance - older boat

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Originally Posted by Legend1673 View Post
I understand that MOST banks won't be interested. That's why I'm posting a thread to see if anyone has suggestions on places that will.
I can sympathize with your frustration. The short answer.....NO. You have limited tangible equity and your asking to borrow on an old, depreciating asset.

Do you have a borrowing history that shows repayment of large loans, such as real estate?

The interest rates are going to be high, the percentage of equity (down payment) will be high, and the terms will be short. This is particularly the case the older the boat gets.
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Old 31-08-2021, 11:27   #10
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Re: Bank to finance - older boat

I have excellent credit >830 and paying off loans (2 cars, mortgage, previous boat, etc.). I also have tangible equity in the form of cash.

So I'm really looking to see if there is anyone who has found a financer for an older boat.
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Old 31-08-2021, 11:33   #11
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Re: Bank to finance - older boat

Depends on what you consider a bad interest rate. We borrowed $40k for our 20-year-old boat on an unsecured loan online from SoFi at 7%. I believe it was a 5 year note, and we could have had up to $100k. We planned to pay it off over 2 years but paid it in 18 months.

I didn't look into it for this transaction but would have also considered peer-to-peer operations like Prosper. Didn't bother looking for anything secured, because I figured it wasn't going to happen.
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Old 31-08-2021, 11:34   #12
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Re: Bank to finance - older boat

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I also have tangible equity in the form of cash.
If you mean cash other than what you'd pay for the boat, you can convert the cash to a financial instrument (e.g. a CD) of the bank's choice and then the bank uses the CD as collateral for your loan. Unfortunately banks don't regard cash as equity because it's too liquid.
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Old 31-08-2021, 11:51   #13
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Re: Bank to finance - older boat

Good ideas above. What about only financing part of it? The bank may be willing to accept less risk that way.
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Old 31-08-2021, 13:31   #14
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Re: Bank to finance - older boat

I did not finance my 36 y/o boat, but when I was looking Navy Federal CU was suggested as an option for a loan on older boats. Unsecured as suggested above may be the easiest.
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Old 31-08-2021, 13:33   #15
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Re: Bank to finance - older boat

Taking out a loan to buy an old boat defies all managerial common sense.

Loans are justifiable, and indeed the soundest financial policy, if their proceeds are used to buy tangible assets whose market value will APPRECIATE faster than the aggregate of the loan's interest rate and anticipated rate of inflation, OR if the proceeds are used to fund activities that generate a NET POSITIVE CASH CONTRIBUTION to the borrowers economic activities.

Boats are NEVER productive of NET positive cash contributions. Quite the contrary!
Any contribution to the owner's general economic activities made by a boat will ALWAYS be NEGATIVE. Boats are always DEPRECIATING assets.

Bank lending officers learn that in Finance 101. That is why they will not make loans for the purpose of buying old boats.

Furthermore, when a bank lending officer advances cash, ostensibly for the purpose of buying an old boat, secured by the buyer's equity in real estate, whether the security be called a "mortgage" or a Line of Credit, the officer does so in anticipation of being able to turn a profit for the bank by seizing and selling the borrower's real estate when the borrower goes up the financial flue. The real purpose of such loans, as opposed to the ostensible one, is to make the bank richer and the borrower poorer.

No man should ever spend more money on a boat - whether buying it or maintaining it - than he can walk away from with a smile still on his face.

All the best

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