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Tales From The Tides: No Money, No Problem!

by Remie Van Der Hulst

A good quality boat is likely to give you an unforgettable experience with the tides. In addition to this, such a boat is likely to give you bragging rights in the face of fellow boat owners/boating enthusiasts.

Because good quality boats don't come cheap, a large number of boating enthusiasts are forced to acquire their marine recreational vessels on credit. This article provides answers to three questions that prospective boat owners often have when looking to apply for a boat loan.

Who Offers Boat Loans?

There are various potential sources of finance for a new pontoon. These sources include mainstream banking institutions, financial service companies, credit unions, and boat dealers.

Mainstream banking institutions and financial service companies will often have more stringent requirements for boating enthusiasts who would wish to get a loan. For example, the two boat financiers will seldom provide a loan if the applicant has a questionable credit history.

Credit unions may have slightly less stringent requirements, but eligibility for boat loans with a credit union is often limited to members of the union. Boat dealers are often the most flexible of the mentioned boat financiers. Many times, dealers will provide funds for boating enthusiasts with a less-than-perfect credit history. Many times, these dealers also finance the acquisition of additional equipment (e.g. fishing gear, fire extinguishers and GPRS tracking equipment).

Because dealers have long-standing relationships with boat manufacturers, they may also be in a position to offer extended warranty programs for specific boat models as part of the loan package.

What Are The Available Types Of Boat Loans?

  • Fixed rate boat loans: Under this type of loan, you will be expected to re-pay a fixed amount at the end of every month for a fixed duration of time, after which the loan will have been fully repaid.
  • Variable rate boat loans: Under this type of loan, the interest rate charged on the loan is adjusted after an agreed duration of time or in accordance with the prevailing market trends. Many times, variable interest boat loans will have a lower initial rate of interest and this makes them seem attractive in the eyes of prospective boat owners.
  • Balloon payment boat loans: Under this type of loan, you're allowed to make a lump-sum payment upon the expiry of the loan duration.

Can GST Be Avoided During Boat Acquisition?

Yes. One may be exempted from paying the Goods and Service Tax (GST) during a boat acquisition. However, the Australian Taxation Office gives this exemption on the condition that the boat to be bought is new and that it will be exported out of the country after a period of 12 months.  

For more information on equipment finance, talk to a professional like SMA Finance.