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Home Finance Yacht financing; the advantages of purchasing a yacht with credit

Yacht financing; the advantages of purchasing a yacht with credit

by Staff GBAF Publications Ltd

Yacht financing; the advantages of purchasing a yacht with credit

Owning a luxury yacht is a dream many aspire to and is the ultimate lifestyle purchase. However, it is also a significant investment that requires a large amount of capital. Thankfully, there are many financing options for buying a new boat owner. 

Financing a superyacht for sale with YACHTZOO means you do not need to pay a considerable upfront cost; instead, you make a monthly payment. This provides an enhanced cash flow, which you can use to operate the yacht, invest in other assets, or financial ventures. Companies such as Million Plus provide dedicated private offices for financing requests, designed  specifically for big ticket items such as a superyacht. 

If you’re browsing a yacht for sale, but don’t want to fully finance the vessel with your own capital, take a look below to explore the advantages of yacht financing. 

How do I finance a yacht?

Yacht financing is much like a “normal” loan. Your lender will release a pre-agreed sum to you that you will use to buy the vessel. You will be required to pay back the loan and interest over several years. 

Your down payment will primarily depend on how much you’re paying for your yacht, as well as what type of boat it is and how old it is. In general, the average down payment for boat financing is between 10 and 20 per cent.

Depending on the size of the loan, you may need more or less documentation and evidence. That said, if you are looking to finance a yacht, it is essential that you have a good credit score, proof of sufficient funds, information about your vessel, your business plan if you are buying it for commercial purposes, an independent marine survey report for valuation purposes,  and proof of insurance. 

What are the benefits of yacht financing?

Lower Upfront Costs

One of the main advantages of financing a yacht is that it allows you to spread the cost of the vessel over an extended period of time, making the cost of the yacht much more approachable. This means owners can enjoy the benefits of yacht ownership immediately without paying for the entire purchase upfront.

Lower upfront costs also make it much easier to afford the upkeep costs of your new luxury yacht. Boat owners are required to pay for routine maintenance, berthing costs, and any required licences and permits. These additional costs can stack up with a high monthly payment, but a lower up-front payment makes it much more feasible.

Longer Loan Terms 

Typically, when you get a loan for a car – the terms tend to be five years or less. However, marine financing companies know that when you buy a boat, it is a long-term investment. For this reason, they will often offer 15  or 20-year loan terms. Longer loan terms often result in lower interest rates, making the payments more manageable. 

Faster Credit Approval 

Buying a yacht with credit is a stress-free process, with traditional credit checks taking less than a week. Boat financing companies understand you want this process to move fast, and they can help you make that happen. When you apply for credit approval through a yacht financing company, you can expect a response within 24 to 48 hours. 

Fixed Interest Rates

Another advantage of taking out a loan to purchase a yacht is that you can benefit from fixed interest rates. This means that your interest rate will remain the same throughout the life of the loan, providing you with predictable monthly payments. This can be especially helpful for budgeting and financial planning.

Flexible Repayment Options

Most banks offer a range of repayment options for yacht loans, including fixed and variable rates and balloon payments. This allows you to choose the best repayment plan for your financial situation. Additionally, many banks offer the option to make additional payments or pay off the boat loan early without penalty, which can help you save money in interest charges.

Tax Benefits

In some cases, taking out a boat loan to purchase a luxury yacht can provide tax benefits. For example, if the boat is used for business purposes, you may be able to deduct some or all of the interest paid on the loan from your taxes. Additionally, if you plan to rent out the yacht when you’re not using it, you can deduct certain expenses related to the rental.

Build Credit

Financing a boat can also help you build your credit score. As long as you make your payments on time, your credit score will improve. This can be especially helpful if you plan to take out additional loans in the future.

If you require more help financing your luxury yacht and starting the process of becoming a new boat owner, please get in touch with a reputable yacht brokerage today.