Can I Get a Bad Credit Boat Loan?

An unenviable financial situation is a harsh reality for many. Due to mistakes and wrong financial moves in the past, you might have a lack of cash and bad credit right now. And that lowers your chances of finally buying a bike or a small fishing boat you’ve always dreamed of.

In a situation like this, you might think borrowing money would be a bad idea. You’re convinced that a below-average credit score limits you from obtaining favourable loans and that your chances of approval are almost nil. Luckily, some lenders still believe you deserve a second chance.

Boat financing with bad credit is an option if your credit score is 500 or lower. Of course, the loan terms will be less favourable than if lenders consider you a reliable borrower (with credit scores above 735). But that’s a price you must pay if you want to buy a boat this way.

What this article covers:

How Can I Get a Bad Credit Boat Loan?

bad credit boat loan

Banks and traditional lenders are happy to approve loans to borrowers with stellar credit scores. Yet, they’ll be reluctant towards those with credit ratings below average. If you’re among them, look for your chance with lenders willing to give personal loans to those with current financial struggles.

Many direct lenders and platforms cooperating with them are at your disposal. You can search for direct lenders on your own, but the better solution is to go with intermediaries (lending websites). 

That way, you’ll get access to bad credit boat loans that match your financial abilities and needs. These arrangements are usually secured by the craft you buy, but you can also run onto lenders offering unsecured personal loans.

Based on basic information about your finances, intermediaries will provide quotes from different lenders. They’ll check your credit score, but this check won’t hurt it as multiple applications with direct lenders would.

Who Can Apply for Bad Credit Boat Financing 

Lenders won’t take your poor credit as a deciding factor. Instead, they’ll consider your overall financial situation, including income and current payments. That’s how they can find you capable of handling a new debt despite a below-average credit rating.

Some of them will even give you no credit boat loans if you’re a borrower without a credit history (that’s how you can also get a minor payday loan or a small student loan). And there’s a chance for loan applicants with major credit problems in the past, such as:

  • History of missed or late payments on past credit lines
  • Release from a Part Nine Debt Agreement
  • Discharge from recent bankruptcy

Eligibility Requirements

loans for boats with bad credit

Different lenders may have various requirements regarding qualifications for bad credit loans. Whether you need money to repair your car, pay for your travel plans, or a loan for a boat purchase, you must meet these criteria:

  1. Age: You must be over 18
  2. Residence: You must be an Australian citizen (or temporary resident)
  3. Income: You must have a regular cash inflow to your bank account

Your eligibility must be supported by the appropriate documentation you’ll submit along with the bad credit boat loan application. For starters, you need a photo ID to prove your identity, usually a driver’s licence. 

A driver’s licence can also be proof of Australian citizenship. If you don’t have it, lenders might ask you to submit a citizenship certificate, birth certificate, or any other evidence of your visa or residency status.

The following request refers to documentation that proves your income. For employees, these are payslips (the last one or two, depending on the lender). If you’re self-employed, you’ll need the former tax return document to apply for larger loans.

In any case, lenders will ask for a bank report for the last three months. It’s another proof of your income and past financial behaviour, based on which they’ll determine whether you’re eligible for financing a boat with bad credit.

Bad Credit Boat Loan Application Procedure

Applying for boat financing for bad credit borrowers is straightforward as it takes a few simple steps. But you have to assess each of them with utmost attention to avoid mistakes and speed up the approval. 

Find the Right Lender

You shouldn’t have a hard time looking for a lending platform in Australia, as many operate on the internet, so you can check their reputability in just a few clicks. Take your time to research their products, customer service, responsiveness, etc. Reading reviews from previous clients can help you with that. 

Reputable lending services work closely with a network of partners to help you find the bad credit boat loan tailored to your needs and abilities. It’s a simple procedure, but no lender should promise guaranteed approval. Still, your chances are good if your income is high and you have no recent financial problems. 

boat loans for bad credit

Fill Out the Form

It starts with providing personal and financial information. If you prepare the documentation on time, the bad credit boat loan application will go smoothly. Then, you’ll be asked to specify the amount you need and what for (for instance, you need $5,000 for a small pontoon boat). 

Make sure that the loan amount you ask for is in line with your finances. Also, how you’ll spend the money is important for the approval decision, as the craft’s age and condition determine its resale value. 

Lenders need this info since bad credit boat loans are usually secured ones. The boat you buy will be collateral until you pay off the loan entirely. In rare cases, you can get instant approval even for unsecured loans, but your interest might be high or you’ll be asked to put in a deposit.

Compare Bad Credit Boat Loan Offers

After filling out the online form, you can expect a call or email from the brokers. They might ask you a few questions or ask for additional information. That’ll help them get you the best loan offer for financing a boat with bad credit.

The brokers will do this research and provide several loan offers, which means a lot if you need money urgently. Now, take your time to compare these deals. The most important factor is the overall loan cost, which will depend on fees and interest rates. They can be higher than regular personal loans and depend on how risky the lenders find you.

Each loan application is individual and depends on the lender’s assessment. Thus, some applicants can give you a $15,000 loan with an interest rate of 10% despite a below-average credit score, but you must provide a deposit. On the other hand, another applicant can get a bad credit boat loan without a deposit but with an APR of 20%.

Depending on the loan amount and your risk assessment, the repayment period can be from two to seven years. Also, you can opt to make your payments monthly, fortnightly, or even weekly.

You should consider additional fees when deciding on boat financing for bad credit. Check if it’s possible to make extra repayment or even pay off your loan earlier. These can be free of charge, but some lenders might charge you fees for an earlier exit.

bad credit boat loans

Get an Approval

After deciding on the bad credit boat loan that suits you best, you receive the final offer from the lender. Read the contract carefully and agree on the repayment terms. If everything goes well, you can have money in your account within two hours.

How to Boost Your Chance of Getting a Favorable Boat Credit Loan

Before applying for boat loans for people with bad credit, you can do several things to boost your approval chances. For starters, you should check your credit report. You might notice some mistakes (for example, there’s no entry on settling a recent small loan). Fixing these can even improve your credit score.

You can also try to ditch some debt. You can close old lines of credit to get more borrowing power. For instance, you can close credit cards you don’t use or repay a $1000 loan as soon as possible.

Or if you have several monthly payments on minor personal loans, you can consider getting a debt consolidation loan. It can help you get your finances in order before applying for bad credit boat finance.

Finally, be careful with multiple loan applications at the same time. For example, if you plan on getting a boat loan with bad credit, you shouldn’t apply for a payday loan. In this way, you’ll avoid hard inquiries on your credit score, which can reduce your chances of loan approval. 

Frequently Asked Questions

What Crafts Can I Buy with a Bad Credit Boat Loan?

Lenders don’t limit you on the craft type you’ll buy if you get a bad credit loan. It can be anything from luxury yachts and houseboats, jet skis and power boats, to small fishing crafts and dinghies. In this way, you can finance the purchase of both new and used boats.

Can I Use Bad Credit Boat Finance for Business Purposes?

Lenders approve boat financing with bad credit for both private and commercial purposes. It means you can use this money to either buy a rowboat and go fishing on the weekends or renew the fleet of jet skis you rent. In the latter case, your loan cost might even be tax-deductible.

boat loan for bad credit

How Long Does It Take for Bad Credit Loan Approval After Applying?

In most cases, no longer than 48 hours. Filling out the online form won’t take you more than a couple of minutes. If you’ve done that correctly, in most cases, you can expect the answer on the same day. In case you’re approved for a bad credit boat loan, you get an almost instant response, and cash in your bank account will be available in the next couple of hours.

Can I Get Boat Loan With Bad Credit If I’m on Centrelink?

Lenders view Centrelink benefits as regular income, so borrowers receiving these can apply for a personal loan to finance a boat purchase. The amount will depend on the benefits you receive and how much you can set aside for loan repayment. In general, these loans will be lower than those for employed and self-employed borrowers.

Wrap Up

It’s easy to get on the water with your new rowboat when you’re a loan applicant with a good credit score. But don’t lose hope even if your rating isn’t stellar. You can run onto favourable boat loans for bad credit and lenders that’ll guide you through the process and won’t rip you off.

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