In simple terms a balloon payment is an agreed sum which you pay the boat loan company as part of your final payment. Your loan will be made up of regular periodic payments and you will know what they are before you start your first payment. And you will also know that if you are granted the right to have a balloon payment exactly how much that final figure will be.
There are different benefits for the person who takes out a balloon payment. It’s possible that you will be able to make better use of a taxation claim and certainly you will be able to lower the periodic payments. But you need to examine the situation in detail before you make a commitment. Jade Boat Loans definitely offer you the option of adding a balloon payment to your loan application.
You need to take into consideration the purchase price of your boats. Buying a used boat loan or a cheap new boat may disqualify you from certain things. It’s always better to seek professional help before making a final decision.
Are there risks with a balloon payment?
You like the idea of a balloon payment because it means your regular payments are lower than they would be without a balloon payment. So far so good. But let’s look forward to the end of your loan. You’ve been making regular payments and all is going well but now you have to come up with this extra amount of cash — the balloon payment. What happens if you haven’t got the cash to make the balloon payment?
You do have a number of options. You can take the option of used boat refinance the loan and re-set the payments with a different balloon payment. Of course you would need to get approval from the lender for that action. Alternatively you could sell your boat privately and from the proceeds pay out the balloon payment and cancel your loan. That makes you all clear as far as the finances are concerned but you no longer have your boat.
With a balloon payment it is super important that you have a good financial record throughout the term of the loan. If you get into trouble making your regular repayments, chances are you will be in even more trouble when it comes to making the balloon payment.
Every boat owner who takes out a boat loan needs to pay particular attention to the terms of the contract. Always do the right thing and when you do, it makes life so much easier allowing you to make your balloon payment on time and have complete ownership of your boats.
Want to workout repayments with different balloon payment – Boat Finance Calculator Online