Owning your own boat is an aspiration or a dream for a lot of people. Many make that dream come true while for others, boat ownership poses challenges. Some don’t want the responsibility of having to deal with the ongoing maintenance and upkeep that owning a boat entails. For some, they don’t see themselves using the boat enough to justify the cost outlay. For others, their idea of a ‘boat’ may far exceed their budget reality. Champagne tastes and beer budget as the cliché goes.
For all these challenges or maybe excuses that are holding people back from proceeding with full boat ownership, there are possible solutions. Companies and businesses are available which offer shares in a boat or membership to a group which entitles the shareholders or members to a set usage of the boat. Similar to the time-sharing concept which is often used with holiday properties.
But when it comes to seeking a loan to cover the investment, what options are available? As highly experienced lenders across the marine finance sector, Jade Boat Loans presents a number of options for your consideration. Our personalised service, delivered individually to each customer through our consultants, allows Jade customers the benefits of having boat finance personally tailored to their requirements. So whatever boat you are considering and whatever form of purchase, we should have a finance option to suit you and your boat.
Secured Boat Loans
The Secured Boat Loan is by far the most popular type of loan used for the purchase of boats for private use. This type of loan has an easy to understand and quite universal loan format and can suit a large range of boats across a vast price range.
Jade arranges this type of loan at a fixed, and cheap, interest rate over a fixed loan term. The loan term is negotiated by your Jade consultant with the lender to best meet your preferences. These two fixed elements result in a fixed repayment amount. The repayments are made usually monthly, on the set date each month.
Additional payments can be made if desired and if that is done and the loan repaid prior to the end of the fixed loan term, minimal break fees would apply.
Lenders require that the borrower take out insurance over the boat.
The ‘secured’ part of this loan means that the boat is used as security against the money being borrowed. When a loan contract is agreed upon, the lender registers their interest in the boat with the PPSR. So if the borrower defaults on the loan, that means fails to make the repayments as scheduled, the lender holds the entitlement to repossess the boat and sell it to recoup monies owed.
This is where the problem comes in when seeking a loan to purchase a share in a boat or membership in a boat-share group. A single shareholder would not have the right to offer the entire boat as security against their loan. Conversely, a lender is not in a position to hold security and repossess a portion of a boat.
So for buyers of a share in a boat, a Secured Boat Loan is not looking like a workable option unless a unique agreement is reached among the shareholders.
A workable loan option that boat shareholders can consider is an Unsecured Personal Loan. This type of loan is offered by Jade Boat Loans as an option for boat buyers where the boat is not available or suitable to use as security against the loan.
This can occur with older boats as the age, condition and resale value of an asset are considered by lenders in approving boat loans.
With an unsecured loan, technically no security needs to be provided.
So is this a cost-effective option?
An Unsecured Personal Loan is a loan extended for any number of purposes where security is not available. As with a Secured Boat Loan, an Unsecured Personal Loan has a standard loan format:-
- Jade arranges unsecured loans at our cheap interest rates with terms and conditions negotiated to suit the individual applicant.
- The interest rate can be fixed or variable, depending on the lender.
- The interest rate will be higher than for a secured loan due to the absence of security.
- The loan term is for a fixed term with fixed monthly repayments.
- Borrowers can make extra payments if they like and if the loan is paid out early, minimal break fees apply to fixed interest rate loans and no break fees for variable interest rate loans.
- As there is no security, lenders may require additional conditions such as a good credit profile.
You can use our boat loan calculator with our current advertised rate for unsecured loans to work out the repayment estimates on a loan for the amount you are seeking.
With the lender not having security over the boat, this may be an ideal loan option for those considering buying a share in a boat.
Sharing a boat does present benefits in sharing the costs involved and possibly the responsibilities in caring for the various tasks needed to maintain a boat. For those that are not planning to use their boat as much as others, it can certainly be a viable boat ownership option.
Boat Meets Budget Option
And the final option is to find a boat that does meet your budget. Our boat loan calculators are the perfect tool to assist with that process. Simply enter the amount of the boats you’re considering until you find one with the repayment level that meets your expectations.
Using the services of a marine broker can be extremely helpful to source hard to find boats.
Whatever your boat-owning dream, Jade Boat Loans is available to discuss finance to make them a reality.
To discuss your boat share loan options, contact Jade Boat Loans on 1300 000 003
DISCLAIMER: THE INFORMATION IN THIS ARTICLE IS PREPARED SOLELY FOR INFORMATION PURPOSES AND IS NOT INTENDED AS FINANCIAL ADVICE OR AS THE SOLE BASIS FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING ADVICE SHOULD CONSULT A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATIONS OF PRODUCTS, POLICIES AND INFORMATION OR ERRORS IN THE CONTENT AS REFERRED FROM OTHER SOURCES.