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Selecting your boat loan lender. Banks, non-banks, brokers and neobanks

With the decision, “it’s time to buy a boat”, comes the question of which lender to select for your boat loan. With the large number (and growing) of lenders offering consumer finance, the decision of which one to go with can be even more involved than deciding which boat to buy. Buying a boat would be a ‘considered purchase’ for most buyers and every decision to enter into a consumer finance agreement should be considered from all angles. So understanding your options in regard to the choice of lender is important. As Jade Boat Loans is extremely active in the marine finance sector, we’re sharing our industry knowledge to expand your understanding and build your confidence in our services.

The Lender Market

The consumer boat loan lender market is comprised of:-

  • Banks: both the big 4 major banks and many smaller banks offer consumer finance but not necessarily specific boat loans. Where the bank does not have a specially title ‘boat loan’ you can consider their Secured Personal Loan which usually covers this type of purchase.
  • Non-banks: this essentially refers to finance companies that operate primarily in the lending sector as their do not hold a banking status or licence. Many non-banks operate across all areas of consumer finance while others specialise in key sectors. Those that specialise in marine finance would be expected to be more competitive as they would have a deeper involvement in the industry.
  • Dealer and manufacturer finance: it is very common for dealers to offer buyers finance at the point of purchase. This is usually through a finance company.
  • Neobanks or digital banks are relatively new on the financial scene and sometimes referred to as fintechs. They operate on a 100% digital platform and primarily in the transactional side of banking. Very few are active in the lending sector and primarily limited to home loans. As we are accredited with many non-bank lenders, we will be staying across developments in this space. For now, not really a consideration for those seeking a boat loan.
  • Finance Brokers operate like Jade Boat Loans and source finance on behalf of the customers. As is Jade, brokers will have accreditations, which is approved access, to approach certain lenders to negotiate on behalf of customers. The more accreditations a broker has and specifically with lenders that specialise in marine finance, the greater their prospects of securing you a cheap interest rate boat loan.

A key factor is to ensure the lender is a licensed credit provider. That means they must adhere by the Australian laws and regulations in regard to consumer credit. Those laws are there to protect you.

Some lenders are our competitors, our colleagues and our suppliers all at the same time. The differentiation depends on whether we’re handling your loan or you’re handling it direct with the lender. Which brings us to the next consideration – process.

Which way do you go? DIY or Broker

This is probably the key decision for those seeking a boat loan. Do you embark on handling the entire process yourself or do you hand it over to Jade Boat Loans as your finance broker lender?

  • Time: to get sufficient quotes to compare fairly, you will need time if you’re DIY. Some lenders will require you to complete the application process in order to provide you with a quote. That can be timely and every application for credit is recorded in your credit history. Multiple applications can impact negatively. Using a boat finance calculator gives you a rough estimate to use as a guide, but for serious comparison purposes, you will need firm quotes to compare. Jade handles all that for you by assessing a wide swathe of the lending market in one swoop to come up with the cheapest boat loan for you. If you’ve got the time, then by all means proceed to source your own boat loan. If not, engage Jade to save you time.
  • Control: It may be misconstrued that by handling the process yourself you are retaining control of your finances. By engaging a broker you do not lose control. You are making all of the decisions. Your Jade consultant presents you with offers and it is your choice whether you accept or decline. If you specifically do or don’t want a certain lender, we adhere to your brief.
  • Choice: Having more choices to source quotes logically offers more chances to come up with the cheapest and/or best offer. As mentioned above, if you’ve got the time to cover enough lenders to satisfy yourself that you’ve covered enough bases, fine. If not, Jade is accredited with multiple lenders so we include many choices in delivering our service offering.

Considerations

In deciding which lender to choose, everyone will have personal preferences, but here are a few considerations:-

  • Interest rate: this is a major driver of the overall cost of a boat loan and determines your monthly loan repayments. For a cheaper boat loan, look for lenders offering the cheapest interest rates.
  • Cost: All lenders will include some form of fees and charges in boat loans in addition to the interest charged. That is industry standard practice. These fees include things like loan establishment fees, loan management fees and broker fees. The amount of the fees will vary from lender to lender. Most fees such as loan establishment are one-offs, not ongoing. So depending on the term of your loan, may be insignificant if that lender is offering a much cheaper interest rate. But take care of 0% interest rate deals which can simply disguise exorbitant fees to make up for interest foregone.
  • Fees and charges can be compared when advised or you can compare comparison rates across the lenders. The comparison rate will be for a specific example but will include some fees and charges.
  • Expertise: when it comes to assessing loan offers and quotes, Jade brings a wealth of expertise, experience and insight in consumer finance and especially marine loans which most people do not possess.

Sourcing the Cheapest Boat Loan

To assist you in comparing some lenders, we’ve provided a lender comparison chart which shows the different interest rates on boat loans being offered by a range of banks and lenders. We also show Our Lenders so you can see who we work with and who has given us accreditation to work with them to find you the cheapest boat loan.

Selecting a lender is a major step in sourcing a boat loan. Jade Boat Loans certainly ticks a lot of boxes and you can ask us any other questions about our service by giving us a call.

To talk marine finance lenders and all things boat loan, contact Jade Boat Loans on 1300 000 003

DISCLAIMER: PLEASE NOTE THAT THIS INFORMATION IS PROVIDED PURELY AS A GENERAL INFORMATIVE ARTICLE AND IS NOT INTENDED AS A SINGLE SOURCE FOR MAKING FINANCIAL DECISIONS. THOSE THAT CONSIDER THEY REQUIRE ADVICE IN REGARD TO THEIR FINANCIAL SITUATION ARE ADVISED TO REFER TO A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR ERRORS OR MISINTERPRETATIONS IN THE DATA, FIGURES, DETAIL AND OTHER INFORMATION AS SOURCED FROM OTHER SOURCES.

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