There are a few marketing angles some companies use when advertising yacht or boat loans, rv or aircraft financing . One of them is “where lenders compete”. Some of the sites that use it include www.yachtworld.com and www.boats.com. Let me tell you the truth about the statement of lenders competing in our industry. It’s probably not true or isn’t anything they lead you to believe.
First, for lenders to truly be competing, they need to be separately reviewing and receiving your application. Here is an example of where lenders don’t compete and how Eboatloans works. We receive your application, pull your credit and discuss with you the different lending options available based upon your desires. Interest rates on boat loans vary by many things including your credit, history, income, boat, state of residence, …. You chose what is the best option and we only send to the lender we believe will give you the best rate and plan for you. Lenders are not truly competing for your business! We are giving you the best opportunity available. You may even choose a higher interest rate to get a lower down payment. Your credit score may not qualify for the best lenders. We know what the lender wants and it would be a waste of time to the bank, you and us to send it everywhere and has negative consequences. Everyone has different needs.
So why aren’t we letting lenders compete for your boat loan business? There are several very good reasons. First, the more credit pulls you have during one period, the lower it takes your score. I’ve seen it where scores don’t drop at all and I have seen a score drop 20 points from the additional credit pull. A drop of 20 points could easily cause a higher interest rate because you have moved into a lower tier (higher risk) for the bank.
I’m not trying to scare you out of shopping around for the best rate. I just want you to do it the right way. Personally, I would say call and request a rate quote and then follow the person that gives you the most information and the best rate. We all have pretty much the same rates so to me it is a matter of personality. However, if they give you an answer without asking you a few questions, it may not be an accurate interest rate for your boat loan (the bait and switch). We really need to know your score, your debt to income ratio, the loan amount, the boat and your state of residence to give you at least a “reasonable rate quote”. Take a look at my other posts for other details.
Another reason not to “shot gun” your loan application for a boat loan is it brings up more questions from the lender when there are several or many credit pulls. This is a small industry and we are only dealing with a few banks here. When lenders see more than one marine lender, they typically ask themselves the question: Did the other bank turn it down or decline it? Why? This also may decrease your chances of getting a loan.
The only way to tell if lenders are truly competing for your business is by the credit pulls listed on your credit report. If there is only one or two, those are the only lenders that looked at your credit. Another trick about this terminology is where the application is actually sent. Some providers may only have two banks and are limited to those rates. If those banks are out of market (higher interest rates than other banks), banks may be competing but are providing rates that are higher than you may find elsewhere.
So the next time you go to buy your favorite boat whether it be a Sea Ray, Grady White, Carver, Hunter, Bertram … or whether it is online or at the dealership, be very protective about your credit. Ask, how many people are you going to send my application to? Get rates and terms before you give them your credit information. Again, go with someone you like and has provided you the best info and interest rates.
For more information about boat loans, please feel free to give us a call toll free at 877-435-3633 or visit us online at www.eboatloans.com. Hope this provides some useful info! Thanks and happy boating.
Hey, at least I got a response.