How the Boat Loan Calculator Works
Are you dreaming about days on the water, soaking up the rays as you fish with mates or spend some quality family time together? Buying a boat for the first time is a big decision, and also an exciting venture that should be celebrated. Naturally, it can also come with a lot of stress. From researching the best boat for your circumstances to working out the finance options available to you, there is a lot to think about. A boat loan repayment calculator is the perfect tool to help you navigate this.
Put simply, a boat loan calculator shows you how affordable a boat loan can be. You can work out exactly how much you will be paying each week, fortnight or month and determine what you can afford. There are a number of different factors that will affect this estimated repayment, such as loan amount, loan term, interest rates and the frequency of the loan.
How To Use The Boat Loan Calculator
Using a boat loan calculator is simple, and it can give you valuable insight into what you can afford and how much you can expect to be paying each week, fortnight or month, and over the course of the loan. Here is the information you need to get started:
- Loan amount: this is the total loan figure. It will generally be the price of the boat, minus the down payment. You can use the loan calculator to work out how much you can actually afford by changing this amount.
- Loan term: a long-term loan means your repayments will be smaller over a larger period of time. It will take longer to pay the loan off and you will pay more interest, but the repayments will be more affordable.
- Interest rates: the lower the interest rates, the more affordable your loan will be. This figure is added on top of your loan amount.
- Frequency: you can choose from weekly, fortnightly or monthly repayments. While the repayment amount won’t change, one option might be easier for you to manage.
Benefits of Using The Boat Loan Calculator
When it comes to buying a boat, many people mistakenly focus on the overall price, which unsurprisingly can be very daunting to think about. Yet, this isn’t your primary concern when buying a boat. It’s more important to work out the repayments you will be making on your loan, which will change depending on how you choose to structure your loan. This is where a boat loan calculator can be very helpful. By inputting each of the different factors discussed above, you will be able to determine what you can afford to pay back on a regular basis.
Knowing your repayments is the most important number when it comes to taking out a boat loan. This number is determined by those factors mentioned above. The interest rate is the most important factor you need to pay attention to. A higher interest rate will have you paying off more money over the term of the loan, in addition to the purchase price of the boat. The next one to look at is the term of your loan. A longer term loan may sound appealing, as your monthly repayments will be smaller. However, you will be paying interest over a longer period of time, which means you end up paying a lot more by the end of the loan due to the interest accumulated.
A $20,000 boat may sound like a big investment. Yet, taking out a $20,000 boat loan with an interest rate of 5% and a term loan of 5 years, will cost you just $80-90 each week in repayments. When you consider your weekly expenses and how much you have left over, this figure might be much more achievable. With a boat loan calculator, you can adjust the price, interest and loan period to find a repayment that works for you.
Factors To Consider
Now we understand the different factors that affect your repayments, let’s take a look at what you need to consider before taking out a boat loan.
There are 4 questions you need to ask yourself:
- How much is the boat?
- What down payment will I be putting on it?
- What is the interest rate?
- How long will the loan be?
By answering these four questions, you can determine how much your loan is actually going to cost you. While the cost of the boat might be $20,000, you need to factor in the answers to the questions above to work out the overall cost of the loan – two very different figures. Start by deducting the down payment from the cost of the boat. This has already been paid and won’t need to be factored into the loan. Next, you need to look at the interest rate, and how much you will be paying in interest over the course of your loan period. Adding this figure to the amount you want to borrow will give you the overall cost of the loan.
This is what a loan calculator does for you in seconds. Instead of spending all your time working out the maths and calculating a number of different alternatives, a loan calculator will speed up this process. This allows you to explore more options to determine the right solution for your circumstances.
What Are The Next Steps?
Once you have done the hard yards and worked out a repayment option that suits your circumstances, you are ready to take the next steps. While the calculator gives you a great insight into what you can and can’t afford, it’s important to contact a broker who can accurately assess your financial situation and borrowing power before taking out a loan.
Consulting with a financial expert will ensure you gain a thorough assessment of your financial situation, so you enter into a loan agreement with both eyes open. Our expert team of finance brokers can provide you with a deeper evaluation of the boat loan calculator results, focused on your individual circumstances. They will help determine what you are able to afford when it comes to taking out a boat loan, offering their expert advice and tips so you get the most out of your boat loan.
Give us a call today or submit an online enquiry so you can get out on the water even sooner.