4 Tips For Getting Your Boat Loan Approved
Boat finance applicants often have concerns about whether they can get approved for a loan, and understanding lender requirements and the approval process can be confusing, especially the first time around. Each financier has its own lending criteria, but applicants will generally need to be at least 18 years of age and an New Zealand resident. Assuming you meet that basic criteria, following the four tips below will give you the best chance of approval. It also pays to do your homework on the boat itself before applying: running a PPSR check to confirm there is no finance owing and understanding what ongoing maintenance will cost helps you borrow a realistic amount from the outset.
Getting a boat loan approved comes down to staying in stable employment, keeping your bank statements clean, considering a finance broker to compare lenders, and being realistic about how much you can actually afford to borrow.
Of course, you should be aware of basic lending criteria before applying. You will need to be at least 18 years of age. And you will need to be an New Zealand resident when applying for finance in New Zealand.
Assuming you meet the basic, essential criteria, following the tips in this article will give you the best chance of an approval on your loan!
1. Stay In The Same Job
If you’re planning to apply for boat finance soon, try not to switch jobs. Lenders tend to prefer stable applicants who have been in their job for at least six months. An applicant who has only just changed jobs will be viewed as higher risk, which could affect their chances of being approved. If you can demonstrate a history of stable employment in your finance application, the lender will be more comfortable approving you for the loan.
You should also be aware that even if you have received pre-approval on your boat loan, it’s still recommended that you don’t switch jobs yet. A pre-approval is conditional, and the lender may withdraw it if your financial circumstances, including employment, change before you purchase the boat.
2. Take Care Of Your Financials
When you submit a boat loan application, you may be asked to provide up to 90 days of bank statements. If the lender sees any dishonours, missed payments or late payment fees, this will compromise your chance of being approved for the loan. A lot of gambling expenses on your bank statements is also looked at unfavourably by lenders.
Try to keep your bank statements clean leading up to your application, maintain a healthy balance in the bank, and try to put some extra money away. This will show the lender that you’re responsible with your money and able to make repayments.
3. Use A Finance Broker
If you apply for finance directly through a bank or another lender, you will only have access to a very limited number of loan products, and it’s hard to know if you’re getting the best deal on the market or if you even meet their lending criteria.
The alternative is to apply through a finance broker. They will be able to compare your options from their extensive panel of lenders to find you the best deal available, and will also make sure that you meet the lender’s criteria, so you can be confident your loan will be approved. A good broker can also save you a lot of time finding the best deal and assisting with the submission of your application. Keep in mind that not all brokers are the same, so choose one with a strong reputation and check their reviews to make sure other clients were happy with the service.
4. Consider How Much You Can Really Afford
It’s important to consider how much you can afford to borrow. Add up your current expenses and look at what you have left over after those expenses. You may be able to cut back on some of those expenses, but it’s important to be realistic. Also consider any other upcoming events that may impact your financial circumstances.
If you apply through a broker, they will be able to guide you through this and give you an accurate repayment figure, which means your application will be more likely to meet the lending criteria. And once the loan is approved and you’re ready to buy, make sure you have the right insurance in place from day one. Our guide on insuring your boat: top tips for boat insurance covers what to look for in a policy.
Frequently Asked Questions
Will changing jobs affect my boat loan approval?
Yes, it can. Lenders tend to prefer applicants who have been in stable employment for at least six months, and a recent job change can be viewed as higher risk, even if you already have conditional pre-approval.
What do lenders look for on my bank statements?
Lenders typically review up to 90 days of bank statements and look unfavourably on dishonours, missed payments, late payment fees and excessive gambling transactions. Keeping a healthy, clean balance shows you are responsible with money.
Should I use a finance broker for a boat loan?
Using a finance broker can give you access to a wider panel of lenders than applying directly with one bank, helping you compare deals and ensure you meet each lender’s criteria before applying. Choose a broker with a strong reputation and positive reviews.
What is the minimum age and residency requirement for boat finance in New Zealand?
Most lenders require applicants to be at least 18 years of age and an New Zealand resident, though specific lending criteria can vary between financiers.
