Refinancing a Boat Loan

Refinancing an existing boat loan is remarkably easy. It makes as much sense as refinancing your home does when lower rates are available. Refinancing will result in lower monthly payments and a savings potential of thousands of dollars in interest charges over the remaining life of your loan. On the other hand, there are many differences as well. When compared to refinancing a home mortgage, the boat loan refinance process is very quick, can be completed with no closing costs and requires less paperwork.

The process to refinance your boat loan can be completed in as little as three to five business days from start to finish. Updating a loan application and submitting recent income information with the original loan originator is the key to a quick and painless process. The original loan originator will take the updated application and income information and combine it with the information on file and get an approval within hours. Once the loan is approved, a payoff request will be made and paperwork can begin the very same day. Once the required loan paperwork is signed, the loan originator will handle paying off the existing loan and process the required lien perfection documents. It is that simple.

Deciding when to refinance is probably the most difficult aspect of the entire process. In a declining rate environment, it is simple to identify the rate of interest on your current loan versus what is being offered in the market. Attending a local boat show will quickly identify what the current interest rate environment is and there are plenty of loan originators ready and willing to provide a savings analysis. The little know fact about refinancing is that often times in a flat or even rising rate environment refinancing opportunities exist. During these interest rate cycles if a boat loan is obtained through a dealership, chances are the dealer marked up the interest rate to make a profit. Loan originators typically do not mark up boat loan interest rates. Depending on the outstanding loan balance, an interest rate differential of only .25% can add up to thousands of dollars worth of savings over the life of the loan. Of course, closing fees should be considered in the total saving analysis and many lenders will not charge these fees to refinance an existing boat loan.