Originally Posted by backcreeksailor
With excellent credit and if I was looking at an under 30k loan with 6k down, wouldn't that give me a drastically lower interest rate than 12% and a subsequently higher purchase price? (I'm seeing 5.99 teaser rates being advertised on the front page of many boat financing websites).
The part I readily admit that I don't understand is how to predict the loan term lengths lending institutions will allow...
The typical car loan is simple, 5 yrs for new, 4 yrs for used. But in boat financing it can stretch up to 30 years on the far end of the spectrum. I know 30 yrs wouldn't apply to a 30k loan, but how far can you stretch it out?
Is there a chart online anywhere that breaks down the price points and boat ages at which you can get a 5, 7, 10, 15, etc year loan?
No chart that I'm aware of, but these are simple excel formulas. If you have excel, learn to use PV & PMT functions
=PV(rate, periods, payment, future value)
explain the terms
PV = present value...this is where you calculate the value of the loan you can afford.
Rate = your interest rate. Remember, its your annual rate divided by the # of payments per year. So, if you have a 8% ANNUAL percentage rate, your monthly or periodic rate is 8% / 12...or .08/1 or, .0067.
Periods = # of payments you'll make over the term of the entire loan. If you have a 10 year loan, then its 10 x 12 (monthly payments) = 120 periods
Future Value = usually zero, you have to pay off the loan!
You can play with this and the PMT function which is just a variant, with a few different inputs (rate, periods, future value, present value)