The following boat-financing tip, provided by marine-financing company Sterling Associates (a BoatingLocal sponsor), points out some advantages to financing your boat through a marine lender over paying for it in cash.
Financing a boat through a marine lender allows you to invest your money elsewhere, and, in some cases, enjoy returns that exceed the cost of the boat-loan interest payments.
For example, if you secured a rate of 4.62% fixed for 20 years on a boat loan of $100,000, that would require a monthly principal and interest payment of $639.15. The interest cost of this loan over an anticipated life of 60 months is $21,231.77.
If you are in the 30% tax bracket, the interest expense deduction will save you $6,369.53, effectively reducing the cost of the loan to $14,862.24.
That same $100,000, if invested earning 4%, would grow to $116,757.19 (after tax) during the same time period.
(Note: The above example is used to help explain the advantages of marine financing, and is not a guarantee of what is available in the market at any particular time. Consult with a financial advisor about your own personal tax situation.)
For more information on current rates or to inquire about a loan check with Sterling Associates by CLICKING HERE.
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