Frequently Asked Questions

Should I use my personal line of credit to purchase my new boat?

When comparing a Pride Purchase Plan recreational loan to your line of credit, keep these points in mind:

The payments on the PPP recreational loans are blended so you are making payments towards both principle and interest, whereas the lines of credit are based on interest only payments, therefore, typically taking longer to pay off.

The interest on our PPP loans are calculated daily on a declining balance.

A PPP loan needs no additional security other then the boat. Typically your line of credit is secured against your home or some other major asset.

The rate on PPP recreational loans are FIXED not variable.

When you’re ready to trade up or sell, it is easy to know exactly how much is left owing on the boat. A PPP will help you to pay down to reduce the upgrade cost on your new boat.

What if I just use my personal cash savings to purchase my new boat?

Using cash will avoid additional debt, but also uses funds that otherwise could be used to reduce a mortgage, invest, or pay off other higher interest debts. Financing preserves cash for the unexpected occurrences in life, and the boat loan can always be paid off at any time in the future without notice or penalties. If you have a mortgage, why not use cash to pay that down?

For Example:

  • $150,000 mortgage at 5% with 25 years remaining and payment of approx. $870/month
  • Put $15,000 on mortgage to save over $11,000 in interest. Borrow the $15,000 for your boat at 6.50% over 5 years and the interest costs are just over $2,600!!
  • Essentially you are saving more money in interest by using your cash to pay down your mortgage rather then pay for your new boat.

How much could you increase your personal wealth if you invested the cash reserve? Often times the investment gains will outweigh the financing costs of the boat loan. Now that is a smart way of using your personal cash and reducing the cost of your boating experience!

Purchase Plan Partners

TD Canada Trust Logo SAL Group Logo Diamond Kote Logo RBC Royal Bank Logo Kawartha Credit Union Logo BMO Bank of Montreal Logo

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