Home
Back
Loan Payment Formula:
| From: | To: |
Watercraft loan refinancing involves replacing your current boat or watercraft loan with a new loan that has better terms, typically a lower interest rate or different repayment period. This can help reduce monthly payments or total interest paid.
The calculator uses the standard loan payment formula:
Where:
Explanation: The formula calculates the fixed monthly payment required to fully amortize the loan over its term, accounting for compound interest.
Details: Refinancing can save money by lowering interest rates, reduce monthly payments by extending terms, or help build equity faster with shorter terms. It's particularly valuable when market rates drop significantly below your current rate.
Tips: Enter your current loan balance in dollars, the new monthly interest rate as a decimal (e.g., 0.005 for 0.5%), and the new loan term in months. All values must be positive numbers.
Q1: How do I convert APR to monthly rate?
A: Divide the annual percentage rate (APR) by 12 (months) and convert from percentage to decimal (e.g., 6% APR = 0.06/12 = 0.005 monthly rate).
Q2: What's a good refinance rate for watercraft loans?
A: Rates vary by credit score and market conditions, but generally anything below your current rate by 1% or more may be worth considering.
Q3: Are there fees to refinance a boat loan?
A: Yes, typically including origination fees (1-2% of loan amount), appraisal fees, and possibly prepayment penalties on your current loan.
Q4: How does term length affect total interest?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total interest.
Q5: When is refinancing not advisable?
A: When fees outweigh savings, if you plan to sell soon, or if extending the term would keep you underwater on the loan.