Good question! If you have the money, it may be in an investment such as the money market, GIC’s, real estate, etc. Today, that investment may or may not be making a big return, but either way is this the best time to cash it in?
Having your money work for you is the easiest way of earning money. As you know your investment can earn a lower rate than the borrowing rate for your boat and you can still be ahead in the interest game. We would be happy to take a look at the numbers with you.
The banks have an ideal type of loan for making major purchases. It’s not your Line of Credit either! This special type of loan is called a Conditional Sales Contract (CSC), and is only available through your qualified dealer, not even at the branches!
A good loan is more than just the rate. It is all the terms and conditions. A CSC is wide open, so no penalty for early payout. It won’t tie up any of your collateral other than your purchase. Extended amortizations are available. This keeps your payment down, which could be handy if you are using this as “bridge financing”. Attractive interest rates can be fixed for the term. Repayment protection can be applied for added peace of mind.
A solid “liquid” position gives you power and flexibility. Why give it up to pay cash for your boat? Use the banks’ money and maintain your strong position and keep the flexibility that a proper toy loan can offer you. Thanks for your time, and I hope to see you in the Great Outdoors!