I have a boat loan that is financed for fifteen years, but I have only paid for six years. I can no longer afford it, and haven't had any luck in selling the boat. What are my options?
The three options you have are:
1) make the payments, 2) sell it or 3) let the bank repossess it.
1) Make the payments -- you expressed difficulty in doing this. Ask the bank if you can refinance the loan for a six month term, lowering the payments for the loan and having a balloon payment. This means they'll base the payments on a longer loan, and the final payment will be large, as it will be the rest of the amount owed. Hopefully you can sell it during this next few months, as the summer will bring out more buyers.
2) Sell it -- You've tried this, but do more than put a sign on it. Shop it by dealers, park it at the lake, get it in the paper and anything particular to the boating and recreational industry. Get it in those free papers you pick up in restaurants, and tell the bank what you're doing, so that they can see your efforts. Don't over price it. At this point, the boat needs to look good and operate as it should. You need to be concerned about getting out of the debt, not recovering equity. If you lose the boat, you'll lose the equity and your credit will suffer.
3) Repossession -- This will have a huge negative effect on your credit. This means that future credit will be difficult to get, and will be more expensive. When the bank is the seller of the boat, it is a fire sale and buyers know the bank wants to get rid of it. If it is sold for half of what you owe, you'll be expected to pay that other half back. The bank will contact you, potentially turn the loan balance over to a collection agency and you'll be repeatedly asked to make some payments, as often as you can. Eventually you'll get it repaid, or they'll consider the debt "dead" and they'll report what you owe as income to the IRS. The IRS will then ask that you pay income tax on that amount.
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The three options you have are:
