How to Get a Boat Loan

You’ve clicked through our Boat Finder Tool and figured out exactly which type of boat best suits your needs, shopped around and narrowed the choices down to a winner, and now it’s time to pull the trigger and make your boating dreams a reality—all that’s left to do is figure out how to get a boat loan. Don’t worry, this is every bit as easy as getting a car loan or similar financing.

There are three basic steps to follow to get a boat loan:

1. Identify and price the exact boat you want.
2. Identify and price the boat insurance you need.
3. Initiate the purchase.

Boat Loan Calculator

Boat Loans: Options, Interest Rates and Lenders

If it sounds simple, well, that’s because it is. Most new boats are purchased with a loan, so well-established procedures are in place. As for who to take out the loan from, you’ll have three basic options to choose from:

1. Arranging financing through your boat dealer – This is usually the best bet. Boat dealers set up boat loans every day, so you’ll be working with someone who knows the ropes, has established relationships with lenders, and also wants to make the entire transaction happen as quickly and seamlessly as possible. They can usually help with some recommendations for setting up insurance, too.
2. Get a loan from your bank – Some buyers who have a lot of equity in their home find it advantageous to take out a home equity loan or a second mortgage, either because they may get a lower interest rate or for tax purposes. Remember, however, that this will add some time and complexity to the transaction.
3. Take out a loan with a lender specializing in marine financing – Since financing a boat is a bit different than financing other things, there are some lenders who specialize in it. In fact, there’s even an organization, the National Marine Lenders Association, made up of lenders who are familiar with all the ins and outs of making boat loans.

Use a Boat Loan Calculator

When you get your boat loan, just what will the payments be? To get a good idea of how the monthly expense for different loans will shake out, use our Boat Loan Calculator.

Of course, there are some other variables that can come into play. Credit scores, debt ratios, and net worth may all be considered by the lender, more or less depending on your personal circumstances and the size and term of the loan. However, there are a few generalities that hold true for the vast majority of boat loans:

• Interest rates generally go down as the loan amount goes up.
• Interest rates generally go down as the term of the loan goes down.
• Higher loan amounts can usually be stretched over longer periods of time. In most cases, boat loans range from four to 20 years.
• Usually, the lender will be basing a boat loan on a 10- to 20-percent down-payment. That said, there are some no-money-down deals out there.
• Often, you can roll the expenses of accessories like electronics, trailers, and even extended warranties into a boat loan. Just be sure to pick out the complete package you want, ahead of time.
• Most lenders will be looking for credit scores of about 700 or higher. You can get a boat loan with a lower credit score, but expect that you may have to pay a penalty in the form of a higher interest rate or a larger down-payment.

Be sure to read Financing & Boat Loans: Helpful Information for Boat Ownership to learn more about some of the finer points of financing a boat. And if any questions remain, use your boat dealer as a resource. It’s in their best interest to help you get a boat loan and they deal with the related issues all the time, so don’t hesitate to ask them any questions you may have.