Best Boat Loans Of 2022
- Best for Bad Credit: Southeast Financial
- Best Unsecured Loan: LightStream
- Best Commercial Loan: Coastal Financial
Essex Credit is our choice for best overall boat loan because it offers multiple types of loans, including loans for borrowers who plan to use the boat for recreation or as a residence. It has a simple online application process and specializes in long-term loans from five to 20 years for borrowers with good credit, defined as a minimum FICO score of 700.
Loans have fixed rates starting at 4.74% and no prepayment penalties. However, there are loan processing fees that vary depending on the type of loan. Additional fees that you will incur when purchasing a boat include taxes, title, registration, and licensing fees. These can be rolled into the loan as long as your loan-to-value ratio meets their guidelines.
Essex performs a credit review within one to three business days of when you apply for a boat loan online, but funding times vary based on the vessel and loan type.
Essex Credit will not provide loans for boats manufactured after 2002 or for those that go over 99 mph.
Essex Credit is a division of Bank of the West and has been in business since 1981. In addition to new loans, the company offers refinancing options, as well as RV loans.
Multiple types of boat loans
Long history in the marine industry
Live-aboard loans which not all lenders offer
Loans unavailable for boats manufactured before 2002
Some negative customer reviews
What Is The Average Rv Loan Interest Rate
The average RV loan has a higher interest rate than the typical car loan, and also tends to be longer. According to data from S& P Global, the average RV loan’s interest rate is 6.17% for a new RV purchase and a 36-month loan term, and 6.15% for a 60-month loan on a new RV purchase.
However, your interest rate is likely to be different from the average. Lenders base RV loan interest rates not only on your credit score and credit history, but also on information about the RV you’re looking to purchase, including its type, age, and mileage.
Allstate Boat Insurance Discounts
Multiple policy discount when you also buy an Allstate auto, homeowners, condo, mobile home or manufactured home policy.
Boating education discount when you complete a safety education course approved by the United States Coast Guard Auxiliary, United States Power Squadron or a watercraft enforcement agency of any state.
Homeownership discount when you or your spouse own a house, condo, mobile home or manufactured home.
Organization discount for boaters who are members of an organization that promotes safe boating such as the United States Coast Guard Auxiliary or United States Power Squadron.
Allstate Easy Pay Discount for using Allstates payment plan.
Full pay discount when you pay the total bill.
Early signing discount when you complete your application at least a week before coverage begins.
Look for these possible discounts if youre buying Geico boat insurance.
Boat safety course or training discount if youve completed an approved boating safety course.
Multiple policy discount if you have more than one boat insurance policy or another Geico policy.
Years loss-free discount based on the number of years youve been insured and had no claims .
You may have the option to add a diminishing deductible for your hull and equipment coverage. For every year you dont have a hull and equipment claim, your deductible for that coverage will be reduced by 25%.
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What Is The Best Way To Buy A Boat
Generally, it is best to save up money for a boat before taking on the purchase. However, taking out a loan to cover the expense makes sense if you do not have the cash up front, but are confident youll be able to pay it off quickly. Personal secured and unsecured loans tend to be the best option since there are basically no restrictions on how you use the funds. If youre a homeowner, you could also consider a home equity loan or line of credit. These loans tend to have lower rates, but you will be at risk of losing your home if you do not make payments.
What Is The Average Interest Rate On A Boat Loan
Boat loan interest rates vary by lender. An unsecured boat loan will have an annual percentage rate ranging from 6% to 36%. See the table below for average unsecured interest rates based on your credit bracket.
How’s your credit?
Secured loans may have lower APRs, with many lenders offering single-digit rates. If you’re not sure what credit bracket you fall into, check your credit score for free on NerdWallet.
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How Much Can I Borrow
How much you can borrow generally depends on the price of your boat. Typically, you can fund 90% to 100% of the value of your boat. Minimum loan amounts can start anywhere from $2,000 to $15,000, depending on the lender.
Dont forget the down payment
Like car loans and mortgages, boat loans often require a down payment. Generally, youre required to cover at least 10% of the cost. But lenders tend to favor applicants that can front at least 20% of the boats cost. To avoid over-borrowing, we recommend saving up as much as you can for a down payment so you dont need to borrow as much. The less you borrow, the less interest youll pay.
Remember: Boats are more like cars than houses. Once you make a purchase, your vessel will begin to depreciate. If you borrow a large amount with a lengthy term, you may end up paying more in the long run than its really worth.
How To Get A Boat Loan
To get boat financing directly from a lender, youll need to apply for a loan. Most loan applications are online and require you to submit personal information like your name, address, contact information and Social Security number. You may also need to submit proof of identity, employment and income.
If youre applying for a secured loan, youll want to have information about the boat on hand, including the builder or manufacturer, model, model year and purchase price.
Once you submit your application, youll wait for an approval decision. If youre approved, you may need to visit the bank or credit union to close the loan and receive funds. Unsecured personal loans, especially from an online lender, can typically be closed online and funded the same or next business day.
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Financing Options For Boat Buyers
Like other major discretionary buys, funding a boat purchase often requires financial resources beyond cash on hand. Banks, credit unions and other traditional lenders furnish payment options for boat buyers, who rely on various forms of financing to get the job done. People with cash savings may choose to put the boat on a credit card to secure points. Buyers with a strong credit score might consider a personal loan. Homeowners with significant equity might consider a home equity loan. Boat buyers also turn to dedicated financing from maritime lenders, specializing in marine craft credit.
Buyers with good credit references tap collateral loans to pay for boats, in much the same way cars are funded. Once approved, funds are issued and the boat itself serves as collateral for the loan. Failure to make timely payments can result in repossession, allowing lenders to seize and sell boats to recoup their losses.
Another form of funding with versatile applications uses the equity in your home to guarantee repayment. Home equity loans and lines of credit can be used for various purchases, including recreational watercraft. In order to initiate equity credit, most lenders require a current appraisal. In addition, home equity lines carry closing costs similar to conventional mortgages. Because the loans are backed by real property, however, interest rates are lower than those associated with other forms of funding.
Whats A Good Credit Score For An Rv Loan
A good credit score is generally a FICO score of 670 or better. Many lenders consider a good credit score for an RV loan as one greater than 680 to 700. As with all types of financing, people with better qualifications may benefit from more favorable interest rates, larger loan amounts, and longer repayment terms.
While you can get an RV loan with bad credit, you can expect your APR to be higher and your repayment terms to be shorter than if you had good credit.
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What Should I Look For When Shopping For Boat Insurance
There are many factors to consider when shopping for boat insurance. For starters, youll need to decide if you want a policy that uses an agreed value policy or an actual cash value policy. ACV policies are typically cheaper, but they provide less payout in the event of a total loss.
Furthermore, youll want to look for exclusions and restrictions to boat coverage. For example, some companies will only insure boats up to a certain size, whereas others will not insure boats used for commercial purposes. Knowing the specifics of your boat and what youll use it for can really help you find the best policy to fit your needs.
Once you find several companies that will cover your boat, read the entire list of standard coverage inclusions and compare. Where one company may offer towing as a standard feature, another company may only offer it if you pay an extra monthly fee. Noting these small differences could really save you money.
Finally, consider a companys reputation and the attention it gives to its boat insurance. Some specialty insurance companies focus solely on coverage for boats and other recreational vehicles, while other companies just offer boat insurance as an extra to attract more customers. Noting this can help you get the best coverage from experts who know what theyre doing when it comes to boats.
Other Lenders We Considered
- US Bank: This lender’s loan interest rates weren’t the most competitive, starting at 5.24% for a new boat. The bank states that rates may be higher for private party boat purchases, loans under $25,000, and used boats. Ultimately, lower rates may be available elsewhere.
- USAA: USAA is only available to people with military affiliations, limiting the number of people who can access these loans. However, even those eligible could get a better rate from one of our top picks interest rates start at 5.25% with USAA, about a percentage point higher than a LightStream loan.
- Navy Federal Credit Union: Like USAA, membership with this credit union is only available to certain people. However, a starting interest rate of 5.95% for new boats and 7.45% for used boat loans mean there are better deals to be found elsewhere.
- Boat US: This online boat loan marketplace didn’t beat interest rates offered by other lenders. A high minimum loan amount of $25,000 also may be more than many borrowers need.
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How Many Years Can I Finance A Boat For
As stated above, secured boat loans can be found with up to 20-year terms. Boats hold their value for a long time. They depreciate at a slower rate than cars and may even increase in value after ten years if theyre well-maintained. Lenders take this into account when setting the terms and conditions of your loan. Unsecured personal loans are typically five-year terms.
Best Boat Loans For 2022
LightStream is part of SunTrust Bank and offers unsecured loans designed specifically for financing boat purchases. Youll need good credit to qualify and can borrow up to $100,000. Loan terms range between two and seven years and interest rates tend to range between 4.29% up to 10.84% when you sign up for AutoPay.
Once approved, you have the flexibility to choose your funding date, which can be as fast as the same day. LightStream also advertises it will beat any other qualifying rate.
- Loan amount: $5,000 to $100,000
- No collateral required
- 0.05% rate deduction with AutoPay
- Fixed rate
Essex Credit offers competitive interest rates on loans financing a range of boats, from houseboats to pontoon boats and everything in between. You can apply online to get a rate quote and browse monthly payment amounts using their boat loan calculator.
- Financing for boats 1999 and newer
- Loan amount: $10,000 to $5,000,000
- Loan term: 4 to 20 years
- Available in all 50 states and Puerto Rico
- Minimum FICO credit score: 690
- No pre-approvals offered
BoatUS offers financing options for a range of water vehicles, including powerboats, sailboats, multi hull boats, and pontoon boats. You can borrow anywhere between $15,000 and $350,000 with BoatUS, and sometimes even more. The required down payment depends on things like the age of the boat and the loan amount.
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Use A Home Equity Loan
If you own your home and have enough equity, you can take out a home equity loan and use the cash to buy a boat outright. Although the loan won’t be secured by your boat, it will be secured by your house.
With a secured boat loan that uses the purchased watercraft as collateral, the lender repossesses your boat to recover some of its money if you fail to make payments. If you use your home as collateral to get the money and fail to make payments on time, the lender can foreclose on your home.
Can You Withdraw Retirement Funds Without Incurring Penalties
If youre considering withdrawing money from retirement or investment accounts, make sure youre aware of any withdrawal penalties or negative tax implications. It may make more sense to pay the interest charges on a loan rather than the penalties on a withdrawal.
As a general rule, dont use your retirement account as a piggy bank, Kiely said. Youll have to pay the income tax on it, plus a 10% penalty, unless youre older than 59 ½ years.
Plus, he added, If you withdraw cash for a large purchase and the market goes up 5%, youre going to kick yourself.
Solution: Split the difference
If youre on the fence about what to do, Kiely advised paying half in cash and financing the other half: If you go half way, youre right no matter what happens.
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The Best Boat Financing Companies
Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.
If youre thinking of getting a boat, you probably want to spend your money on that awesome watercraft, not on the loan you may need to get it. LendingTree crunched borrower data, interviewed experts and came up with three of the best boat loans.
Fallen In Love With A Boat Compared With Auto Loans Financing A Boat Can Be A Much Heftier Investment
Boats can be more expensive than a car, which means loan amounts can be higher and terms can be much longer.
Just how much you pay to finance a boat depends on a number of factors, including the type of boat loan you choose, the loan terms, your down payment and your credit.
Lets take a look at the different types of boat loans, your financing options and how to apply for a boat loan.
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The Best Rv Loans Of August 2022
Insider’s experts choose the best products and services to help make smart decisions with your money . In some cases, we receive a commission from our our partners, however, our opinions are our own. Terms apply to offers listed on this page.
Getting an RV loan is more similar to getting a home loan than an auto loan RV loans can be large loans that are harder to qualify for.
Is Financing A Boat A Bad Idea
As a general rule of thumb, you should ensure that any purchase you finance will be paid down faster than it depreciates. If the purchase’s value decreases at a faster rate than your loan balance, you run the risk of going “upside down” on the loan, or dealing with negative equity.
While this is most often talked about in terms of new cars, it’s also a concern with watercraft, especially since boats are quickly depreciating assets.
Negative equity can be a serious concern with a high-value investment such as a boat. If the boat were to be stolen, totaled, etc., you would be on the hook for the difference between the remaining loan balance and the insurance company’s valuation/payout. Negative equity can also come back to bite you if you ever want to trade in the boat or sell it, as you’ll wind up owing your lender out-of-pocket in order to finalize the transaction.
Lastly, it’s important to recognize that financing a purchase will cost you more than the sticker price, no matter how competitive the interest rate you obtain. Between loan processing fees and finance charges, the added expense can be significant.
While financing a boat is not a bad idea in and of itself, it’s important to strike a balance between your purchase price, down payment amount, and loan repayment terms. This will help maintain a healthy loan-to-value ratio and ensure that you don’t pay significantly more for your purchase over time than if you’d paid in cash.
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