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.
Whether Youll Need A Marine Survey
When you apply for a secured boat loan, the boats value will be a factor in how much you can borrow.
If youre not getting a new boat, you should get a marine survey. During a marine survey, an inspector will examine the vessel, engine and trailer, detail the boats condition, note any repairs needed and determine whether its safe to take on the water.
Applying For A Boat Loan
There are a few steps youll need to take in order to apply for a boat loan. These include:
- Whether youre interested in a sailboat, motor boat, or houseboat, what boat you want to purchase will influence what type of loan you need from a lender.
- Compare rates: When shopping for a loan, you should compare rates from multiple different lenders. This can help to ensure that you get the best deal possible.
- Review your credit score: Some lenders have minimum credit score requirements, while others reserve the most competitive rates for borrowers with excellent credit. Make sure your score is in a good place before applying.
- Make sure you have enough for a down payment: Typical down payments range from 10% to 30% of the total loan amount.
- Complete a loan application: To apply for a loan, youll need to provide information about yourself and the boat you want to buy, including your name, address, social security number.
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How Long Can You Finance A Boat For
Financing a boat in Canada can be an easy way to start into boating or upgrade to what you really want. Whether you are paying for a boat with cash , or you plan to borrow in one form or another, boats hold their value very well. Because of that, banks with specific boat loan programs will have longer amortization for boat loans than personal loans, or loans for almost all other motorized equipment.
Here are some basic guidelines for boat loans:
All loans are O.A.C. .
New boats can have amortizations up to 20 Years. You can choose to have it less time, and yet this is typically the maximum if you qualify for it.
Used boats are often able to have amortizations up to 20 years – the age of the boat. For example, in 2019, a 2016 bowrider would likely have a maximum amortization of 17 years .
The rate you qualify for depends on your credit score, the age of the boat, the amount you are borrowing, the amount you are putting down in cash , and the current prime lending rate at the time of application at the bank you are applying to.
Applying for a boat loan means that they will, upon your approval, check your credit score and seek a pre-approval on a boat loan. This process is often referred to as a hard credit check. This can cause a very slight and temporary decrease in your credit score. We advise not having multiple credit approvals run at multiple boat dealerships within a short period of time.
Payments can usually be weekly, bi-weekly, or monthly
Getting An Accurate Boat Value For Loan Purposes
Forewarned is forearmed, right? You bet it is, so if youre looking at used boats, its also a good idea to understand what theyre worth. Boat lenders pay attention to boat values when lending, and you can access the same information they have.
Like credit reporting agencies, there are a few sources for researching boat values and prices. These resources can also help you determine the value of your own boat, which is great for getting a fair trade-in or resale price.
The key bit of guidance for securing a boat loan is to do your research and to be as prepared as possible.
The lenders that BoatUS works with take into consideration the age of the boat and the value of the boat, Mann said. There is not a significant difference in available rates or terms between a brand-new boat or a 3-year-old boat, for instance. Since these lenders are looking at the value of the boat, they will typically require a down payment of around 10 to 15 percent.
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How Else Can I Pay For A Boat
If you cant find a boat loan near you or would rather not use it as collateral, you might want to consider these alternatives:
- Leisure vehicle loans. Some lenders offer leisure vehicle loans that cover a wide range of vehicles from jet skis to RVs and include boats.
- Save up. Not in a rush? Saving up is the cheapest way to buy a boat, since you wont have to pay any interest or fees.
- Rent a boat. Marketplaces like GetMyBoat act like Airbnb for watercrafts, letting you reserve one when you need it.
- Find a boat club. Boat clubs give you access to fleets of boats in exchange for a monthly or annual payment and you wont have to foot the bill for insurance and maintenance.
Best Boat Loans In : Finance Your Boat
Boat loans can be unsecured or secured by the boat. Compare financing options from online lenders, banks and credit unions.
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Setting sail on your own boat is a priceless experience. But unless youve saved a lot of cash, youll need a boat loan to make your dreams a reality.
You can get a boat loan from a banks, credit union or online lender. The application process is typically fast, and approval is largely based on your credit score and ability to repay.
Before you jump in, consider that most financial experts don’t recommend personal loans for discretionary purposes, especially if you already carry credit card or other debt. If you take a personal loan, have a plan to pay it off.
Heres how to finance a boat with a personal loan including unsecured and secured loan options where to find boat loans and factors to consider before applying.
Setting sail on your own boat is a priceless experience. But unless youve saved a lot of cash, youll need a boat loan to make your dreams a reality.
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Average Length Of Boat Loans
While you can technically obtain a boat loan anywhere from 12 months to 20+ years depending on the lenderthe average boat loan is between 2-15 years. Boat loans, unlike home loans, are typically going to be less than $100,000 which means the payoff period will be shorter than say a 30 year mortgage. However, you can still get a great rate below 4% with great credit and can hit the water sooner than you thought possible!
The rule of thumb when obtaining a boat loan is the more money you borrow, and the quicker you can pay it off, the better your rate will be. For example on the low end, if you borrow $10,000 on a 5 year loan you will be paying a much higher interest rate than borrowing $100,000 on a two year loan. Why? It basically breaks down to your lender maximizing cash flow while also minimizing risk. In order to obtain a $100k loan, the bank knows your credit and ability to pay it back is higher than borrowing $5000 over two years.
Can I Finance My Fish Finder Chart Plotter Radar And Other Fishing Electronics
Financing is not only for the price of the Boat. Tangible assets can often be rolled into a Boat loan, including Marine electronics, trolling motor or Anchoring packages and Bottom paint. Note that labor to install the Electronics or perform commissioning tasks for new boats cannot be Financed.
-Tom Smith is President of Sterling Associates, a Financial Services Firm headquartered in Massachusetts that provides Financing, Insurance and Coast Guard Documentation services for all types of boats. Let Sterling get you, On The Water!!!
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Best For Quick Funding: Lightstream
- Minimum credit score: None, but good credit recommended
- Loan terms : 24 to 84 months
For borrowers looking for fast funding for a boat loan, LightStream is a great option. The lender offers same-day approval and even same-day funding in some cases.
Funds deposited as soon as same-day
Rate Beat program
No fees or collateral required
Available for buying or refinancing a boat
Offered in all 50 states
Loans cap out at $100,000
Maximum rates can be high
As part of the Truist bank family, LightStreamalong with SunTrust and BB& Tprovides a variety of banking products and services to customers across the country. This bank operates in all 50 states, offering loans on new, used, and refinanced boats to qualified applicants ages 18 and over.
We chose LightStream as best for quick funding because this bank offers not only same-day approvals but same-day funding in many cases. You can choose your own funding date once approved for your boat loan, even if its the same day you applied.
Boat loans through LightStream are offered from $5,000 to $100,000 with repayment terms ranging from 24 to 84 months. Current interest rates range from 4.29% to 11.89% APR with a 0.50% auto-pay discount. They also offer a Rate Beat program, which promises to offer a rate thats 0.10% lower than the rate offered by a competing lender within the last business day.
How To Calculate The Monthly Cost Of A Boat
The second monthly payment budget calculator shows how expensive of a boat you can buy given a monthly loan payment. Add rebate to downpayment? Add sales taxes into loan? Generate Monthly Boat Loan Amortization Schedule? Use this calculator to estimate the boat price you can afford given a set monthly loan payment.
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Ready To Secure Boat Financing
The bottom line? If youre buying a new boatwhich wed certainly encourage as opposed to buying used, since new boat-buyers report a much higher level of satisfactionand your credit score and debt-to-income ratio are up to snuff, you should have no problem financing a boat that meets a lenders minimum loan amounts for up to 20 years.
Use our Boat Buyers Guide to help work through all the other factors that should be taken into account when making a purchase of this nature, and youll have years of fun on the water to look forward to.
Best Overall: Bank Of The West
Bank of the West
Bank of the West is our top overall pick for a boat loan. The lender features low rates, flexible loan amounts, and widespread availability, making it a great choice for borrowers with good credit looking to purchase a boat.
Loans up to $5 million
Repayment terms between four and 20 years
Available in all 50 states
Full-time and liveaboard accepted
Fees can be rolled into loan
Rates as low as 3.59% APR
No cosigners allowed
Bank of the West is arguably one of the most popular watercraft lenders around. Founded in 1874, Bank of the West, also known as Essex Credit, operates and provides loans to creditworthy borrowers in all 50 states. Boat loans through Bank of the West can range from $10,000 all the way up to $5 million, with repayment terms from four to 20 years depending on the loan amount.
While the wide range of loan amounts and repayment terms is great, this lender wins our best overall spot because of the types of boats it accepts. Bank of the West offers to finance for boat model year 2001 or newer. Allowed boats include standard and custom power, sailboats, multi-hull boats, pontoon boats, electrical boats, high-performance boats, houseboats, and wood hull boats. One of Essexs few exceptions is boats that are capable of speeds of 99 mph or higher.
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Use A Boat Loan Calculator
The LendingTree boat loan calculator helps you determine your monthly payment using the loan amount, interest rate and loan term. Additionally, the calculator breaks down monthly payments by year, helping you plan ahead. Should you find that your estimated payment is a bit tight for your budget, the tool allows you to adjust the loan amount and/or boat loan term to find what best fits your needs. When its time to buy, you may fill out a single LendingTree form and receive up to five possible boat loan offers from lenders based on your creditworthiness.
Calculate Payments With Our Boat Loans Calculator
Use our boat payment calculator to determine a monthly payment that you can afford when looking to finance a new or used boat.
Simply enter your desired amount, estimated interest rate, and the loan term over which you intend to pay back the loan. Once you’ve input the information, the calculator will generate your estimated monthly payment on your boat loan. Take this number and plug it into your current monthly budget.
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What Do Lenders Look For In A Potential Boat Buyer
Obviously, a high net worth appeals to lenders, and they will want to know that youre not already overextended with other loans. Lenders want to see that you have managed loans of a similar size before. Lenders also look for liquid assets that will cover 12 to 16 months of payments. Steady employment and a primary residence are factored together by a lender as part of the candidate evaluation process.
What Is A Boat Loan
A boat loan is a specific type of loan that is used to finance the purchase of a boat. The loan can be used to finance a new or used boat and may include different types of watercrafts such as jet boats, pontoon boats, sailboats, and even yachts. Rates and terms vary based on the lender, type of loan, type of boat, and borrower qualifications.
There are different types of boat loans including unsecured and secured loans, loans from online lenders, bank loans, personal loans, commercial loans, and loans that come from marine lending specialists. Boat loans typically range from two to 25 years with longer terms of 1020 years being the most common.
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Boat Loans: Questions To Ask Before You Apply
How does the loan fit into my budget? Monthly payments on a boat loan should fit comfortably within a budget that covers all of your needs, wants, debt payments and savings. Use our boat loan calculator to see estimated monthly payments, interest costs and total payments.
Payments toward the boat loan combined with other debt payments shouldnt exceed more than 20% of your income.
What is the true cost of boat ownership? Buying a boat isnt your only new expense. Additional costs include fuel, licenses, insurance, storage, maintenance and repairs. Boats also depreciate over time, just like a car.
Does my boat have resale value? Its smart to buy a boat that is both affordable and popular, as this can attract potential buyers if you decide to sell it and pay off your loan at any point in the future.
Best Commercial Loan: Coastal Financial
Why We Chose It: Coastal Financial is our top choice for the best commercial boat loan because the company specializes in charter boat financing and will also take care of setting up charter management and boat insurance for you.
Offers boat insurance and charter management
No upfront rates
No published loan fees
You have to contact the company for borrower requirements
Coastal Financial offers a quick application process and fast funding. It finances new and used boats, charter boats, refinances, and RV purchases. It offers boat loans from $5,000 $5 million and approvals take less than 24 hours. You can apply online or over the phone.
In addition to boat loans, Coastal Financial also offers U.S. Coast Guard documentation, boat insurance, and a boat charter management program. Coastal Financial offers commercial loans for yachts, fishing boats, catamarans, and sailboats. Youll need to contact the company for loan fees and specific loan requirements and terms as they are not available on the website.
Once the borrower and vessel are approved for a charter loan, you put the boat in your companys LLC and you can enter it into a charter program. You can choose how often you want the boat chartered, and when you want to use it, and the company will handle the rest.
Coastal Financial has mostly positive customer reviews with customers appreciating the marine industry knowledge, easy application process, and fast funding times.
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