How To Apply For A Boat Loan
Applying for a boat loan is similar to applying for a personal loan or auto loan. Youll need to find a lender first. In some cases, you can apply online. Otherwise you may be able to apply in person at a bank or credit union.
Next, youll typically need to provide information such as the loan amount, purchase price of the boat, type of boat and age of the boat along with employment information and other personal info about your assets and debts. As with personal loans and auto loans, this could result in a hard credit inquiry to check your credit profile .
Then youll wait for approval, which could be available as soon as the next business day, or may take a few business days, depending on the lender youre working with.
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.
The Consumer’s Guide To Purchasing A Boat
Despite the hectic demands of modern living, people always find time for recreation and travel. Apart from taking an RV to go the beach or camp in national parks, quite a number of people actually enjoy boating activities. When summer comes, people with access to boats can enjoy fishing, water sports, and a relaxing cruise toward the sunset.
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What To Consider For Boat Payments And Affordability
When you’re in the market for new or used boats, it can get rather daunting when you have no idea where to start. One of the keys to a successful boat purchase is knowing what you can afford. This boat payment calculator takes all the hard work out of making a sound financial decision. Simply enter in your desired monthly payment or vehicle price and it will return your results.
Boat Loans: Calculate How Much Boat Financing Could Cost You
Boat loans are available from a variety of lenders, including banks, credit unions, and online lenders.
Kat TretinaUpdated March 8, 2021
Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”
Whether you love sailing, offshore fishing, or other water activities, you might consider buying a boat. However, boats can be expensive: Smaller vessels start at $10,000, while offshore fishing boats might cost $400,000 or more.
If you need to cover the cost of a boat or would like to refinance a boat you already own, a boat loan might be a good choice. Just keep in mind that youll likely need good credit and verifiable income to qualify.
Heres what you should know about boat loans:
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Winter Storage For Boats
Another important thing to consider is proper boat storage, especially during the winter. Keep in mind that storage costs depend on the size of your boat.
Some owners park their vessel in a marina all year round. This is a common practice in areas with temperate weather and mild winters. It applies to larger boats that can’t be towed in dry storage lots. To insure boats don’t sustain damage during the cold, owners winterize their boat and add ice agitators to prevent the water from freezing around their rig.
Renting a storage spot at a marina is called renting a slip. If you get yourself a permanent spot, it can actually yield considerable savings. Improve Sailing states that regular docking slips for boats that are 24 to 74 feet cost $12 to $50/ft. per year. Prime areas in the US have a rate between $120/ft. per year to $240/ft. per year.
On the other hand, owners take their boat to outdoor dry storage facilities, which is considered the most budget-friendly option. It is also more common than indoor facilities. The average cost for outdoor storage ranges between $20 to $50/ft.
Another option during winter is indoor boat storage. This is the most expensive yet provides the most protection for your vessel during harsh winters. Indoor boat storage costs between $50 to $200/ft of boat. The challenge for owners is finding a nearby storage facility in their area.
Interest Rates And Terms
While there are affordable boats in the market, boats are mainly considered recreational purchases such as RVs and motorcycles. Thus, rates for a boat loan are usually higher compared to cars . Boat loan interest rates may start around 4.5% and up.
As for loan terms, payment periods range from 2 years, 15 years, and even 20 years. A more expensive boat will usually take a longer repayment period unless you’re willing to pay down your loan within a shorter duration.
If you’re a member of the following credit unions, it’s worthwhile to take note of their loan terms and rates:
- Navy Federal Credit Union Offers members with secured loans for boats and personal watercraft up to 3 years. Loans are up to $500,000 with the lowest rates starting at 6.05% APR for new boats.
- First Tech Federal Credit Union Provides secured boat loans for new or used boats with a limit of $500,000. The lowest rate starts at around 4.5% APR and gradually increases for older boat models.
To give you a better idea on boat loan rates, Boat U.S. provides information on estimated rates and terms based on loan amounts. Presuming you have a high credit score, see the projected rates below. Just take note that rates and terms vary per lender.
|Boat Loan Amount|
|4.99%||Up to 20 years|
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Boat Loan Interest Rates
Your boat loan interest rate depends on your credit report and credit score as well as the amount borrowed and the loan term.
Boat loans can be secured or unsecured. With a secured loan, the lender can repossess the boat if you don’t make your payments as agreed. With an unsecured loan, the lender cannot repossess the boat. The lender relies entirely on your promise to repay the loan.
- Secured boat loan interest rates range between 4.5% to over 20%.
- Unsecured personal loan rates are comparable with those for secured loans – if your credit is excellent.
Applicants with bad credit do better with secured boat loans because these are less risky for lenders.
Understand The Costs Of Owning A Boat
Boat loan down payments typically range from 10% to 30%, so make sure you have enough money saved up to cover the cost of the down payment before you apply for a loan. Once you own a boat, youll also have to cover maintenance and related costs. Some of the expenses youll need to cover as a boat owner include:
- Trailer to transport and store your boat: If you dont plan on storing your boat near the water, youll need a trailer to transport it from your home.
- Boat insurance: Boat insurance can protect you in the case of an accident or if anything happens to your boat.
- If you dock your boat at a marina, youll typically have to pay monthly fees for the privilege.
- Registration: Just like a car, many states require boat owners to register their boat. Costs vary widely from state to state.
- Winter storage: If you live in an area where weather conditions arent suitable for boating year-round, youll need to store your boat in the winter.
- Maintenance: Routine maintenance costs include painting, cleaning, and replacing small parts.
- Gas: If your boat is powered by gas, youll need to fill it up regularly.
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Boat Loans: Options Interest Rates And Lenders
If it sounds simple, well, thats 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, youll have three basic options to choose from:
Can You Get A Boat Loan On An Old Boat
Getting approved for a boat loan on an older watercraft can be tricky, but it is certainly possible. Some lenders will offer used and refi loans on boats as old as 19 years. If the boat is of high value, you may even find lenders willing to finance a watercraft as old as 25 or 30 years.
Expect that interest rates for old boat loans may be higher than those for newer boats, and you may even encounter higher down payment requirements.
If youre unable to find a lender willing to finance your old boat purchase, consider taking out a personal loan instead.
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Getting A Boat Registration
Apart from your boat loan and insurance, don’t forget to register your boat. The cost of registration varies per state and also relies on the length and type of boat. This can cost you anywhere between $25 to $250.
You can register at the Department of Motor Vehicles office. For complete licensing requirements for all states, you can go to the DMV’s Boating License page.
Boats that should get registration include private vessels like yachts and even jet skis, sailboats, and powerboats. On the other hand, boats that do not require registration include the following:
- Boats that only use paddles or oars
Purchase A New Or Used Boat Jet Ski Or Watercraft With Competitive Rates Starting At 219%
At Greater Texas Credit Union, our goal is to assist our boat-enthusiast members with everything they need to set out into open waters. We provide secured loans for all types of boats, including pontoons, jet skis, personal watercraft, and more.
Members get great perks and features with our boat loans:
- Competitive Rates: Rates as low as 2.19% are available for qualified borrowers
- Flexible Term Lengths: Enjoy loan terms ranging up to 120 months
- No Prepayment Fees: Pay off your boat even faster and with fewer surprise expenses
- Zero Upfront Fees: Save more, guaranteed!
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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.
Online Boat Sales Team
Do you have additional questions? Maybe you are even ready to apply? Let us introduce the White River Online Boat Sales Team. As part of White River Financial Services, the Online Boat Sales Team can help MAKO Boats customers to easily apply for great finance options, and even shop for a MAKO boat at dealerships nearby. Theyre here to help at any stage of your shopping process!
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Final Thoughts On Buying A Boat
The key to buying the boat buying process is to be informed.Whether its budget, boat specifications or usage, having the correctinformation will allow you to save time, money and hassle. The whole point ofbuying a boat is to enjoy life. Taking a moment to determine which boat isgoing to offer the most enjoyment for your money will ensure that experience isfun without ever feeling overextended.
What Is A Good Interest Rate On A Used Boat Loan
While used boat loans can occasionally have rates higher than those offered for new boats, this isnt always the case. In fact, many lenders offer the same competitive rates whether youre buying used, new, or even refinancing. Because of this, applicants can expect to find used boat loans with rates in the 4% to 5% APR range.
For instance, Bank of the West our overall top pickoffers interest rates starting at 3.59% APR for watercraft over $50,000, whether the boat is new or used.
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See What Our Members Have To Say
We have been with GTFCU for over thirty years and obviously have not had a reason to change. I am a financial services professional so I am aware of other options and have easy access to them. But GTFCU is fine for mobile banking and small enough that people take personal ownership of resolving any issues that arise. – Tom C.
Enjoy the credit union difference today and discover how low-interest boat loans provide everything you need to stem the tide and sail into your next adventure.
*Annual Percentage Rate
The APR you receive for the subaccounts will be within the range disclosed above and is based on your credit worthiness. Ask the credit union for the rate you qualify to receive.
**Used RVs and boats can be financed for up to 100% of NADA retail value or BUC price guide. Loans cannot exceed the purchase price. Rate based on credit qualifications and other restrictions may apply. Additional rates and terms available. Subject to credit approval.
***New member applicants may not be eligible for unsecured loan applications for a period of 90 days. All unsecured loan applications may require additional review and verification during the application process. No loan applications will be considered until membership applications have been completed and all information including identification verified.
High Performance Power Boats
If you’re serious about watersports racing, this is exactly what you need. A boat is considered a high performance vessel when it runs at 60 mph or more. These boats are primarily powered by outboard engines and are usually 16 to 24 feet long. Other luxurious models are around 34 to 54 feet in length.
High performance power boats can accommodate 8 passengers and are designed with go-fast center consoles for more seating capacity and wider space in the cockpit. Luxury models come with a 50-ft. V-bottom designed with a cabin that’s perfect for beach vacations. On the other hand, a 34-ft. model can have 6 seats and a cozy space underneath its deck.
High performance powerboats are not for the faint of heart or bank account. In speed boating standards, more powerful engines mean higher maintenance costs. Some owners purchase factory warranty as long as 8 years to even out their maintenance expenses. Your lightning speed boat will likewise have higher fuel expenses compared to conventional motorboats.
Price: These boats have a higher price point than other speed boats. New models start at 6 figures around $300,000, with high-end models reaching over $1 million .
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How To Use Our Boat Loan Calculator
To use our boat loan calculator, enter how much you want to borrow for how long and the interest rate you expect to pay. With these inputs, the calculator will compute your estimated monthly payment on your boat loan.
The loan amount should include any taxes, registration fees or add-ons youd like to finance, but it shouldnt include any down payment you plan to make.
The interest rate is how much youre paying the lender for the loan, expressed as a percentage. You could use the annual percentage rate instead, which includes the interest rate and any fees or additional costs. An APR would provide a more accurate estimate.
The loan term is how long you want to borrow the money for the boat. Its expressed in years in our boat payment calculator, but you may find lenders that express it in months.
See if the estimated monthly payment fits into your budget. Its also important to keep in mind that having a boat will cost more than just payments. Boat storage in the off-season, boat insurance, fuel and maintenance can add up, so we recommend having a boat payment that is financially comfortable.