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How To Boat Loans Work

Whether Youll Need A Marine Survey

How does marine financing work for a boat loan?

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.

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.

Process Of Getting A Used Boat Loan :

  • Get Credit Approval

Getting credit approval is all about if you and your financial situation qualify for the loan. They will typically require a credit score over 680, however some lenders offer loans to 580 credit scores with larger down payments.

Another portion of the credit approval process is checking your debt to income ratio with the new loan payment. They will check your gross income vs your total monthly debt payments . Often, the lender will ask for proof of income via pay stubs and possibly w-2s.

If self-employed, they may require tax returns.

If financing over $500,000, they may also require proof of assets.

  • Get Collateral Approved

When buying a used boat from a private seller, the lender will want to verify information about the boat, motor and trailer. Specifically, year, make, model and options of each.

The lender will determine the value of the boat for lending purposes and will set their maximum loan amount accordingly. This typically falls in line of 10% down with excellent credit and a well negotiated sales price.

If credit is not perfect, the down payment amount will be 20% or more.

The lender will also require copies of the titles for the boat, motor and trailer to confirm all serial numbers. They may also request a photo or personal inspection of the boat and serial numbers prior to funding the loan.

If there is a lien on the boat, they will want to verify that information with the sellers lender.

  • Request Outstanding Loan Payoff

Tons of boating fun!

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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.

Why You Can Trust Bankrate

How Does Boat Financing Work

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. Weve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.

Our loans reporters and editors focus on the points consumers care about most the different types of lending options, the best rates, the best lenders, how to pay off debt and more so you can feel confident when investing your money.

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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!!!

Here Are A Few Lenders That We Recommend Based On Your Situation:

Used boat under $15,000

Used boats from $17,000 to $30,000

Used boats from $30,000 to $55,000

Used boats over $55,000

P.S. When you’re ready, here are some additional resource that will be valuable for boat shoppers:You can continue your research with the over 100 additional videos, articles and podcasts on this site. Plus, you’ll want to check out 3 of our most popular resources below if you haven’t already.

1. Attend The US Boat Expo

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How Does A Boat Loan Work

We will loan you the money for a new or used boat, and you will pay it back with interest over a specified period of time.

Its good to plan ahead by getting preapproved for your Boat Loan. That way you can have a better idea of what price range you should be shopping for. Being preapproved also gives you good negotiating power with the seller.

Elements can finance up to 90% of your boats value, including tax and license. Its a good idea, though, to put down at least 20% of the purchase price. Of course, the more you pay up front, the lower your monthly payment will be.

Whether you’re interested in purchasing a boat or other recreational water vehicle or would like to change your lifestyle, Elements can help you start your adventure.

How Does A Boat Equity Loan Work

How Does Boat Finance Work?

February 29, 2016 by admin

A boat equity loan is a type of short-term secured cash loan that uses the title of your boat as the collateral. The loan amount is determined by the current market value and condition of your boat.

A major benefit of this loan type is that there is no credit check involved nor is a co-signer required. The lack of a credit check means is that there is no protracted approval process, and even if you have non-existent or substandard credit, you can qualify.

Additionally, you can maintain possession of your boat while paying off the loan. You provide your boat title, and you can keep the keys. Its a simple exchange, and as soon as you make your final loan payment, weâll return your title to you.

If you decide to proceed with the process, the only requirements we have are that you be at least 18 years old, and you also need proof of employment or another regular income source. Furthermore, you will need to be prepared to show identification and references.

We are a nationwide company and we work with boat title lenders throughout the country. No matter your location, you can secure a boat equity loan with us.

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What To Consider Before Getting A Boat Loan

Although there are a few choices for budget boats, most of them cost well into the thousands, and anyone in the market for a luxury boat can expect the price tag to be far higher than what most families have on hand for recreational expenses.

Once you have your sights set on the boat of your dreams and are ready to look at financing the purchase, take a moment to consider all factors that could affect your final decision.

Remember that the price tag is just one of the expenses attached to owning a boat. Maintenance and insurance can quickly turn into big-ticket items. And if you plan on keeping the boat at a marina, expect to pay monthly rent for a storage area, as well as administrative fees.

Anyone preparing to take out a loan should also take an honest look at their personal finances and future earnings. Once the contract is signed, the money must be paid back. Be sure to look closely at the fine print.

What Are Boat Loans

Boat loans are typically fixed rate, fixed term, simple interest loans secured by the boat being purchased.

While most individuals are quite familiar with auto loans, its important to be aware of some key differences between financing a car and financing a boat. For instance, due to the structure of the auto industry and the volume of auto sales, dealers often offer below normal financing rates. Auto manufacturers often offer rebates or subsidies to their dealers which enable special promotional rates. For the most part, this dynamic doesnt exist with boat dealers, and the interest rates on boat loans are strictly tied to market rates.

Also, its worth noting that banks often look at boat loans with a bit more scrutiny. Because boat purchases are considered a more discretionary item compared to a home or an automobile, banks realize that if a borrower gets in a pinch, the boat will likely be the first thing for which the borrower stops making payments. Because of the discretionary nature of boats, this invites a further degree of scrutiny in the boat financing process.

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Bank Of The West Boat Loans

Types of boats financed: Boats must be model year 2001 or newer to be eligible. Bank of the West specifically says that it finances standard or custom power or sailboats, multi-hull boats, pontoon boats, and electric boats. The lender also offers loans for high-performance boats, houseboats, and wood hull boats. However, it does not finance boats that can exceed 99 miles per hour.

4.29% to 9.99% for both new and used purchases, and 3.59% to 3.94% for live-aboard boats

Loan amounts available: $10,000 and up for new and used boats, $25,000 and up for live-aboard boats. Loans over $2 million are available.

Watch out for: Credit score requirements. Bank of the West states on its site that it lends only to people with credit scores of 700 or higher.

Boat loans through Bank of the West and its lending division, Essex Credit, are a good option for people planning to get a boat loan of $50,000 or above.

A $10,000 boat loan with Bank of the West would have a starting interest rate of 8.89%, a $15,000 boat loan would start at 8.39%, and a $50,000 loan starts at 4.29%. While their rates for loan amounts over $50,000 are competitive, anyone looking for a smaller loan may find a better rate with LightStream.

It’s worth noting that this lender does have a loan processing fee that could add to your total cost of borrowing. A 10% down payment is also required for loans between $10,000 and $200,000, and percentages increase for higher loan amounts.

S In The Process Of Boat Financing

How do Boat Loans Work?

Shopping for a boat loan overlaps with the process of buying a new boat. Here are the basic steps:

  • Know and understand your financial abilities and your credit rating. Check your credit with the major credit reporting bureaus and correct any inaccuracies.

  • When you apply, be ready with tax returns and bank statements that show your financial ability to repay. Be prepared to submit those materials to speed up the review process.

  • Be aware of special use limitations. If you want to live aboard your boat, use it for commercial purposes such as charters or as a fishing guide or to cruise internationally, tell the lender. Not all lenders will loan money on a boat used for those purposes.

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    How Long Does It Take To Get Approved For A Boat Loan

    New Boat loans can be processed and closed in a week, which is much faster and easier than real estate loans. Financing for pre-owned vessels takes longer. However, Boat Loan Specialists, working with Lenders who know the marine industry, can process paperwork faster, provide guidelines of all the things that are needed for a Boat purchase, and refer needed resources. They are, more knowledgeable, faster and easier to work with than a personal banker.

    How Does Interest Work On Boat Loans

    Boat loan interest generally works in the same way as the interest you would pay on a home loan or car loan.

    When you take out a boat loan you will repay the principal amount borrowed, as well as interest charged by the lender. The borrower repays the principal and interest in weekly, fortnightly or monthly repayments.

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    Visit Us Before You Get On The Water

    Make some waves with a boat loan from Flagstar Bank. Our bankers will work with you to help you purchase a new or used watercraftor even refinance a current boat loan. And with quick approvals and easy boat financing, you may as well visit the branch with your boat shoes on.


    • Competitive interest rates
    • 100% financing available for qualified customers
    • Simple loan application
    • A variety of terms available on new and used boats
    • 0.25% rate reduction for qualified customers1
    • 0.25% rate reduction when payments are automatically made from a Flagstar bank deposit account2

    We look forward to helping you with your boat financing. Here’s what you need to qualify for a boat loan:

    • Be 18 years or older
    • Be a U.S. citizen or permanent resident alien
    • Open to residents in California, Indiana, Michigan, Ohio and Wisconsin only
    • Available for individual borrowers only. Other underwriting conditions may apply

    Required Down Payment For A Used Boat Loan:

    Financing a Boat and What Works Best

    As you discovered above, most lenders will require at least 10% down on a used boat loan. There are a few exceptions to this rule based on my experience.

    Insiders Tip: Credit Unions Some credit unions will do a no money down boat loan and will extend the term 5 to 8 years with good competitive rates.

    Capt. Matt

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    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.

    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.

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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.

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