Friday, May 10, 2024

What Is The Average Boat Loan Term

Other Alternatives To Boat Financing

How does marine financing work for a boat loan?

If you really want a boat but choose not to finance your boat purchase, you still have other options, including rental, joining a boat club, or saving up on your own.

Boat Rental: In many cases, a marina will offer boat rentals by the hour or by the day, allowing you to enjoy all the thrill of boat ownership with none of the long-term responsibility. There are also peer-to-peer rental groups like Boatsetter, that offer an AirBnB flair to the process.

Boat Club: With little more than a membership fee and monthly dues, a boat club is a great way to have access to multiple types of boats anytime you want.

Save Up: It may feel like you have a long way to go, but saving for the boat you want is a sure-fire way to ensure you dont end up underwater in a boat loan. To start, look at creating a Sinking Fund, which will allow you to set aside money each month toward this goal while continuing to pay down debt or save toward other projects at the same time.

Are you looking to buy a boat? Or do you want to start saving for that dream yacht? Regardless of your goals, our team at Spero is here to help! We can help you in any number of ways. When youre ready, just let one of our member service representatives at any Spero branch know!

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What To Expect When Inquiring About Boat Loans

Lenders will inquire about your credit score, your net worth, your home and employment status and debt to income ratio. You can also expect the lender to ask for proof of income through a W2 or recent paystubs. Although all of these factors are important when attempting to get approved for a loan, the most important is your interest rate. Rates at 650 or above should have no issue securing financing, but if you inch below the 650 mark, you might have to have above-average scores in the other areas lenders check or you can expect a higher interest rate.

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.

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How Long Can You Finance A Boat

Boat financing is not terribly different from financing a car, a home, or other major purchases, but people often wonder just how long you can finance a boat for. There are different variables , that will affect just how much your monthly payment boils down to, in addition to the length of the term.

So, these other factors also need to be considered when you sit down with a pencil and paper to determine how long you should get the loan for.

How Do I Apply For A Boat Loan

How Long Can You Finance A Boat?

While every lender will have its own unique application process, in most cases, youll need to provide the same information when applying for a boat loan.

  • Start by comparing your options you can begin with the table above.
  • Fill out the application with details about yourself and your income.
  • Apply for the loan and see if youve been preapproved.
  • If you have, work with the lender to discuss your needs and finalize your loan.
  • Once you have financing, you can start to shop for a boat that suits your needs just dont let a salesperson talk you into buying more than you can afford.

    Will I need to know what boat I want before I apply?

    It depends on the lender. Some might ask for a model and make, while others might allow you to apply for a ballpark amount, based on your budget. If youre unsure, ask your lender whats required ahead of time.

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    Introduction To Boat Financing And Loans

    The refreshing feel of an ocean breeze against your face. The feeling of summer when you get on the lake for the first time of the season. Boating brings us so much joy at Rollick, our goal is to help you turn that dream into a reality. If youre looking to experience the water with a new or used boat, this guide to financing will help get you across the finish line. As a prospective boat buyer, your goal is to buy your boat at a reasonable price, and since the average price of a new boat is $42,000 odds are youll need a loan to help you afford your new boat. In this guide, we will cover some of the nuances of boat financing that differ from financing a car or a house. We will also go over some tricks of the trade and what to expect when you get to this place in the boat buying process.

    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 Are Boat Loans

    Unlike car loans, which typically last anywhere from 3-7 years, on average, boat loans are more similar to a home loan in length. You can expect boat loans to be in the 15-20 year range. The higher the cost of the boat and the less you put towards the down payment, the longer your loan term will be. However, shorter-term boat loans definitely exist. It is possible to get loans with a 24-87 month length, especially if the boat youre purchasing is in a lower pricing tier, such as in between $10,000 and $50,000.

    Ready To Secure Boat Financing

    Boat Loans Rate Calculator – For Your Monthly Boat Loan Costs

    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.

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    Factors That Effect Boat Financing Terms

    You need to be aware, however, that how long you finance a boat can also impact those other variables we mentioned earlier. If you double the term of a loan, for example, a lender is likely to want a slightly higher interest rate, or perhaps a down payment thats a higher percentage of the boats value. There are also some other factors a lender may take into consideration when determining just how long a loan term theyll be willing to consider. These commonly include:

    • The size of the loan
    • The type of boat
    • The age of the boat, if its used

    Boat Loan Size

    Loan size has an important impact on how long a lender will be willing to stretch the loan. As a general rule of thumb, the larger the loan is the longer it can be financed. Many lenders will have minimum loan amounts for different specific term periods.

    Type of Boat

    Most modern powerboats can be lumped together, but there are some outliers that financers will treat differently.

    • Boats with wood hulls, for example, or high performance boats, may be treated differently.
    • Some lenders differentiate between sailboats and powerboats in general, and some consider multi-hull boats or pontoon boats differently.
    • One big issue that arises from time to time is with liveaboards. Because of the laws regarding residences, home ownership, and home ownership escrow accounts, loans for liveaboards are treated very differently than common boat loans and some lenders wont make them at all.

    Used Boat Age

    Should You Buy A Boat

    To determine if boat ownership is right for you, you should first identify what kind of boat would suit your lifestyle best. Also, determine how often youll use it and how you will store and maintain it. Consider a few things, first:

    Frequency of Use: How much will you actually use a boat? Do you currently hit the water just a few times a year, or are you there as often as possible? Do you enjoy or miss any water activities like fishing, tubing, or water skiing that a boat would allow you to enjoy on a deeper level? If not, or if you only go to the water a few times a year, you may want to consider renting or borrowing a boat instead.

    Type of Use: What kind of boat are you looking to buy? Do you want a pontoon that can host a party of people? Or are you considering a fishing boat that can go out over open water? A boats utility will often determine how much and how often youll use it, but the type of boat you want to purchase will also dictate the costs you might incur.

    Maintenance and Storage: Storing a boat in the off-season can require a bit of effort and generate some additional costs are you ready for them? Depending on what kind of boat you choose, you might need an extra garage, an all-weather boat cover, or a private slip. These add-ons can be expensive, and each would factor into whether you will be able to care for a boat after you buy one.

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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.

    Where To Get A Boat Loan

    Sea Ray 18.5 Ft with 250HP Inboard and Trailer.

    Online loans

    Online lenders typically offer unsecured boat loans only. These lenders may be able to approve and fund loans more quickly than other lenders. Online lenders also offer pre-qualification, which shows you what loan amount and rate you could get without affecting your credit.

    Some tailor their loan products to borrowers with good or excellent credit , while others accept lower credit scores and focus more on factors like your monthly cash flow, education and where you work.

    Bank loans

    Youre more likely to find secured loans from banks. Banks may sometimes offer perks to existing customers, like discounts and favorable loan terms. If your bank offers boat loans, it may be a good place to start.

    Navy Federal and First Tech both offer boat loans with 15-year repayment terms with rates starting below 10%.

    loans from marine lending specialists

    Boat loans from marine lenders have similar rates and repayment terms to personal loans. One advantage might be the ability to work with a specialist who understands the boating business, according to the National Marine Lenders Association.

    These loans must be secured by the boat and require down payments from 10% to 20% of the purchase price. A bank may require a down payment or make it optional.

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    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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    Other Items To Consider

    Lenders will require you to have insurance on the boat in order to get approved for financing. Also if looking into extended and enhanced warranties to cover various operational breakdowns, lenders will often permit you to roll the cost of such a warranty into the loan. The reason is simple: the bank loves that youre protecting and taking care of the asset involved in the loan.

    When financing a larger boat, note that your experience can indeed come into play in the lending approval. If youve never operated a boat near the size of boat in which youre purchasing, a lender may be concerned about whether or not you can properly manage and captain such a vessel.

    Lastly, lenders may want to know where you plan to store the boat.

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    Marine Financing 101 – What to know before financing your next new or used saltwater boat

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    So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.

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    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.

    How To Choose The Right Boat

    First-time buyers can be intimidated by the selection process, especially without clearly defined expectations. In order to make an appropriate choice, it pays to answer a few questions before locking-in a particular craft. What is your primary use for the boat? Will the boat be docked in the water during the season, or trailered to destinations for each outing? How many people typically embark on your boating ventures? And, more fundamentally, is the boat to be used primarily on inland lakes, rivers, or oceans?

    There are dozens of available boat styles, each aimed at particular functions. By dialing-in your requirements, it becomes easier to wade through various options, a few of which include the following boat classes.


    Wind-powered vessels conjure romanticized visions, pairing Mother Nature’s forces with deft maritime manipulation. But while the sentimental pastime is indeed boating’s purest form, it requires a high level of skill to carry-off without incident. Unless you are an experienced sailor, or plan to secure the needed knowledge, a sailboat is probably not your best investment. Small, learning sail crafts, on the other hand, may help instill the basics, without putting you at risk.

    Fishing Boats

    Pontoon Boats


    Ski Boats

    Luxury Yachts

    These are only a few of the dedicated boat varieties available.

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