Finance Options For Your Boat
The process of how to finance a boat and the tips to finance a boat are the same, regardless of which type of loan or financing option you choose. However, that doesnt mean the information on these financing options is irrelevant. Choosing a loan type is part of the process, and its important to know whats available. Here are a few of the most common loans for boats, along with some background information.
Boat Loans: Best Ways To Finance A Boat
When looking to finance a boat purchase, it’s important to understand the ins and outs of boat loans and using a boat loan calculatorand how to get a loan through financial institutions likes Wells Fargo, USAA, and Chase.
Cheap fuel, low interest rates, tons of new boat models and lots of lenders add up to this being just about the perfect time to buy a boat. These days, borrowing is increasingly necessary too as boats have grown bigger and more expensive. The average new boat loan today is over $200,000, so theres been an uptick in larger loans. That said, smaller loans are also getting attention since national and local banks, financial services firms and credit unions have returned to marine lending after the recession. It may be time to dive in and get that dream boat.
Do Boat Manufacturers Offer Financing
Some boat manufacturers may offer financing or partner with a trusted lender that can offer financing. Similarly, boat retailers may offer in-house financing or partner with outside lenders. Most boat loans are secured loans that use the boat as collateral. If you default on a boat loan they can repossess the boat. Since boat loans are secured loans based on the value of an asset, you usually cannot borrow much more than the boat is worth. Therefore, if you want to finance a boat and a boat dock youll most likely need two separate loans. Financing a boat can be compared to financing a vehicle. While the processes may be similar, the restrictions may vary. For example, you may be able to secure more than one car loan at a time if you have a good credit score. However, if you are still making payments on a current boat loan, it will be nearly impossible to get another boat loan. Youll most likely need to trade in or pay off the current boat loan before securing a new loan.
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Who Has The Best Boat Financing
The lender with the best boat financing can vary depending on the borrower. If you have excellent credit, you can probably obtain competitive boat financing from multiple lenders. However, if you have credit challenges you may have to shop around a bit more. LightStream, an Acorn Finance lending partner, is one of the best boat loan lenders for quick funding.
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How Did We Choose The Best Boat Loans
Personal Finance Insider’s goal is to help smart people make the best decisions with their money. We combed through the fine print of many boat loans and lenders so that you don’t have to. We considered the factors that are the most important to boaters, including:
- The type of boats financed: We searched for lenders that offered loans for the most shapes and sizes of boats, from houseboats to sport boats.
- Interest rates: We compared the starting points of interest rates from many banks, and compared ranges where available.
- Few or no fees: We looked for lenders that offered boat loans with the fewest amount of fees on each loan.
- Loan amounts: We chose lenders with the widest variety of loan amounts available to help everyone find a loan for their boat-buying budget.
- Widespread availability: Lenders we considered have loans available in almost all 50 states, if not all.
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 previewed, 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.
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How To Find Your Best Boat Loan Rates
When it comes to finding a quality boat loan rate, it pays to shop around. The terms for boat loans can be quite different between lenders. The only true way to know who can give you your best rate for your specific type of boat is to compare multiple offers. If youre looking for a fast and easy way to compare boat loan offers, you could fill out a single online form at LendingTree and receive offers from up to five different lenders, depending on your creditworthiness.
To guide your research, you should determine your top priority for the boat loan. Are you looking for the lowest possible interest rate? A longer loan term? A loan with a smaller down payment? This could influence the type of lender you choose.
If you plan on using the boat for a few years, you might care more about a quick application process than the interest rate. But if you want to keep your boat for 20 years, controlling borrowing costs may be more important. If you arent sure what you want, this calculator lets you experiment with different boat loan terms to see how your payment would change.
How To Get A Boat Loan
Whether you’re buying a house, a car or a boat, lenders look for stability and consistency in your employment history, income, and assets.
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How Do Boat Loans Work
Boat loans function similarly to auto loans or mortgage loans that you may have gotten before. Here’s how the process works:
- Find the boat before you start looking for financing. Many lenders ask for information about the boat in the financing application, so you’ll need to know exactly what you want to buy.
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You’ll need to have good credit. Most of the lenders we looked at for this roundup required a credit score of 700 or above.
- You may be asked for a marine survey. You may be asked to have a marine survey completed to ensure the boat is in proper functioning order during your purchase process. According to the National Marine Manufacturers Association, the typical marine survey will cost between $20 and $25 per foot. This is most commonly required for people buying a used boat.
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Expect to make a down payment. Like with a home or a car loan, you’ll likely need to make a down payment for your boat loan. The percentage requirement varies by lender and the amount you’re financing, but it’s generally between 10% and 20%.
Best Marine Lending Specialist: Trident Funding
Trident Funding
Why We Chose It: Our choice for the best marine lending specialist is Trident Funding because they offer competitive rates, specialize in custom marine financing, and have been in business since 1996.
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Dont finance boats more than 25 years old
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Dont finance live-aboard vessels
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You usually need a down payment
Trident Funding was founded by boat enthusiasts for boat enthusiasts with the goal of connecting borrowers to lenders so they can finance their passion. It is the U.S.s largest independently owned boat and yacht loan origination company. Trident also finances RVs and provides marine resources and tips on its website.
The company understands the boating business so can help educate you if this is your first boat. It has worked with over 40 banks and lenders so can rate shop to offer the most competitive rates and terms which vary based on the type of vessel, down payment amount, loan type, and borrower qualifications.
They offer fixed and variable rates starting at 4% and both short and long term boat loans up to 25 years. Typically, they approve loans within 48 hours and a down payment of 1020% is standard. They finance new and used boats that are no older than 25 years and only used for recreational purposes.
Trident Funding has positive customer service reviews and a solid industry reputation. Customers raved about the excellent service, timely responses, and marine industry knowledge.
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The Best Boat Loans Of September 2021
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*With auto-pay discount
The best boat loan depends on your budget, the type of boat you’re purchasing, and the age of the boat. From financing for small ski boats to full-size yachts, there’s a loan out there for most things that float. But they’re not all the same.
Once you’ve narrowed down the type of boat you’re interested in buying and what model year you’re looking for, you can start shopping for a boat loan. Many lenders will only finance certain types of boats, or require a boat to be newer than a certain model year. To make sure you make the most of your shopping, know this going into it.
There aren’t as many lenders offering boat loans as there are auto loans. But there are still a few to choose from.
Popular Articles
Here are Insider’s top picks for boat loans in September 2021.
Types of boats financed: LightStream doesn’t list any specific requirements
4.29% to 10.39% APR, with auto pay discount
Loan amounts available: $5,000 to $100,000
Watch out for: High credit score requirements. LightStream only works with borrowers with good or better credit, so anyone with a low credit score may not qualify.
LightStream boat loans are a strong option for most borrowers looking for an inexpensive boat and fast funding.
LightStream is an online lender backed by Truist . With a completely online experience, same-day funding available, and many loan types offered, LightStream is one of our picks for the best RV loans and best personal loans.
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.
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Can I Use A Personal Loan Instead Of A Boat Loan
You can get your money faster without collateral and a down payment by applying for an unsecured personal loan. Generally, you need good credit and an income over $24,000 a year to qualify.
These come with similar rates as boat loans, though loan amounts usually max out around $100,000 and terms dont run longer than seven years.
Keep in mind that not every personal loan provider will allow you to use your funds to purchase a boat. Be clear when submitting your application that you intend on financing a boat to avoid a surprise rejection.
Are secured loans an option for a boat?
If you cant qualify for a loan without collateral, consider backing it with another asset like your home by taking out a secured loan. Typically, secured loans have lower APRs than unsecured loans and easier-to-meet requirements.
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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Factors To Consider When Choosing A Boat And Marine Loan
As fun as it can be to own a boat or other watercraft, its also important to understand that a loan is a significant financial obligation and must be handled responsibly in order to avoid any debt-related problems.
So, prior to applying for any form of boat or marine vehicle financing, there are several factors that you should consider, such as:
The Down Payment One way of receiving good loan conditions and paying down your debt faster is to offer a respectable down payment of 10% 20% of the vehicles total cost. Depending on the asking price, that down payment can be beyond your budget, especially when coupled with your future payments.
The Interest Rate Your interest rate can make your payments more pricey than you were expecting. Remember, the best way to receive an affordable rate is to apply with healthy finances or some collateral. You may also be able to choose a fixed rate or a variable rate .
The Length of Your Loan/Term Larger boat and marine loans are often separated into several terms, so you may be in debt for a number of years. Being unable to afford your installments during that time, for whatever reason, could lead to financial damage, so if the loan terms your lender offers seem too long, you may have to look elsewhere.
How To Find The Best Boat Loan Rates
Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
When youre shopping for a boat, your focus might be on the size, year and model of your new watercraft. But before you start seeing whats out there, consider figuring out your boat loan first. While financing is available, qualifying for decent terms can take some research and preparation.
Whether youre buying your very first boat or are an experienced sailor, this guide will help you find your best rates for your upcoming loan. Weve analyzed the different options available and asked for tips from experts at the National Marine Lending Association and the Boat Owners Association of the United States , a national advocacy group for recreational boaters that also offers services such as boat loans, insurance and towing for boats stuck on the water.
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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.
