If you’re purchasing a boat with the help of a lender, boat financing is essential. Similar to other big-ticket items, it involves various considerations and questions. From understanding boat financing rates and terms to knowing how payments work, we’re here to help answer all your queries and guide you through the process.
How to finance a boat
When it comes to financing a boat, you’ll have a few options to choose from. Depending on the dealer you are buying the boat from, you may be able to secure a loan through them. This has some advantages, similar to purchasing a car with a loan from the dealership. They usually have their own financial manager onsite, will have loans designed and built for boats and sometimes offer more competitive rates and terms than getting your loan from a bank.
This may not always be the case, so it’s always a good idea to shop around to see what options are available to you before taking the plunge. A few items your lender may request in order to approve you are:
- Loan application
- Income proof – possibly through tax returns
- Financial statement
- Details on the boat you are purchasing
How long can you finance a boat for?
Most boat finance terms will be for a term of 10, 15 or 20 years. As boating has become more popular and their seaworthiness has become greater, lenders are open to more flexible terms. Once upon a time, it was harder to get a longer term boat loan since lenders weren’t convinced that they’d get their loan paid off before the boat had lost its value so they wouldn’t have any collateral should the owner default on the loan.
How long can you finance a new boat?
The terms for financing a new boat are similar to all boats – usually up to a maximum of 20 years.
How long can you finance a used boat?
Used financing rates and terms are similar to new boats, in that they are usually offered for a term of 10 – 20 years.
Can you finance a boat for 30 years?
It’s very uncommon to see boat financing terms of up to 30 years – most will have a maximum loan term of 20 years.
Is it hard to finance a boat?
It’s never been easier to finance a boat. Most lenders have learned that boat owners are usually diligent on their loan repayments and with interest in boat ownership growing every day, it’s a great business model for them. Depending on your loan application and the year of the boat, it can sometimes be easier to secure a loan for boats less than five years old, but that doesn’t mean they do not offer loans to older models – you may just be able to secure better financing terms on newer boats.
Who will finance a boat with bad credit?
While it will be harder to finance a boat with bad credit, it’s not impossible. Many private lenders will offer loans to those with bad credit that were denied a loan from elsewhere. Depending on your credit score and the amount requested, private lenders may require collateral, or only be able to offer a higher interest rate than others.
What credit score do you need to finance a boat?
While every lender will have a different threshold, it’s generally accepted that most boat lenders will happily offer you a loan with a credit score of around 650.
Is it harder to finance a boat than a car?
It can be a little harder to finance a boat than a car, and here’s why. Partially due to the sheer number of cars on the road and the need for automotive loans, and also due to the length of ownership. People tend to upgrade and grow out of their cars at a much quicker rate than boats, so car loans are usually for smaller terms, with lower interest rates and smaller amounts to borrow. As such, there are a number of competitive lenders available for your next car. Boat loans don’t have the same guarantee of resale value as a car – while they both depreciate, cars will always have a demand, while boats are more of a niche market.
Boat Payments
How to finance a liveaboard boat?
It can sometimes be harder to finance a liveaboard boat since you don’t have the collateral that you would if you were securing a mortgage. Boats don’t maintain their resale value like a home so if you default on the boat loan payments, the bank will usually lose money. So, while it may be harder to secure financing for your liveaboard boat, it isn’t impossible. Like those with bad credit looking to finance a boat, you will usually be able to find the right lender to help bring your liveaboard dreams to life.
For more information on what it’s like to live aboard full-time, please refer to this article.
How to finance a yacht?
Financing a yacht will be no different from financing a boat. Your loan request may be larger, but you will usually have similar terms and requirements. You may go through a regular bank, lenders who specialize in marine loans, or even go directly through your boat dealer and their finance department.
Before you start the process, find out how much boat you can afford.
Do boat dealers or yacht brokers offer financing?
Boat dealers commonly offer financing for boat, while yacht brokers do not. Yacht brokers can, however, help refer you to some reputable lenders should you be on the lookout for quotes. Click here to find a trusted yacht broker near you for more information.
Read this informative article to discover the key to selecting your ideal yacht broker.
What is the monthly payment of a $300,000 boat?
The exact monthly payment on a $300,000 boat will depend on various factors:
- How much down payment you made
- Your credit score
- The interest rate secured
- Your loan repayment terms
To give some perspective, let’s say you put 10% down on the boat, so you still owe $270,000. If we go for an average interest rate of 6.5% and a 20-year term, you will be looking at a monthly payment of around $2,000.
What is the average boat finance term?
Most boat financing terms will be for around 10 – 20 years.
Are boats worth the investment?
Boats are not typically assets that appreciate in value. More often than not (as in almost 100 percent of the time), you will lose money when you go to sell your boat – you will sell it for less than you paid. However, that doesn’t mean that boats are a “bad” investment. Boats give you freedom to explore the world around you, on your own terms. Boats create memories to last a lifetime for you and your guests. Boats can be the stress reliever you need to escape your day job or life stressors. Boats can actually give you the gift of time — time onboard with family and friends; time discovering untouched lands; time spent catching the biggest fish of your life; or time spent floating under the hot summer sun.
So, while boats might not carry the best financial return on their investment, they do exceed expectations on memories made and experiences available.
Boat Dock Financing & Boat Slip Financing
Can you finance a boat dock?
Yes, you can finance a boat dock. If the dock is at your house, you can usually wrap this up into your mortgage.
How to finance a boat dock?
Financing a boat dock will be similar to other items you need to borrow money for. Usually, you will apply for this loan under your mortgage, or as a home improvement loan. It will not usually be part of your boat loan.
Can you finance a boat slip?
You can finance a boat slip; however, this is certainly a less common request for lenders. Boat slips are usually much larger than a personal boat dock and are often used as an investment for buyers to then rent out space on the slip.
How to finance a boat slip?
Boat slip financing will be similar to other loans you are hoping to secure. You can shop around from various lenders to see the rates and terms they have available based on your credit history.
Boat Title
What is a boat title loan?
A boat title loan is where you put your boat up for collateral when you need cash for a short-term loan.
All this means if you default on your loan repayments, the bank or lender can take your boat as a means of payment.
Can you get a title loan on a boat?
Yes, you can get a title loan on a boat provided the lender you are working with has this option available.
Getting a boat loan doesn’t have to be a stressful experience. As the interest in boating and yachting grows, these boat loans become more commonplace across a number of lenders. We have a wide variety of other in-depth guides for boat lovers: learn about right of way rules on the water, or what it’s like boating in the superyacht capital of the world in Florida.
YATCO Boating and Fishing Guides
- Types of Fish in Florida Guide: We’ve seen a number of fish that call Florida home and make this a bucket list fishing destination for many anglers in the world. If you’re wondering what fish are in season when or what types of fish can be found in a number of destinations across Florida, YATCO has a guide for that. For a complete run down on all the types of fish you can catch in Florida, check out YATCO’s guide.
- Sport Fishing Yacht Guide: Many recreational fishers will choose to use the best yacht for the job when it comes to fishing. And you can’t go wrong with a sportfishing yacht – specifically designed to hold all of your fishing gear, optimize space for maneuvering, and the power and stability to take you wherever the fish are. Explore YATCO’s Sportfishing Yacht Buying Guide.
- Flybridge Yacht Guide: Similar to the sport fishing yachts, flybridge yachts are also popular amongst anglers, thanks to their upper decks which offer the perfect height to explore the horizons and scan for fish activity. Learn more about flybridge yachts in our guide.
- Florida Deep Sea Fishing Florida: Deep sea fishing is a special type of fishing in which anglers head out to the depths of the ocean to pull out some really large game fish. You’ll want to look for water at least 100ft in depth, where you can discover fish like 1,000-pound marlin or hooking a big tuna! Learn more in YATCO’s Deep Sea Fishing Guide 2023.
- Boating in Florida Guide: Before you head out on the water for your next big catch of the day, it’s important to familiarize yourself with the rules of the water in Florida. Whether you are a resident, or someone looking to visit and do some fishing, you’ll want to be sure to heed the ways of the water. YATCO created a Boating in Florida Guide for this very reason.
- Boat Maintenance Guide: Now you know the boat you want, it’s important to learn how to maintain it as well. There are a number of factors to consider when it comes to improving the longevity and overall look and feel of your boat or yacht. Learn the proper ways to keep your vessel in good shape with YATCO’s Boat Maintenance Guide.
- Boating the Right of Way Guide: Just as we need to learn the rules of the road when we head out in our car, it’s important to learn the rules of the water as well. Whether you are a seasoned sailor, or new to boating, YATCO created a Boating Right of Way Guide to better understand some of the rules and buoys or signage you may come across on the water.
- Boat Insurance Guide: While certain states (including Florida) and countries around the world may not make boat insurance compulsory or a legal requirement before heading out on the water, it’s still a prudent idea to secure boat insurance before slipping off the dock. Learn more about the importance of boat insurance with our guide.
Explore a full list of our detailed yacht and boat FAQ articles here.
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