Best Boat Loans of November 2024

Ready to set sail? If you’re in the market for a boat but don’t have the funds, a boat loan may be an option. Depending on the type of boat, you could spend anywhere from $15,000 up to $500,000 or more, according to the National Boat Owners Association

Boat loans aren’t any one particular type of loan. You could use a personal loan, the equity in your home, or dealer financing to buy a boat. Some personal loan lenders offer loans up to $100,000 or more, making them a flexible option, especially for used boat loans. You might also consider utilizing the equity in your home, or see what financing options are available with an authorized boat dealer.

Compare boat loan rates of November 2024

Methodology

Credible evaluated the best boat loans based on customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, and whether cosigners are accepted. Credible’s team of experts gathered information from each lender’s website, customer service department, in-house resources, and via email support. Each data point was verified by a third party to make sure it was accurate at the time of publication.

Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.

How to compare boat loans

Buying a boat can be a significant and years-long investment. As such, it’s important to compare features across loans and loan types. Start with the following:

• Eligibility requirements: Aside from the basic qualifications for a loan (such as credit score, income, etc.), some lenders will also assess the age, value, and condition of the boat before financing it.
• Used boat restrictions: Some lenders may not allow used boat loans, as they can be considered more risky due to age. Find a lender who can finance the boat you want, whether it’s used or new.
• Loan amounts: Depending on the lender and type of loan, you can find loan amounts ranging from less than $25,000 to well into the millions. The right lender can offer the loan amount you need for your new or used boat.
• Collateral: Boat loans are often secured by collateral, such as your boat (or home if you use home equity). Secured loans often have lower interest rates, but the lender can take your collateral if you default.
• APR: The annual percentage rate (APR) accounts for the loan’s interest rate and any upfront fees. The APR is a useful tool for comparing loans as opposed to relying on interest rate alone. APRs for boat loans can range as low as around 7%.
• Repayment terms: You can find varying repayment terms from different lenders, but the standard range for secured boat loans is between 10 to 20 years. Repayment terms for unsecured personal loans typically top out at 7 years, but some personal loan lenders offer up to 12-year repayment terms for boat loans.
• Fees: Expect origination fees with some lenders, especially if you have bad credit. Fees vary, but personal loans may charge an origination fee up 12% of the loan amount.
• Time to fund: Once you’re approved for a personal loan, you could receive the money to buy it as soon as the same or next business day. Loans that use your home's equity could take a month or more to process, but may also be relatively fast once approved. 
• Customer reviews: Read up on customer reviews for different lenders to get a sense of their customer service and reputation. Trustpilot and Better Business Bureau (BBB) are good websites to check out.

Learn More: What Is the Difference Between APR and Interest Rates?

How does a boat loan work?

When you take out a boat loan, you’ll receive the funds in a lump sum upfront to purchase the boat, or you’ll take delivery of the boat if you finance through a dealer. You’ll then begin making monthly payments for the duration of the repayment term — both the payment amount and interest rate are typically fixed, meaning they won’t change. Some boat loans have repayment terms up to 20 years, while some personal loans have repayment terms up to 12 years for boat financing.

To qualify for a boat loan, you’ll ideally have a good to excellent credit score (some specialized boat lenders may have a lower minimum), and a debt-to-income ratio (DTI) that's 35% or less. You'll also need to provide proof that you can afford payments, which generally means steady employment with sufficient income. Specialized boat lenders and dealers often require a down payment of 10% to 20% of the cost of the boat and typically evaluate the age, value, and condition before financing, especially if it’s used. Appraisals aren’t generally required for an unsecured personal loan.

Boat loans can be secured or unsecured. While each type of loan can be used to buy a boat, their mechanics are a little different.

• Secured loans: Banks, financing companies, and boat dealers typically offer secured loans. If you finance a boat purchase with home equity, your home would serve as collateral for the loan. Secured loans tend to have lower interest rates than unsecured loans. But if you default on the loan, you could lose your collateral.
• Unsecured loans: Unsecured loans like personal loans can be more expensive than secured loans because they typically have higher APRs. But they can be a better choice if you don’t want to deal with an appraisal or down payment. The interest rate you qualify for is based primarily on your credit profile — if you have good to excellent credit, you may qualify for a low APR, especially if you have a low DTI and a strong income. Unsecured personal loans are available from online lenders, banks, and credit unions.

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Used boat financing

Requirements for used boats are usually more strict than for new ones, and not all lenders offer used boat financing. Specialized boat loan lenders will scrutinize the age of your boat, and may not fund one above a certain age. For example, Trident Funding may give you a used boat loan as long as your boat is 20 years old or newer.

It’s best to consult a certified professional marine surveyor for an inspection, as many specialized lenders won’t finance a boat otherwise. Additionally, insurance companies may not provide coverage on a boat that hasn’t been surveyed. A professional marine surveyor can also lend insight into any underlying issues and give you confidence in your buying decision.

Pre-owned boats may require more maintenance, so consider the history of the boat before financing it. If you’d rather have peace of mind, some boat dealers offer extended warranty options with your purchase.

How long is a boat loan?

Dealers and other specialized lenders typically offer 10- to 20-year repayment terms for a secured boat loan. If you get an unsecured loan, repayment terms may be available up to seven or 12 years, depending on the lender. Several factors can influence the length, such as:

• The age of the boat: This factor typically only applies to used boats. As mentioned, most lenders have a requirement for the age of the boat. Some may also have higher minimum loan amounts and rates based on age.
• Loan amount: If you have a larger loan amount, you may be eligible for a longer repayment period.
• Type of boat: Depending on the materials and features of the boat, you can expect a lender to appraise it differently, which can impact the boat's value and loan amount. For example, a small sailboat would likely have a shorter loan term relative to a yacht.

Pros and cons of a boat loan

Consider the benefits and drawbacks of getting a boat loan.

Pros

• Fast funding: With many lenders, you can expect to receive your funds or take delivery of the boat the same day or within days of applying.
• Long repayment terms available: A longer repayment term gives you lower monthly payments relative to a shorter repayment term for the same loan amount.
• Lower APRs with secured loans: If your loan is secured, the lender takes on less risk and is generally willing to offer a lower APR.
• Can finance a new or used boat: Many lenders offer boat loans for new boats, but you may have to do some digging to find a specialized lender offering used boat loans. However, unsecured personal loans don’t require appraisals and can be a good option for used boat loans.

Cons

• Could pay more in interest: While longer repayment terms give you more time to pay off the loan, you will likely pay more in interest, especially if you have a higher APR.
• Down payment required: Some secured boat loans require a down payment of 10% to 20% of the boat’s purchase price.
• Higher APRs with unsecured loans: Without collateral involved, a lender takes on more risk. The lender passes that onto you in the form of a higher APR, which means a higher-cost loan.
• Risk of losing collateral: While a secured loan can net you a lower APR, the risk passes onto you, so if you default, you could lose your collateral.
• More limitations for used boat financing: Some lenders have strict requirements for used boats. You'll likely need to get a used boat professionally inspected by a marine surveyor before a specialized lender will provide the funds. You may be able to get an unsecured personal loan without getting an inspection, but foregoing a used boat inspection is not recommended.

How to get a boat loan

Here are the steps to get a boat loan.

1. Check your credit: Before taking out any type of loan, check your credit report for any errors. You can visit AnnualCreditReport.com for a free credit report, and examine it for potential inaccuracies. Fixing mistakes can sometimes boost your credit score.
2. Choose your boat type: Do you want to get a sailboat to sail the high seas or are you planning a fishing expedition to catch the largest trout? The type of boat can determine a lender’s decision or impact your rate, so determine what you’re looking for first.
3. New or used: Many lenders offer loans for new boats and they’re widely available, whereas used boat loans aren’t as common. You may face additional hurdles to get a used boat funded.
4. Save for a down payment: With secured boat loans, you typically must provide a down payment equal to 10% to 20% of the boat’s retail price. This will affect the cost of the loan and how much your monthly payment will be. 
5. Compare lenders: When shopping around, compare the APR, loan amount, repayment period, and time to fund with different lenders. You may also be able to prequalify to see your rates before applying.
6. Prequalify: Prequalifying with multiple lenders won’t impact your credit. But it should be noted that prequalification doesn’t mean you’ll get the loan (and it might not be available for all types of boat loans). Your final rate may also differ after you apply.
7. Apply for a loan: Fill out the application and submit. Once you formally apply, the lender will perform a hard credit pull, which will ding your credit temporarily. You may also have to submit additional documentation, such as W-2s, pay stubs, or bank statements, to prove you can afford payments.
8. Buy your boat: Once your loan is approved, review the loan documents and sign if the terms are acceptable. Some lenders can fund your purchase as soon as the same or next business day. Some can take up to a week.

Learn More: How To Get a Personal Loan

Bad-credit boat loans

While it may be possible to get a boat loan with bad credit, you will typically pay a higher APR. Try one or more of these strategies to get your boat loan approved.

• Secured loan: An unsecured personal loan might be tough to get approved for with bad credit. Instead, you may want to go for a loan that requires collateral, like the boat itself or home equity.
• Get a cosigner: A cosigner is someone who is jointly responsible for the loan with you and agrees to make payments if you default. This takes some risk off the lender, which can help you get approved or get a better rate. But it could jeopardize your relationship with your cosigner if you make late payments (as these can hurt their credit) or are unable to repay the loan.
• Add a co-borrower: A co-borrower also signs the loan with you, but unlike a cosigner, they have equal access to the funds.
• Lower your loan amount: If a higher loan amount for a more expensive boat is beyond your reach, consider lowering your amount for a less expensive boat.
• Research bad-credit boat loan lenders: You can find boat loan lenders that specialize in lending to those with bad credit. For example, SeaDream may finance loans up to $100,000 with interest rates from 9.95% to 17.99% for bad-credit-borrowers, while Southeast Financial has a specific program geared toward bad-credit borrowers.

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Boat loans FAQ

Can you use a personal loan to buy a boat?

Yes, you can get an unsecured personal loan from a traditional online lender, bank, or credit union to buy a boat. These loans are available for loan amounts ranging from less than $1,000 to $200,000, depending on the lender. You can get terms up to seven years and the average interest rate for a 24-month personal loan was 12.33%, according to Federal Reserve data. However, you may receive better rates and terms with a specific boat lender or authorized boat dealer.

Can you refinance a boat loan?

Yes, it is possible to refinance your boat. You may have the option of doing so even before your current repayment period ends. When you refinance your current boat loan, the new loan will pay it off. You might want to refinance for a lower APR, to remove a co-borrower, or to change your monthly payment.