Get up to $40,000 in 2 minutes   Compare Loan Rates
Christine Tait

Last updated: 8/2019

Find the Best Personal Loan for Your Needs

If you’re in the market for a new boat, you’re probably trying to consider the different options you have for financing it. It’s rare that people can purchase a boat outright, so obtaining finance is typically the obvious option. But finding a boat loan can be difficult – lenders don’t enjoy taking risks on certain luxury goods. If you’ve noticed that you’re not having much success finding a boat loan, you might be approaching the process in the wrong way.
Boat Loans – Alternative Lending Options

In this article, we take a more in-depth look at boat financing to help you better understand your options when it comes to purchasing a new or used boat. We offer advice on ways that you can navigate around traditional problems you may find when you’re looking for a new boat loan. If you’re in the market for a new boat, make sure to read all the information on this page.

Navigate

Obtaining a Boat Loan Can be Difficult

If you’ve been researching boat loans for a while, you probably already know how difficult it can be to obtain a boat loan. Lenders can be a bit testy when it comes to lending money for boats – there are a few reasons behind this. In this section of the article, we’re going to take a look at what might prevent you from getting a boat loan.

Used Boat Inspections

If you’re purchasing a used boat, it can be tough to get a used boat loan. This comes down to the fact that boat lenders want to be sure you’re not investing in a boat that is broken or has unknown faults. If you end up defaulting on the loan, and your boat has defects, the bank might not be able to get their money back.

If you are purchasing a used boat, there’s a high chance the bank will want you to pay for someone to inspect it. This makes the process much longer and also adds costs to your financing.

Large Upkeep

Another reason that lenders seem to want to shy away from boat loans comes down to the fact that boats take a lot to maintain. New boat owners don’t often realize the amount of money they will have to pour into maintaining their new boat. Also, when people begin to struggle financially, the last thing they spend money maintaining is the luxury goods they own. People who are struggling financially are much more likely to spend money on their home or cars.

This means that a boat may go into disrepair, or a boat owner may underestimate how expensive the boat upkeep is. This all poses a significant risk to lenders who are trying to lend money to boat owners.

Alternative Boat Loans Methods

The best way to make sure you get financing for your boat is to get creative. You don’t want to approach obtaining a boat loan the wrong way if you’re going to be successful. The more loans you apply for, the more inquiries that will be recorded on your credit report – you want to keep your loan applications to a minimum.

Unsecured Personal Loans

One of the best ways to finance a boat is to use an unsecured personal loan. This means that you obtain a loan where the financing isn’t tied directly to one of your assets. The brilliant thing about unsecured personal loans is that they can be used for anything – the bank doesn’t need to approve your purchase. They simply provide you with the money, and you are free to spend it how you like. To purchase a boat using an unsecured loan, you apply for a personal loan and then use the capital to acquire the boat separately.

There are plenty of online lenders that now provide unsecured loans, so you don’t have to use a bank to obtain this sort of financing. In fact these alternative lenders can offer fast loans and if you have a decent credit score, the whole process can take a matter of minutes if you choose the right lender.

Secured Personal Loan

If you want to reduce your interest rates, you can also obtain a secured personal loan. This is the same as a personal loan, but it is tied to one of your assets. If you default on the loan, the lender has the right to seize your asset to satisfy the payments. This is riskier, but it also means your fees will be lower. You don’t have to secure the loan against the boat if you want to avoid inspections. You could secure the loan against the value of your home if you don’t want to deal with questions about the boat you’re purchasing. Just make sure that you can afford the payments – you don’t want to end up losing your home because you can’t afford your new purchase!

Credit Cards

If you have a large credit limit on your credit card, you might have enough available credit to purchase a boat outright. While some boat providers will not want to incur the commission fees that come with credit card transactions, others will be happy to allow you to pay by credit card. This can be a good option if you don’t want to secure your boat financing, but it also comes with its disadvantages. At the end of the day, credit card interest rates are enormous compared to personal loans, so it’s not an excellent choice if you want to keep down the cost of financing your boat.

Also, if you use too much of your available credit, you might reduce your credit score until you can pay it off.

Verdict

As you can see, there are plenty of ways to obtain a boat loan without having to follow the traditional path. If you want to avoid some of the hurdles you may face with a conventional boat loan, consider the suggestions in this article.

If you’re interested in obtaining a personal loan, make sure to check out the other resources on our site for the best online loans. We have plenty of information on how to obtain a personal loan and certain lenders that you may want to consider. The internet has made obtaining personal loans a whole lot easier!

FAQ

General Information on Boat Loans and Used Boat Loans

Below, you will find the most essential information you must know about boat loans.

test
How long are boat loans?

Boat loans do not have a fixed term, so it would depend on your lender and the type of boat you loaned.

How do boat loans work?

A boat loan works in the same way as any secured loan – the boat is the collateral in case you default on it.

What is a typical boat loan term?

Most boat loans are for 10 years. However, shorter and longer terms are both available.

Is a boat loan tax deductible?

Not the entire amount, but the interest paid on it may be tax deductible for federal tax purposes.

What is a typical boat loan interest rate?

Depending on your credit rating and other factors, the interest rate for both loans are normally 3.89% to 7.49%.

How much is a boat loan?

There’s no saying. The value of your both loan relies largely on the model of the boat you get as well as the terms of the loan.

Are boat loans simple interest?

Not all of them. Most lenders give you the option between fixed and variable interest.

Do boat loans include the sales tax?

In states where the sales tax must be included in the price, yes. Find out which applies to your state to know for sure.

Do boat loans have a deficiency clause?

Most of them don’t have a deficiency clause. Just to be sure, it is best to clarify this with your agent or lender.

Do boat loans require insurance?

Yes. Most of the time, if not all the time, lenders would require you to purchase insurance to protect your collateral.

Does the bank need boat title to give loan?

Yes, it is one of the most common requisites of the loan. The title will be given to you once the loan is fully paid.

How long are used boat loans?

While the data available does not separate the statistic for new and used boats, used boat loans are usually shorter.

How do used boat loans work?

In the same way as your regular boat loan, but with one added step – the used boat is inspected first for damages before your loan is approved.

Getting a Boat Loan

In this section, you will find out if it’s possible for you to get a boat loan and how you can do so.

test
How do I get a boat loan?

First, check the requirements of your prospect lender before applying. After that, the process is pretty much the same as an auto loan – you have the option to get the financing through banks, credit unions, and even dealerships.

How do I get a boat loan for private seller?

You’ll probably need a broker who can help you find the perfect boat as well as connect you with financing sources. But if you’d rather do it on your own, there are boat loan creditors that are open to finding used boat loans/

How do I get a boat loan with no credit?

Simply go to lenders that do not perform a credit check. You may also want to get a cosigner or pay a big down payment to improve your chances of approval.

How do I get a boat loan with poor credit?

Try to get a home equity loan to finance a part of your boat purchase. If you would rather keep your home value intact, explore the alternatives discussed in the article above.

Can I get a boat loan?

This is a question better left to creditors as they will be the one to assess your profile. However, you may be able to get some idea on whether or not you’d be approved by looking at their minimum requirements.

Can I get a boat loan with bad credit?

Possibly, but the odds aren’t really in your favor. However, you may try to improve your credit rating first before applying.

Can you get a 15-year boat loan?

Definitely. Even if you have an existing boat loan, you may be able to refinance it and extend the term to 15 years.

Can you get a 20-year boat loan?

Yes. However, the longer the loan is, the more you pay in interest. So, opt a shorter term if it’s fiscally viable.

Can you get a 30-year loan for a boat?

Yes. Unfortunately, not all lenders offer 30-year loans on boats.

Is it easy to get a boat loan?

If you have a stable income and an excellent credit score, then yes. How easy or hard it will be for you to get a boat loan will depend on your financial situation.

Are boat loans hard to get?

Again, it depends. But it is hardest to get one from banks as they usually require a 10 to 15% down payment.

Can you buy boats with student loans?

Yes. Even with student loans, it is possible for you to buy a boat. Improve your debt-to-income ratio and FICO score and make sure you don’t miss debt payments.

Can you get a house loan for a boat?

No. A house loan is reserved for purchase of a house, and lenders consider boat loans to be closer to auto loans.

Boat Loan Recommendations

In this section, you will find information on where you can get boat loans as well as whether this loan product is offered by certain lenders.

test
Where can I get a boat loan?

You have the option to get it from banks, credit unions, boat financing companies, and dealerships. Each has its own pros and cons, so you should weigh these carefully before deciding.

Where is the best place to get a boat loan?

Fund First Capital has listed a few highly-rated options that you can choose from. Most of these are banks, so it may not be applicable for you if you have a low credit score.

Who has the best boat loan rates?

As the lowest rate is reserved for borrowers with six-figure income and a stellar credit score, it is best to look around for the lowest rates for you instead. You may check out our site to have some idea on how much you could be approved for and at what rate.

Do banks have boat loans?

Yes. However, not all banks offer this loan product.

Do boat dealers finance loans?

Some dealerships have an in-house financial officer who can process everything, including your boat loan. However, those who don’t have a good relationship with a third-party lender they can refer you to.

Does Chase Bank do boat loans?

Unfortunately, Chase Bank does not offer boat loans anymore.

Does Bank of America do boat loans?

Yes. With Bank of America, you can be approved for as much as $150,000. Note, however, that their boat loans are not available nationwide. Ask your local branch first before applying.

Does Capital One do boat loans?

Through Capital One Maritime Lending Group, a business may be able to get a loan on maritime assets such as push boats, tank barges, and many more. Sadly, they don’t have a similar product for personal use.

Does Costco do boat loans?

While Costco used to offer boat loans through Essex Credit, they have since halted this service in September 2015.

Does Heartland Credit Union do boat loans?

Yes. Heartland Credit Union offers 100% financing to qualified borrowers and loan terms of up to 84 months.

Does LendingTree do boat loans?

No. However, you may use their site to compare and connect you to lenders that offer boat loans.

Does Nationwide do boat loans?

Yes. To access information on terms, cost, and application requirements, you may go to this link.

Does Navy Federal do boat loans?

Yes. Navy Federal offers boat loans of up to 180 months. They have also published rates on for both new and used boat loans depending on loan term here. A regular Navy Federal personal loan is also an option.

Other Concerns Related to Boat Loans

All other concerns that may be related to boat loans as well as questions related to dealing with it are in this section.

test
How do I sell a boat with a loan?

You can’t. You first have to pay the full amount before you can sell it because the title is with your lender.

Can I use my boat as collateral for a loan?

Yes. It’s even a better collateral than a car because it takes twice as long for it to depreciate.

Can you pay off boat loan early?

Most lenders don’t impose a pre-payment penalty, so you can pay off your boat loan early. However, if you’ll be early by a few years, ask your lender for a discount.

Can you transfer a boat loan to a new owner?

On your own, no. You have to seek the approval of your lender first before you would be able to do so.

Can a boat loan include a trailer?

If you get both from one dealership, you may be able to get a boat loan which includes the trailer. In other cases, it is usually two separate loans.

Christine has a solid background in personal finance as she spent the last eight years working at one of the biggest banks in the US. She managed her own team of financial advisors that helped hundreds of people with their financing needs. Her innate understanding of different financial products and loans helped her move up the ranks quickly after graduating with a degree in Business Administration.