How to find the best boat lender
Are you ready to break away from the landlubbers and set sail? If you’re in the market for a boat loan it’s wise to do a little research before you go shopping. While your vessel acts as the collateral securing the loan, specific rates, terms and loan conditions vary across lenders.
The first thing to do is determine what kind of boating you want to do. Do you prefer days of calm fishing on the lake, taking the family out wakeboarding or long weekend sailing trips? Would you use it enough to justify owning or would renting a couple times a year suffice? Is the vessel for play, work or full-time living?
Once you answer those questions, the next step is to check your budget and then find the best boat lenders to compare rates and terms.
680 or higher
5 to 20 years
10% to 20%
2 to 4 business days
Boat prices vary greatly, ranging from a few hundred dollars for a little dinghy to a few million for a slick yacht. When calculating your boat budget, account for the ongoing costs of boat ownership. These costs vary depending on the type of boat you get as well as your location, and include:
Another consideration to boat buying is whether to purchase a new or used vessel. There are pros and cons for either.
The best lender for you depends on the type of vessel and amount of money you’re looking to finance. Shop around and compare rates and fees, especially if you’re financing high dollar amounts.
You may view that bass boat as a necessity to your mental health, but lenders tend to consider recreational boats as luxury items. That means boat loans have strict requirements for both the borrower and the boat being financed.
In general terms, if you borrow $75,000 or more, you’ll see longer loan terms of about 20 years and pay lower interest rates. Those borrowing up to $25,000 will see shorter terms of about 10 years but pay higher interest rates. For used boats, amounts and terms are similar, but interest rates may be higher, depending on the lender.
Check your personal finances before you talk to a lender. Below are some requirements you’ll need to qualify for a boat loan:
Before you head to the lender’s office, take the time to gather the paperwork for the boat. In addition to the boat’s age, condition and value, lenders will assess the following documents:
There are other loan types you could consider if a boat loan isn’t right for you. You’ll still want to compare lenders and ask about fees and other costs.
If you think you’ll only go out a few times a year, or want to try out a specific boat before you buy, consider charter or leasing options.