Boat Financing: New Way to Secure a Boat Loan

You’ve found the perfect boat using our Boat Finder Tool and are ready to make your dreams come true. Now, it’s time to figure out how to secure a boat loan. The process is as straightforward as getting a car loan. Here’s what to do:

1. Identify and Price the Boat:
   • Determine the exact boat you want and get its price.
2. Identify and Price Boat Insurance:
   • Find and price the boat insurance you’ll need.
3. Initiate the Purchase:
   • Proceed with the purchase once you have everything in place.

Processes and Documentation

In the marine finance industry, certain standard documents are required, which we and your yacht broker can guide you through based on the vessel you are purchasing.

Documents Required:

• Marine Mortgage Document: This is a loan agreement secured on the vessel.
• Direct Debit Form: This is needed by your bank to transfer the agreed monthly payment to us.

For New Boats:

• Provide the original invoice or a bill of sale from the boat builder.

For Used Boats:

• Your broker will arrange a Bill of Sale from the current owner, confirming the sale to you. This document is crucial for tracking the boat’s history and ensuring you obtain a clear title.
• We will need original bills of sale for up to 5 years. Depending on the boat’s age, value, and type, a survey may also be required.

Boat Financing Providers: What Are Your Options?

When financing a boat, you have three main options:

1. Boat Dealer Financing:
   • Many people choose to finance through their boat dealer. Dealers often have experience with boat loans and can streamline the process, making it quick and convenient. They have a vested interest in ensuring the financing process is smooth and efficient.
2. Bank Financing:
   • You can also get a loan from your bank, which might involve using a home equity line, second mortgage, or personal loan. This route can offer lower interest rates but may add complexity and paperwork to the transaction. However, it could also provide tax benefits, depending on how the deal is structured.
3. Marine Financing Specialists:
   • Third-party lenders specializing in marine financing, such as those associated with the National Marine Lenders Association, focus exclusively on boat loans. They might offer advantages like lower down payments, faster approval, longer terms, or lower monthly payments.

Modern Boat Financing Options

Even if you have the cash to buy a boat outright, exploring financing options can be wise. Financing helps maintain your liquidity and might allow you to purchase a more expensive boat that would otherwise be out of reach.

Boat loan terms have become more flexible, with typical durations now ranging from 10 to 20 years. Interest rates are very low, and down payments can vary from nothing to 20 percent.

Opting for shorter terms and a higher down payment can secure even better rates. Larger loan amounts might also come with more favorable terms. In some cases, buying a pricier boat can actually save you money in the long run.

Use a Boat Loan Calculator

Wondering what your monthly boat loan payments will look like? A boat loan calculator can help you estimate costs for different loan options.

Key Points to Remember:

• Interest Rates: Typically, interest rates decrease as the loan amount increases and as the loan term shortens.
• Loan Terms: Boat loans usually range from 4 to 20 years. Larger loan amounts often come with longer terms.
• Down Payments: Most loans require a 10-20% down payment, though some no-money-down deals are available.
• Additional Costs: You can often include the cost of accessories like electronics, trailers, and extended warranties in the loan. Plan ahead to cover the full package you want.
• Credit Scores: Lenders generally look for credit scores of 700 or higher. A lower score might result in higher interest rates or a larger down payment.

Boat financing can be a great way to make your dream of owning a boat come true. By understanding how it works, choosing the right type of loan, and being smart about your finances, you can enjoy many fun and exciting adventures on the water. Remember to budget wisely, compare your options, and take good care of your boat. With a bit of planning and the right loan, you’ll be cruising the waves in no time.