Ayrton Oneill
There are many lenders that offer boat loans, and the best one for you will depend on your specific needs and circumstances. For example, if you have a low credit score, you may want to consider a lender that specialises in bad credit loans, while if you're looking for a large loan amount, you'll need to find a lender with high maximum loan limits. It's also important to compare interest rates, fees, and repayment terms to ensure you're getting a competitive deal.
- Boatloan.com: Offers loans ranging from $10,000 to over $5,000,000, with terms from 48 to 240 months. They require a minimum credit score of 680.
- Essex Credit: Offers loans starting at 3.99% APR for new, used, and refinance boat loans. Loan amounts range from $10,000 to over $5,000,000, with terms up to 20 years. They require a minimum credit score of 700 for the lowest advertised rates.
- LightStream: Offers loans starting at 4.49% APR, with loan amounts up to $100,000. They offer the possibility of same-day funding and have a minimum credit score requirement of 660.
- SoFi: Offers loans up to $100,000 with competitive interest rates and no origination fees. They don't currently publish a minimum credit score requirement.
- Upgrade: Offers loans starting at $1,000 with a minimum credit score of 580. They provide adjustable payment dates and secured loan options.
- Achieve: Offers loans starting at $5,000 with a minimum credit score of 620. They provide direct payment discounts and dedicated loan consultants.
- Prosper: A peer-to-peer lending platform offering loans from $5,000 to $50,000. They allow joint applications and offer prequalification.
| Characteristics | Values |
|---|---|
| Company Name | Boatzon |
| Company Name | Boatloan.com |
| Company Name | Southeast Financial |
| Company Name | LightStream |
| Company Name | SoFi |
| Company Name | LendingPoint |
| Company Name | Trident |
| Company Name | Upgrade |
| Company Name | Universal Credit |
| Company Name | Essex Credit |
| Company Name | Intercoastal Financial Group |
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What You'll Learn
How to compare boat loan rates
When comparing boat loan rates, it's important to consider a few key factors. Firstly, the length of the loan term plays a significant role in determining your monthly payments and the overall interest cost. Longer loan terms generally result in lower monthly payments but higher total interest costs over the life of the loan. Conversely, shorter loan terms may lead to higher monthly payments but lower overall interest costs.
Secondly, the interest rate you'll pay depends on factors such as your credit score, the size of the loan, and the lender you choose. It's always a good idea to shop around and compare rates from multiple lenders to get the best deal. Keep in mind that advertised rates may not be the same as the actual rate you end up paying, as lenders often offer lower rates to borrowers with excellent credit scores.
Additionally, the loan-to-value (LTV) ratio, which is the loan amount divided by the boat's total value, can impact the interest rate. Lenders typically require an LTV ratio of 85% or lower, and a down payment of 10% to 30% is recommended to maintain a healthy LTV ratio.
Other factors that can influence boat loan rates include the economic market conditions, the boat's condition and age, the borrower's qualifications, and lender fees. It's important to do your research and understand the total cost of the loan, including any fees or charges, before making a decision.
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What is a boat loan?
A boat loan is a type of personal loan used to purchase a boat or other marine craft. Like auto loans and traditional personal loans, boat loans usually come with fixed interest rates and a set repayment term. The average boat loan term ranges between two to 15 years, but some lenders offer extended repayment terms of up to 20 years for larger loans.
Boat loans are available from online lenders, banks, credit unions, or marine lenders. Not all lenders offer boat loans, but some may allow you to use a personal loan for boating-related expenses.
Boat loans can be secured or unsecured. Secured loans require collateral, such as the boat itself, and often have better terms than unsecured loans. Unsecured loans don't require collateral but are harder to be approved for and usually have higher interest rates.
To qualify for a favourable interest rate on a boat loan, you'll typically need an excellent credit score, stable income, and a low debt-to-income ratio.
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Pros and cons of getting a boat loan
Pros
- Access to funds: A boat loan can give you access to the funds needed to buy your dream boat, which you otherwise might be unable to pay out of pocket for.
- Flexibility: With a multitude of lenders offering boat loans, you can shop around to find flexible terms that suit your needs.
- Low rates for good credit: Rates are low for those with a good credit score.
- Low payments with a long term: Payments can be low with a long term.
Cons
- Risk: A loan is a financial obligation. If you cannot repay it, you could damage your credit. In the case of a secured loan, you could also lose your boat.
- High interest: High interest rates could lead to paying much more than you originally borrowed.
- Long terms: Longer loan terms mean paying more interest over the life of the loan.
- May be difficult to be approved for larger amounts.
- Secured loans will risk your collateral if you default.
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How to get a boat loan
The process for getting a boat loan can be relatively quick if you know what to expect. Here are the steps to follow:
Create a budget
Calculate how much boat you can afford before you start the process. Besides the monthly payment, consider how much cash you’ll need for a down payment if you plan to buy new from a dealership. If you can’t afford to own and maintain a boat or only want to use it once or twice a year for a few days, consider renting a boat instead.
Check your credit score and employment stability
Like any loan, the best credit scores will get you the lowest rates, largest loan amounts and longer terms. You’ll also need to document a steady income to qualify.
Decide on the type of boat you want
A new boat will typically come with a high price tag, a down payment requirement and a secured loan. If you’re buying used, it may be easier to budget for an unsecured loan since the loan isn’t based on the boat’s features.
Shop around
Look at multiple lenders before completing full applications. Make sure you meet the basic credit score requirements and that the lender offers a loan for the amount you need. From there, create a list of the top three to four lenders.
Prequalify
Find lenders that allow you to prequalify first. Prequalification is a process that allows you to check your predicted interest rates and approval odds without any negative impact on your credit score.
Compare offers and apply
Banks, credit unions and marine dealer finance companies usually require that you be present for certain portions of the process. After applying, most lenders let you know within minutes if you’re prequalified. Funding timelines will vary by lender and loan security.
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Alternatives to boat loans
If you need money for a boat but don’t qualify for an affordable boat loan or don’t want to put your boat up as collateral, you still have options.
Best for lower-risk borrowing: When you take out an unsecured personal loan, you don’t risk losing your boat if you miss payments. But personal loans tend to come with higher rates, so you’ll likely spend more money on interest.
Best for homeowners: You pay for your boat by tapping into your home equity with a home equity loan or line of credit. Financing using equity in your home comes with perks like low interest rates, but be careful — your home will be on the line if you miss payments.
Best for part-time boaters: You can save some serious cash by renting or leasing a boat, but it comes at a price: your captain’s hat. If you’re ready to trade in your dreams of boat ownership, you’ll save on the total cost of owning a boat with a lease or short-term rental.
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Frequently asked questions
LendingTree, Boatzon, Boatloan.com, Southeast Financial, LightStream, SoFi, Upgrade, Upstart, Achieve, Prosper, and Essex Credit are some of the best boat loan companies.
Some alternatives to boat loans include home equity loans, reverse mortgages, retirement distributions, and margin loans.
Some pros of getting a boat loan are that there is no down payment for unsecured personal boat loans, terms of up to 20 years for secured loans or 12 years for unsecured, and no lien on the boat so it can't be repossessed if you default. Some cons are that unsecured loan origination and administrative fees may exceed 10%, a large payment could affect your ability to qualify for other debt, and rates could be higher than credit cards for bad credit borrowers.
When choosing a boat loan company, consider the lending requirements, used boat restrictions, member benefits, rates and terms, and fees.
When applying for a boat loan, it is important to create a budget, check your credit score and employment stability, decide on the type of boat you want, shop around, prequalify, and compare offers and apply.
