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Whether you love sailing, offshore fishing, or other water activities, you might consider buying a boat. However, boats can be expensive: Smaller vessels start at $10,000, while offshore fishing boats might cost $400,000 or more.
If you need to cover the cost of a boat or would like to refinance a boat you already own, a boat loan might be a good choice. Just keep in mind that you’ll likely need good credit and verifiable income to qualify.
Here’s what you should know about boat loans:
- 5 loans for boat financing
- How much boat can I afford?
- Are boat loans hard to get?
- Boat loans for bad credit
- Can you get a boat loan for a used boat?
- Do boat loans require down payments?
- Compare multiple offers before setting sail on a boat loan
5 loans for boat financing
Boat loans are available from online lenders, credit unions, and banks. Depending on the lender, your boat might act as collateral for the loan — similar to how a car secures an auto loan. This also means that the lender could seize your boat if you can’t keep up with your payments.
You might also be able to use an unsecured personal loan to purchase a boat. In this case, you won’t have to provide collateral. However, an unsecured loan will likely come with higher interest rates compared to a secured boat loan.
Here are several lenders that offer some of the best boat loans. Each of them offers loans for new boats as well as refinancing. Note that LightStream is a Credible partner, while the other lenders are not.
| Lender | Fixed rates (APR) | Loan amounts | Loan terms | Collateral required? | Type of boats permitted |
| Essex Credit | Check with lender | $10,000 to $5 million | 4 to 20 years | Yes | 2001 or newer models |
| First Tech Federal Credit Union | Check with lender | $1,500 to $500,000 | Up to 15 years | Yes | Models that are 10 years old or newer |
| LightStream* | 7.49% - 25.49% APR with autopay | $5,000 to $100,000 | 2 to 7 years | No | Any |
| Southeast Financial | Check with lender | $10,000 to $4 million | Up to 15 years | Yes | Any |
| USAA | Check with lender | $5,000 and up | Up to 15 years | Yes |
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| * Credible partner lender | |||||
Essex Credit: Best for longer repayment terms
Essex Credit is a division of Bank of the West that offers boat and RV loans. With Essex Credit, you can borrow $10,000 up to $5 million and could have a term up to 20 years, depending on your loan amount.
First Tech Federal Credit Union: Best for small loan amounts
If you’re considering a less expensive boat and only need to borrow a small amount, First Tech Federal Credit Union might be a good choice. First Tech offers boat loans starting at just $1,500 — a much lower minimum compared to other lenders.
LightStream: Best for unsecured loans
Unlike many other lenders, LightStream offers boat loans that don’t require any collateral. You can borrow $5,000 to $100,000 with a term ranging from two to seven years. Plus, if you’re approved, you could have your loan funds as soon as the same business day.
Southeast Financial: Best for large loan amounts
If you’re purchasing a high-end pleasure boat or yacht and need a large loan amount, Southeast Financial could be a good option. You can borrow up to $4 million to purchase a new boat and could have up to 15 years to repay the loan.
USAA: Best for additional financing and benefits
United Services Automobile Association (USAA) offers boat loans starting at $5,000 and terms up to 15 years. With USAA, you can also apply for trailer financing as well as boat insurance to protect your vessel, equipment, and trailer.
Learn More: Where to Get a Personal Loan
How much boat can I afford?
It’s important to carefully consider your budget to determine how much boat you can afford. Also keep in mind that on top of the boat itself, you might need to pay for insurance and accessories as well as provide a down payment.
Boat loan interest rates can also affect how much you can afford. The table below shows how different interest rates, loan terms, and loan amounts could affect the total repayment cost of a loan. Keep in mind that the interest rates shown are solely for illustrative purposes and are hypothetical. Using a boat loan calculator can also be helpful in determining how much you can afford.
| Loan amount | APR | Repayment term | Monthly payment | Total interest | Total repaid |
|---|---|---|---|---|---|
| $5,000 loan | 6% | 4 years | $117 | $636 | $5, 636 |
| $15,000 loan | 6% | 4 years | $352 | $1,909 | $16, 909 |
| $25,000 loan | 6% | 4 years | $587 | $3,182 | $28,182 |
| $50,000 loan | 6% | 10 years | $555 | $16,612 | $66,612 |
| $100,000 loan | 6% | 15 years | $844 | $51, 984 | $151,894 |
| $250,000 loan | 6% | 15 years | $2,110 | $151,894 | $379,735 |
Other boat costs to keep in mind
Beyond the cost of purchasing a boat, here are several other expenses to keep in mind:
- Fuel: Fuel is one of the largest costs you’ll face. If you use your boat to cruise the ocean or enjoy deep-sea fishing, your fuel costs might be significant. A powerboat used once a week to cruise for about four hours at a time would use $1,300 per month in fuel. Larger boats or longer excursions would cost even more.
- Insurance: You might be required to carry boat insurance depending on which state you live in. However, even if you don’t technically have to have it, insurance is still a good idea. Boat insurance costs vary by location — for example, the average price was $188 in Wisconsin and $495 in Florida in 2017. In general, expect to pay about 1.5% of your boat’s value in annual insurance premiums.
- Marine towing: If your boat stops working, you might need marine towing and on-water assistance services. Depending on your location, marine towing services can range from $119 to $365 per year.
- Equipment: Besides the actual boat, you’ll also need additional equipment and supplies, such as life jackets and a trolling motor. Depending on what you choose, your equipment could cost hundreds or even thousands of dollars.
- Boat slip or storage fees: If your boat doesn’t fit on a trailer or can’t be kept in your driveway, you’ll need to pay boat slip or storage fees. Dock slips cost $50 per foot per year on average. For a 20-foot boat, that means you should expect to pay about $1,000 per year — though some areas and marinas might be more expensive.
- Winterizing fees: If you don’t live in an area where year-round watersports are an option, you’ll have to pay to winterize your boat. You’ll typically spend about $300 to have a professional winterize your boat for you, though larger vessels could cost much more.
As you consider how much boat you can afford, be sure to think about how much a boat loan will cost you over time, too. This way, you can prepare for any added expenses. You can estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Are boat loans hard to get?
You’ll typically need good to excellent credit and verifiable income to qualify for a boat loan. If you have poor or fair credit and can wait to take out a loan, it could be a good idea to build your credit before applying.
Keep in mind that with secured boat loans, the people applying for the loan typically need to be listed on the vessel title. This means that if you apply with a cosigner, they’ll most likely need to be on the boat title.
Some manufacturers and dealers also offer their own in-house financing, which might be easier to qualify for. Be sure to consider all of your options to choose what works best for you.
Boat loans for bad credit
If you have bad credit, it may still be possible to get a boat loan. Bad credit boat loans will have higher interest rates and may also charge origination fees, so you’ll want to factor that into how much you can afford. Also, consider asking someone to be a cosigner to get the best possible boat loan rates.
You may also consider working to improve your credit score to receive more favorable terms and interest rates for a boat loan. For example, paying off existing debt to lower your debt-to-income ratio (DIT) may help raise your credit score.
Learn More: Bad Credit Loans
Can you get a boat loan for a used boat?
Most boat loan lenders offer financing options for new and used boats. However, keep in mind that you’ll likely get lower interest rates on loans for newer models compared to used boats.
Check Out: Same-Day Loans
Do boat loans require down payments?
Whether a boat loan requires a down payment will depend on the lender. In many cases, you’ll need to put down between 10% and 20%.
LightStream, on the other hand, doesn’t require a down payment for its boat loans.
Compare multiple offers before setting sail on a boat loan
Be sure to compare as many lenders as possible when shopping around so you can find the best boat loan rates available to you. Also consider any manufacturer or dealer financing available to you. This way, you can decide what best suits your needs.
With Credible, you can compare your prequalified rates from several lenders that offer personal loans for boats in just two minutes.
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