Published 2:07 a.m. ET Aug. 21, 2023
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A boat loan is a personal loan that you can use to purchase or refinance a boat. Buying or refinancing a boat is a major financial decision, so you must determine how the debt will fit into your budget. Our boat loan calculator can help you crunch the numbers and see how much your loan will cost you each month and over the life of the debt.
How to use our boat loan calculator
You can get answers from our boat loan calculator in less than a minute. Here’s how:
- Fill in your loan amount.
- Fill in your loan term.
- Fill in your annual percentage rate (APR).
- Click the “calculate” button.
The calculator will instantly generate your monthly payment, how much interest you’ll pay throughout the loan and the total amount the loan will cost. Beneath those results, you can review other information like your amortization schedule, which shows how much of each payment goes toward the principal and interest.
The boat loan calculator can help you compare multiple loan options as you shop for the best deal. For example, you can see how an interest rate increase will impact your monthly payment and overall borrowing cost.
How to get a boat loan
Every lender has a different application process, but here are the basic steps in getting a boat loan:
- Check your credit. It’s a smart idea to know where your credit stands before seeking funding. Many lenders require good to excellent credit (credit score of 670+) to qualify for a boat loan. If your credit score is low, it’s a good idea to improve it before applying since a lower score could mean a higher interest rate.
- Decide how much to borrow. Be sure to take out a large enough loan to cover the cost of buying or refinancing your boat. However, try to avoid borrowing more than you need so you don’t get caught in a cycle of debt.
- Get pre-qualified through several banks. Pre-qualification typically results in a soft credit check, which won’t damage your credit score. Getting an initial offer from multiple lenders can help you find the ideal boat loan.
- Apply for the loan. Once you’ve found a lender and determined which loan you want, submit a formal application. Be sure to promptly respond to any request for supporting documentation (such as pay stubs). At this stage, the lender will probably perform a hard credit check, which can affect your credit.
- Receive your funds. If approved, you could receive your loan funds quickly — as soon as the same day (though funding times vary per lender).
- Repay your loan. Check your loan agreement to see when repayment will begin. Make sure to factor your new expense into your budget and bill-paying process. If possible, set up automatic payments so your payments are never late.
Pro tip: It’s always good to ask your lender if it offers an autopay discount. If you set up automatic payments for your boat loan, your lender might reward you with an interest rate reduction.
Types of boat loans: Secured vs. unsecured
There are two types of boat loans: secured and unsecured loans. While both can help you finance your dreams of cruising the open water, there are some notable differences.
Secured loans tend to finance large purchases, like a car or house. The asset you buy with a secured loan becomes the collateral for the debt. So, if you default on the loan, your lender can repossess the asset.
With a secured loan, the lender assumes less risk since they can take ownership of the asset you’re financing if you don’t pay. The lender’s reduced risk often means it will be easier to qualify for the loan. Plus, you may benefit from a lower interest rate.
Conversely, unsecured loans don’t require collateral, which means the lender assumes more risk when issuing them. The lender’s increased risk usually translates into stricter eligibility requirements and higher interest rates.
Common uses for boat loans
“Boat loans aren’t solely for new purchases,” says Jorey Bernstein, CEO of Bernstein Investment Consultants. “They can also be used to refinance an existing boat loan or fund improvements and repairs on a boat you own.” You could also finance the purchase of a used boat.
Plus, there are a few other lesser-known boat loan uses. For instance, you can borrow to have a vessel custom-built or take out a boat loan to cover offshore registration fees and international shipping costs.
Compare the best boat loans
Frequently asked questions (FAQs)
Boat loan interest rates can vary dramatically based on your credit, the age of the boat, your loan term and how much you borrow. Typically, boat loan rates range from around 7% to 36%.
Boat loans aren’t necessarily hard to get. You’ll just need to meet the requirements set by your lender to qualify, such as minimum credit score, the boat you want to finance and more. Some lenders also offer boat loans for bad credit, so you might qualify even if your credit isn’t the greatest.
“The average boat payment can vary widely,” says Bernstein. “It depends on the boat’s price, the loan term, the interest rate and the down payment.”
For example, if you finance a $50,000 boat over a 10-year term at an 8% interest rate, your monthly payment will be around $607 (assuming no down payment).
Usually, boat loan repayment terms range from one to 20 years. “Longer terms are typically reserved for larger boats or more substantial loan amounts,” says Bernstein.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
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