Your Guide to Boat Financing in 2025

bunch of ten dollar notes on top of each other. Explore YATCO's boat financing guide, get answers on financing a boat rates, terms, payments & more when buying a boat with a lender.

Securing the right financing for your boat is a crucial step in making your dream of boat ownership a reality. Whether you’re eyeing a sleek powerboat, a luxurious yacht, or a cozy sailboat, understanding your financing options can help you navigate the purchasing process with confidence. In this comprehensive guide, we’ll walk you through the various types of loans available, from conventional loans to more specialized options like FHA and VA loans, and help you determine which is best suited to your needs. We’ll also cover important considerations like interest rates, loan purpose, and the benefits of secured versus unsecured loans. With clear, straightforward advice, this guide aims to demystify the financing process, making it easier for you to secure the best loan and get out on the water. Whether you’re a first-time buyer or looking to upgrade, this guide has everything you need to make an informed decision. If you’re already in the market, check out Vantage Yacht Finance’s Boat Loan Calculator on YATCO to start exploring your options today.

Steps to Getting a Boat Loan: What to Expect

Assess Your Financial Situation

The first step in obtaining a boat loan is to evaluate your financial situation. Start by reviewing your credit score, as this will play a significant role in determining your loan eligibility and the interest rate you’ll receive. Additionally, consider your current income, existing debts, and overall budget to understand how much you can afford to borrow. It’s important to have a clear picture of your finances to set realistic expectations for the loan amount and monthly payments.

Research Lenders and Loan Options

Once you have a good understanding of your financial standing, the next step is to research lenders and loan options. Different lenders, including banks, credit unions, and marine finance companies, offer various types of boat loans with different terms and conditions. Compare interest rates, loan terms, and any associated fees to find the best deal. Some lenders specialize in boat loans and may offer better terms or additional benefits, such as flexible repayment options or pre-approval.

Get Pre-Approved

Before you start shopping for your boat, it’s wise to get pre-approved for a loan. Pre-approval gives you a clear idea of how much you can borrow, making it easier to focus on boats within your budget. It also shows sellers that you’re a serious buyer with financing in place, which can strengthen your negotiating position. To get pre-approved, you’ll need to provide the lender with information about your income, employment, and credit history.

Choose Your Boat

With pre-approval in hand, you can confidently start shopping for your boat. Consider the type, size, and features of the boat that best fit your needs and budget. Whether you’re looking for a sailboat, powerboat, or luxury yacht, having a clear budget will help you narrow down your options and avoid falling in love with a boat that’s out of reach financially.

Finalize the Loan Application

Once you’ve chosen your boat, it’s time to finalize the loan application. Your lender will require detailed information about the boat, including its price, age, and condition. You’ll also need to provide documentation to verify your income and creditworthiness. If the lender approves your application, they will offer you a loan agreement with the terms and conditions. Review this agreement carefully to ensure you understand the interest rate, repayment schedule, and any fees involved. Subject to credit approval, the lender will finalize the loan terms.

Close the Deal

After you’ve agreed to the loan terms, the next step is closing the deal. This involves signing the loan agreement and any other necessary documents, such as the bill of sale for the boat. The lender will then disburse the funds to the seller, and you’ll officially own your new boat. At this point, you should also arrange for insurance, as most lenders require proof of insurance before releasing the loan funds.

Begin Repayment

With the loan closed and your new boat in hand, you’ll start making monthly loan payments according to the agreed-upon schedule. Be sure to make your payments on time to maintain a good credit score and avoid any late fees. It’s also a good idea to keep track of your loan balance and repayment progress, so you can stay on top of your financial obligations and pay off the loan as efficiently as possible. Loan terms and conditions are subject to change without notice.

Types of Boat Loans: Finding the Right Financing for Your Purchase

Conventional Boat Loans

Conventional boat loans are the most common type of financing available for purchasing a boat. These loans are typically offered by banks, credit unions, and specialized marine lenders. Conventional loans are not backed by the government and are based on the borrower’s creditworthiness, income, and the value of the boat. They usually offer fixed interest rates and terms ranging from 5 to 20 years, depending on the lender and the amount borrowed. Conventional loans are not backed by the government and are based on the borrower’s creditworthiness, income, and the value of the boat. They usually offer fixed interest rates and terms ranging from 5 to 20 years, depending on the lender and the amount borrowed. Subject to credit approval, these loans provide stable financing options.

FHA Loans for Boats

FHA (Federal Housing Administration) loans are primarily designed for home financing and are not typically used for purchasing boats. However, in some cases, FHA loans may be applicable if the boat is considered a primary residence or if it qualifies as a manufactured home. These loans are backed by the government and are available to buyers with lower credit scores or limited down payment funds. FHA loans offer competitive interest rates and more lenient qualification requirements, making them an option for those who may not qualify for conventional financing. It’s important to note that FHA loans for boats are less common and may require additional documentation and approval.

VA Loans for Boats

VA (Veterans Affairs) loans are another type of government-backed financing primarily intended for home purchases. Like FHA loans, VA loans are not commonly used for boats, but there may be exceptions if the boat is considered a primary residence. VA loans are available to eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. These loans offer several benefits, including no down payment requirements, competitive interest rates, and no private mortgage insurance (PMI) fees. While VA loans for boats are rare, they can be an option for eligible veterans looking to finance a liveaboard vessel or a boat that qualifies as a manufactured home.

Secured vs. Unsecured Boat Loans

In addition to the specific loan types mentioned above, boat loans can also be classified as secured or unsecured. Secured boat loans use the boat itself as collateral, meaning the lender can repossess the boat if the borrower defaults on the loan. These loans typically offer lower interest rates because they are less risky for the lender. Unsecured boat loans, on the other hand, do not require collateral and are based solely on the borrower’s creditworthiness. While unsecured loans offer more flexibility, they often come with higher interest rates and stricter qualification requirements.

Home Equity Loans for Boats

Another financing option to consider is using a home equity loan to purchase a boat. Home equity loans allow homeowners to borrow against the equity they’ve built in their property. This type of loan can offer lower interest rates compared to traditional boat loans, as the home serves as collateral. However, this option also carries the risk of losing your home if you default on the loan. Home equity loans are best suited for buyers who have significant equity in their homes and are looking for lower interest rates and potential tax benefits.

Depending on the boat dealer you are buying the boat from, you may be able to secure a loan through them. Some lenders may require additional documentation regarding loan purpose before finalizing the agreement. A few business days are typically needed to process these applications.

Most financing terms will be for around 10 – 20 years. Approval timelines may vary based on business days required for processing. Always ensure your financial details are in order to streamline your loan process. Loan terms are subject to change without notice.

  • Loan application 
  • Income proof – possibly through tax returns 
  • Financial statement 
  • Details on the boat you are purchasing 

How long can you finance a boat for?  

Most boat finance terms will be for a term of 10, 15 or 20 years. As boating has become more popular and their seaworthiness has become greater, lenders are open to more flexible terms. Once upon a time, it was harder to get a longer term boat loan since lenders weren’t convinced that they’d get their loan paid off before the boat had lost its value so they wouldn’t have any collateral should the owner default on the loan.

  • The terms for financing a new boat are similar to all boats – usually up to a maximum of 20 years. 
  • Used financing rates and terms are similar to new boats, in that they are usually offered for a term of 10 – 20 years

Can you finance a boat for 30 years?  

It’s very uncommon to see financing terms of up to 30 years – most will have a maximum loan term of 20 years.

two business men shake hands, a third business man is using a calculator, business financing guide 2023

Is it hard to finance a boat?  

It’s never been easier to finance a boat. Most lenders have learned that boat owners are usually diligent on their loan repayments and with interest in boat ownership growing every day, it’s a great business model for them. Depending on your loan application and the year of the boat, it can sometimes be easier to secure a loan for boats less than five years old, but that doesn’t mean they do not offer loans to older models – you may just be able to secure better financing terms on newer boats. 

Who will finance a boat with bad credit?  

While it will be harder to finance a boat with bad credit, it’s not impossible. Many private lenders will offer loans to those with bad credit that were denied a loan from elsewhere. Depending on your credit score and the amount requested, private lenders may require collateral, or only be able to offer a higher interest rate than others

What credit score do you need to finance a boat? 

While every lender will have a different threshold, it’s generally accepted that most boat lenders will happily offer you a loan with a credit score of around 650.

Is it harder to finance a boat than a car? 

It can be a little harder to finance a boat than a car, and here’s why. Partially due to the sheer number of cars on the road and the need for automotive loans, and also due to the length of ownership. People tend to upgrade and grow out of their cars at a much quicker rate than boats, so car loans are usually for smaller terms, with lower interest rates and smaller amounts to borrow. As such, there are a number of competitive lenders available for your next car. Boat loans don’t have the same guarantee of resale value as a car – while they both depreciate, cars will always have a demand, while boats are more of a niche market.

Financing a yacht will be no different from financing a boat. Your loan request may be larger, but you will usually have similar terms and requirements. You may go through a regular bank, lenders who specialize in marine loans, or even go directly through your boat dealer and their finance department. 

Before you start the process, find out how much boat you can afford. 

sign of a bank on a stone wall

How to finance a liveaboard boat?  

It can sometimes be harder to finance a liveaboard boat since you don’t have the collateral that you would if you were securing a mortgage. Boats don’t maintain their resale value like a home so if you default on the boat loan payments, the bank will usually lose money. So, while it may be harder to secure financing for your liveaboard boat, it isn’t impossible. Like those with bad credit looking to finance a boat, you will usually be able to find the right lender to help bring your liveaboard dreams to life. 

For more information on what it’s like to live aboard full-time, please refer to this article.

Do boat dealers or yacht brokers offer financing?  

Boat dealers commonly offer financing for boats, while yacht brokers do not. Yacht brokers can, however, help refer you to some reputable lenders should you be on the lookout for quotes. Click here to find a trusted yacht broker near you for more information. 

Read this informative article to discover the key to selecting your ideal yacht broker.

What is the monthly payment of a $300,000 boat? The exact monthly payment on a $300,000 boat will depend on various factors: 

  1. How much down payment you made 
  2. Your credit score 
  3. The interest rate secured 
  4. Your loan repayment terms 

To give some perspective, let’s say you put 10% down on the boat, so you still owe $270,000. If we go for an average interest rate of 6.5% and a 20-year term, you will be looking at a monthly payment of around $2,000. 

What is the average finance term for a boat?

Most financing terms will be for around 10 – 20 years.  

Are boats worth the investment?

Boats are not typically assets that appreciate in value. More often than not (as in almost 100 percent of the time), you will lose money when you go to sell your boat – you will sell it for less than you paid. However, that doesn’t mean that boats are a “bad” investment. Boats give you freedom to explore the world around you, on your own terms. Boats create memories to last a lifetime for you and your guests. Boats can be the stress reliever you need to escape your day job or life stressors. Boats can actually give you the gift of time — time onboard with family and friends; time discovering untouched lands; time spent catching the biggest fish of your life; or time spent floating under the hot summer sun. 

So, while boats might not carry the best financial return on their investment, they do exceed expectations on memories made and experiences available.

luxury boats on a boat pier, business financing guide 2023

Boat Dock Financing & Boat Slip Financing 

How to finance a boat dock

Financing a boat dock will be similar to other items you need to borrow money for. Usually, you will apply for this loan under your mortgage, or as a home improvement loan. It will not usually be part of your boat loan. 

How to finance a boat slip

Boat slip financing will be similar to other loans you are hoping to secure. Boat slips are usually much larger than a personal boat dock and are often used as an investment for buyers to then rent out space on the slip. You can shop around from various lenders to see the rates and terms they have available based on your credit history.

luxury boats anchored on a sandy part of the ocean

Boat Title 

What is a boat title loan?  

A boat title loan is where you put your boat up for collateral when you need cash for a short-term loan.

All this means if you default on your loan repayments, the bank or lender can take your boat as a means of payment. 

Can you get a title loan on a boat?

Yes, you can get a title loan on a boat provided the lender you are working with has this option available. 

Getting a boat loan doesn’t have to be a stressful experience. As the interest in boating and yachting grows, these boat loans become more commonplace across a number of lenders. We have a wide variety of other in-depth guides for boat lovers: learn about right of way rules on the water, or what it’s like boating in the superyacht capital of the world in Florida.

Additional Loan Considerations

Processing times for boat loans may vary, often taking a few business days to complete. Additionally, lenders will review the loan purpose to determine eligibility and risk factors. The approval of your loan is subject to credit approval, and terms may be subject to change without notice. Make sure to check with your lender on their estimated processing time to know how many business days it will take to get approved to avoid delays.

If you’re considering refinancing or making adjustments to your existing loan, be aware that refinancing options are also subject to credit approval. Some lenders may offer lower interest rates or extended repayment terms, but conditions can be subject to change without notice. Always review the full loan agreement before signing to ensure you understand the financial commitment you are making.

By staying informed about your financing options and lender requirements, you can make the best decision when securing your boat loan. Keep in mind that loan processing may take several business days, and lenders will assess your loan purpose before finalizing the terms. Whether you’re purchasing your first boat or upgrading to a larger vessel, understanding these key aspects of boat financing will help you navigate the process with confidence.

YATCO Boating and Fishing Guides 

Explore a full list of our detailed yacht and boat FAQ articles here. 

Search YATCO’s new boats for sale, used boats for sale, new yachts for sale, and used yachts for sale.  

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