Best Boat Loans

Buying a new 20’ boat can cost you upwards of $60,000 and potentially more,  and the average costs for maintenance and insurance only add up from there. With the best boat financing in place, however, you can purchase the boat of your dreams and pay for all other necessary expenses. Our team of financial experts reviewed and ranked more than 30 online lenders to help you get funded, so read on to learn more.

Best Boat Loans of 2023 - Full Overview

While there are many reputable lenders offering boat loans online today, we selected the following companies due to their loan offerings and accessibility. Read on to find out which companies have the best boat financing rates and terms.

How to Choose the Best Boat Loans? 

To find the best boat loans, our experts compared lenders based on an array of important factors. These factors influence how much boat financing actually costs in the end, as well as the user experience borrowers have along the way.

The following factors should be considered by anyone financing a boat.

• Loan features: Make sure lenders you're considering offer loans that are large enough to meet your boat financing needs. Also ask about repayment plans, and look for a lender that offers plenty of flexibility.
• Interest rates and fees: Compare lenders based on their boat loan rates and potential loan fees. Make sure to watch out for hidden fees, such as origination fees and prepayment penalties.
• Application process: Look for lenders that let you get prequalified for boat financing without a hard inquiry on your credit report. From there, focus on companies that offer a fully online application process.
• Qualification process: Check for lender qualification requirements, such as a minimum credit score or a maximum debt-to-income ratio. However, know ahead of time that some lenders are more transparent about their requirements than others.
• Customer support: Compare loans for boats based on the customer service offerings of each company. Look for providers who have plenty of contact options, including phone, email, and online chat.
• Online user reviews: Read user reviews of the various companies offering boat loans. The best places to look include Trustpilot and the Better Business Bureau (BBB).
• Perks and Bonuses: Finally, check whether various lenders offer any perks for using their financing, which may include loan discounts or refer-a-friend programs.

Understand the Costs of Owning a Boat

There's a reason many people joke that B-O-A-T stands for "bring out another thousand." In addition to the costs involved in buying a boat, there are myriad expenses and fees required to use and maintain a boat throughout the year.

Common costs of owning a boat include:

• Cost of a trailer to transport your boat, which can vary
• Annual or monthly charges for boat insurance (varies)
• Boat storage, which can cost several thousand dollars per season
• Costs involved in winterizing a boat and preparing it for storage (when applicable)
• Marina fees, which can vary
• Maintenance costs, which can vary widely depending on the type of vessel and its age
• Boating equipment and accessories
• Fuel costs
• Expenses involved in acquiring a boat license

At the end of the day, there's a lot more involved in paying for a boat than coming up with the cash for the purchase price. You can finance some of the costs of boat ownership within your boat loan, yet you should also set a monthly or annual budget that will account for all the other boating expenses you'll pay throughout the year.

What is a Boat Loan?

A boat loan is a personal loan that comes with a fixed monthly payment, a fixed interest rate, and a set repayment schedule that will never change. These loans let boating enthusiasts get the financing they need to purchase the vessel they want, and they can use any additional funds for upgrades, equipment, and ongoing maintenance expenses.

Secured Boat Loans vs. Unsecured Boat Loans?

While the boat loans we highlighted in this guide are unsecured, there are also secured boat loans to be aware of. The main difference in these two types of loans is that one requires collateral and the other does not.

• Unsecured boat loans do not require any collateral, so they are not secured by the boat or any other assets you own.
• Secured boat loans require collateral, so the lender can take possession of your boat if you don't pay your loan back.

While secured boat loans require you to put your boat up as collateral for the loan, they may come with lower interest rates since the loan is backed up with assets. Secured boat loans can also be available to borrowers with shaky credit since the boat itself can be repossessed at any time.

Before you decide on the type of boat loan you want, it can help to check your credit score to see where you stand. If you have a good credit score, or any FICO score of 670 or higher, it's likely an unsecured boat loan will work for your needs and be more convenient overall.

Where to Get a Boat Loan

Whether you opt for an unsecured personal loan or a secured boat loan, there are several types of institutions you can turn to for funding.

• Online lenders: Online lenders like Lightstream and Upgrade offer unsecured loans that work well for boat financing, as well as the financing of related equipment and upgrades for your boat. Rates and terms are very competitive, and online lenders let you complete the entire funding process without visiting a loan office.
• Credit unions: Credit unions also offer boat financing, and members can qualify for exceptional rates and terms. Examples of Credit unions that offer boat loans include Chevron Federal Credit Union and PenFed Credit Union.
• Traditional banks: Traditional banks like Chase and Citi also offer boat financing, as well as personal loans consumers can use for boat expenses.
• Boat dealers: If you buy a boat from a dealership, the company may have their own financing options available. Make sure to compare in-house boat financing with online loans and boat financing from traditional lenders.

How to Get a Boat Loan

While the steps involved in getting new or used boat loans varies by lender, you'll find a general overview of moves required to get boat financing below.

• Step 1: Find the boat you want, which will help you get an idea of how much you need to borrow.
• Step 2: Look for boat loan companies that offer the amount of financing you need, and use a loan calculator to see what your monthly payment might be.
• Step 3: Check your rate with at least three or four lenders that offer boat financing.
• Step 4: Compare each lender based on their boat loan rates and lender fees, and make sure to watch out for hidden charges.
• Step 5: Decide which lender you want to move forward with, and check their qualification requirements before you apply.
• Step 6: Fill out the lender's loan application with the information they request, such as your contact details, Social Security number, your employment data, and your income.
• Step 7: Wait for your loan to be approved, which could take several hours up to a few weeks.
• Step 8: See if your lender needs any additional documentation to approve your loan, and send it right away if they do.
• Step 9: Receive your loan funds as a direct deposit into your bank account.
• Step 10: Use your boat loan funds to purchase your boat, then get out on the water as soon as you can.

What are the Repayment Periods for Boat Loans

Repayment periods for boat loans vary widely by lender, and they can even vary based on the amount of money you borrow. As an example, Lightstream lets you borrow up to $100,000 in boat financing then repay it over up to 144 months. However, other loan companies offer shorter repayment periods that last up to 60 months or 84 months at most.

Boat Loan Alternatives

• Boat rentals: If you can't qualify for a boat loan or you're not quite sure you want to take on the responsibility of boat ownership, renting a boat can work as well. Websites like GetMyBoat.com let you rent nearly any type of boat in a variety of destinations around the world, and you get to enjoy boating with less hassle and stress overall.
• Home equity loans: If you have considerable equity in your home, a home equity loan can also fit the bill. This type of loan requires you to use your home equity as collateral, yet you get to repay your loan with a fixed monthly payment, a fixed interest rate, and a fixed repayment schedule.
• Home equity lines of credit: Home equity loans also rely on the equity you have in your home as collateral, and they come with variable interest rates. Instead of a lump sum of cash, HELOCs extend a line of credit you can use when you need it.
• Credit cards: You can also use a credit card to finance your boat, but interest rates can be incredibly high. If you are thinking of using a credit card for boat financing, look for one that offers 0% APR on purchases for as long as possible.

Conclusion

The best boat loans can help you get into the boat you've always wanted, but you need to make sure you shop around to find the right fit. Factors to consider include the boat financing rates you're being offered, the repayment plans you can choose from, and your monthly payment.

Also make sure you set aside some money in your budget to pay for boat upkeep, maintenance, and all the fun accessories you'll want to buy along the way. Boating can be an expensive hobby, so having your finances in order first is crucial.