Boat Loans & Financing Options
Many lenders offer boat loans, including LightStream, Upgrade, and Wells Fargo. Some lenders offer unsecured loans while others require you to use the boat or another asset as collateral to guarantee the loan. Compare options before applying.
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Whether your passion is sailing, fishing, waterskiing, or other water sports, owning a boat lets you enjoy leisurely days on the water. But, because boats are expensive, many people borrow money to purchase their new boat.
Boat financing can help you get the boat you want now and pay it off over time. This guide will show you some of your options for marine loans and provide insight into questions you should ask before you finance a boat.
In this guide:
- Boat financing 101: How do marine loans work?
- Best boat loan lenders
- What to ask before financing a boat
Boat financing 101: How do marine loans work?
You can use several kinds of loans to finance a boat. One of the most important choices you’ll make is whether to take out a secured or unsecured boat loan.
Secured boat loan
Secured loans require collateral, which means you put up an asset to guarantee the loan. The boat itself could serve as collateral, as with an auto or RV loan; or the lender might require you to pledge your car or another asset, as with a secured personal loan.
Secured loans are more common for more expensive boats that pose a larger risk to lenders.
Pros
- The loan interest rate may be lower because of the collateral.
- The collateral may make the loan easier to qualify for.
Cons
- The collateral is at risk if you don’t repay your loan.
- Some lenders require you to make a down payment so you don’t end up owing more than the collateral is worth.
Unsecured boat loan
Unsecured loans don’t require collateral. Most often, these are personal loans you can use for any purpose, including to buy a boat.
Pros
- The loans may be easier and faster to qualify for than secured loans.
- These loans are usually flexible and many lenders offer them, so you have a wide choice of loan terms.
- You may be able to get an unsecured boat loan for a smaller amount to buy a cheaper boat, while secured loans are usually reserved for costlier vessels.
Cons
- Qualifying may be more difficult because there is no collateral to mitigate the lender’s risk.
- The interest rate may be higher than for an unsecured loan.
Best boat loan lenders
You can find boat loans from online lenders, banks, boat manufacturers, or marine lending specialists. Here are a few lenders that stood out to our team for offering loans to financing boat purchases.
Best for unsecured loans
LightStream
Rates (APR)
4.29% – 10.84%* with AutoPay
Loan Amounts
$5,000 – $100,000
Loan Terms
24 – 84 months*
LightStream is part of SunTrust Bank and provides unsecured loans you can use to purchase or refinance a boat or other vehicle. These loans are best for borrowers with good credit, as the lender doesn’t typically approve loans to borrowers with poor credit histories.
Lender info
- Minimum credit score: 660
- Loan amount: $5,000 – $100,000
- APRs: 4.29% – 11.89%* with AutoPay
Upgrade
Rates (APR)
7.99% – 35.97%
Loan Amounts
$1,000 – $35,000
Loan Terms
36 or 60 months
Upgrade is a great option for borrowers with bad to fair credit that are looking for an unsecured boat loan. With Upgrade, you are able to check your rates without harming your credit score, and eligibility is based more on free cash flow in comparison to other personal loan lenders.
Lender info
- Minimum credit score: 620
- Loan amount: $1,000 – $35,000
- APRs: 7.99% – 35.97%
Best for secured boat loans
Wells Fargo
Rates (APR)
5.50% – 13.79%
Loan Amounts
$3,000 – $100,000
Loan Terms
12 – 60 months
Wells Fargo is one of the largest banks in the country. It offers an array of financial products, including secured loans. You can secure your boat loan with personal savings in a certificate of deposit or use home equity as collateral.
Lender info
- Minimum credit score: Not disclosed
- Loan amount: $3,000 – $100,000
- APRs: 5.50% – 13.79%
Wells Fargo also offers unsecured personal loans for up to $100,000.
Best boat loan from a brick-and-mortar bank
PNC
Rates (APR)
6.24% – 12.74%
Loan Amounts
$1,000 – $35,000
Loan Terms
6 – 60 months
PNC is a solid option for boat loans from a bank with traditional locations rather than an online banking service. Depending on your region, you may have access to an unsecured or secured personal loan.
Here’s what you need to know about the bank’s unsecured personal loan.
Lender info
- Minimum credit score: Not Disclosed
- Loan amount: $1,000 – $35,000
- APRs: 6.24% – 12.74%
Best boat loan for veterans and military members
Navy Federal Credit Union
Rates (APR)
Starting at 6.05%
Loan Amounts
Not disclosed
Loan Terms
36 – 180 months
Navy Federal Credit Union offers boat loans and other financial services to members, who must be military veterans or servicemembers and their families. It’s relatively easy to join if you qualify. This lender offers competitive rates on auto loans you can use for boat financing.
Lender info
- Minimum credit score: Not disclosed
- Loan amount: Not disclosed
- APRs: Starting at 6.05%
Marine financing specialists
Many lenders specifically focus on providing financing for boats. They especially understand the ins and outs of borrowing for a boat. However, their rates may or may not be competitive with other lenders.
If you are buying a boat directly from a manufacturer or a retailer, ask if they partner with any marine loan companies. Compare partner lender interest and annual percentage rates with quotes you get from other personal loan lenders to get the best repayment terms.
What to ask before financing a boat
Whether you should buy a boat or not—and whether you want a new or used boat—depends on your income and financial obligations.
Generally, your debt-to-income ratio shouldn’t exceed around 36%. When considering whether to add a boat loan to your monthly payments, be sure your DTI won’t exceed that amount.
The purchase price of a boat is just the start of the costs of being a boat owner. The expenses associated with ownership vary widely but prepare for ongoing costs beyond your monthly loan payment, including:
- Insurance.
- Fuel.
- Docking or marine fees.
- Boat storage.
- A towing trailer to move your boat.
- Maintenance.
Consider these ongoing expenses when determining whether you can afford to own a boat—especially if you have to take on debt to buy it.
Your credit score will play a big role in determining whether you can get a boat loan at a competitive rate, especially if you opt for an unsecured loan.
A good credit score is typically around 680 to 700 or higher. If your score is below this threshold, consider taking steps to improve your credit before filling out a boat loan application.
Boat clubs provide an alternative to boat ownership. Boat clubs own boats, and you pay a membership fee that entitles you to reserve them. The type of boat and frequency with which you can use them will depend on the club you join and your membership level.
Boat clubs could be a good option if buying a boat would stretch your finances or if you don’t want to be responsible for ongoing expenses associated with ownership. However, you don’t own the asset or have full control over when you can use it, as you would with ownership.
*Payment example: Monthly payments for a $10,000 loan at 9.34% APR with a term of 3 years would result in 36 monthly payments of $319.58. LightStream disclosures here.
