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Your Ultimate Guide To Boat Financing

A guide to boat financing will help you understand not just how much you will need to buy one for yourself, but also, what you need in order to finance it. Don’t go elsewhere because we are going to share with you all of that and more so you get to fully understand everything about boat financing.

guide in boat financing  an ultimate guide

Have you been thinking about buying a boat lately?

Do you know how you can actually buy one given the fact that you do not have cold cash to pay for it?

Well, hang in there. There are ways to finance your dream boat, and that is exactly what we are here for — precisely why you are reading this, right?

Anyway, if you are considering purchasing a boat, but do not know where to get money from to buy one, well, the good news is, there is such a thing as boat financing.

There are financial institutions that lend money to people who want to buy a boat. Yes, just like when buying a car or a house.


Over the years, boat loans have become popular. It has even become a trend now given the fact that boats have grown bigger and more expensive. In fact, according to, the average new boat today costs more than $200,000. Quite expensive, right? No wonder why boat loans are in.

Fun fact, in the United States, as of 2016 data from Statista, it says that there are about 15.8 million boats for recreational purposes. In the same year, the value of all recreational boats sold reached $3.6 billion.

To be honest, if you are someone who is not that knowledgeable about boats, the numbers are quite surprising. But, it is what it is, and expect that numbers to grow even more as the years unfold.

Anyway, so, if you are planning to buy a boat, as mentioned, we are going to share with you a guide to boat financing.

Particularly, we are going to talk about the following:

  • How much does a boat costs?
  • What is boat financing?
  • What are the basics of boat loans?
  • Where and how to finance a boat?
  • How much can you borrow for a boat?
  • What are other options to get boat financing?


Before anything else, it is important to have an idea of how much boats do actually cost. This will serve as your guide on whether or not you are capable of buying one for yourself or not.

According to the BetterBoat website, the average brand new pontoon boat costs around $35,000. This refers to the 22-foot pontoon boat size, which is popularly seen on lakes and rivers all around the country.

While you can find smaller pontoon boats, which cost around $20,000, there are also bigger and more expensive ones that would cost over $50,000.

Although pontoon is one of the most common types of boats, it is important to note that boats come in different types and sizes. In fact, as we earlier mentioned, there are boats that cost as high as $200,000 up to $300,000, or even way more than that! The bigger and the more luxurious the boat is, the more expensive it gets.

To give you an idea, here are some of the most common boat types and their corresponding price range:

Catamarans $10,000 and up
Sail Boats $12,000 and up
Bow Rider Boats $15,000 to $50,000
Pontoon Boats $15,0000 to $50,000
Deck Boats $20,000 to $50,000
Fishing Boats $25,000 to $100,000
Airboats $30,000 – $100,000
Cuddy Cabin $50,000 and up
Speed Boats $75,000 and up
Trawlers $90,000 and up
Cabin Cruisers $100,000 to $500,000
Canal Boats $100,000 and up
House Boats $100,000 and up
Yachts $300,000 and up

As you can see, each boat type comes with a different price tag. Thus, if you are planning to buy one whether it be for recreational or business purposes, make sure to know exactly what it is that you actually need. That way it will be easier for you to apply for boat financing, and also easier to determine the kind of boat financing that is applicable to you.


Boat financing or more popularly known as boat loans refers to the kind of set up of borrowing money much like car loans that come with a specific loan amount on which you pay interest over a specific or a fixed term.

Just like any other forms of loans, boat loans or boat financing is also available through banks, credit unions, as well as boat dealers or marine finance companies.

If you want to know more about boat financing, here’s a quick yet very informative video created by BoardCo. Just click the play button below to watch the whole thing:


First thing first.

For this guide to boat financing to be easy to understand, it is just right to discuss the basics of boat loans first. This is very significant especially to those who are getting a boat loan for the first time.

Here are some very important information/details that every boat loan borrower needs to be familiar with:


This refers to any financial institution that offers boat loans. This may be a bank, a credit union, a boat dealer, or a marine finance company. Now, to be sure that the lender you are eyeing for actually offers boat loans, you can check the National Marine Lenders Association as lenders who make boat loans are generally part of this organization.

Interest Rates

Just like any type of loan out there, boat loans come with interest as well. The interest rate varies from one lender to another, which is why it is highly recommended to check and compare. However, it is also important to note that your credit score significantly affects your interest rate as well. Again, just like any other loans out there, when your credits score is high, the lower your interest will be. When you have a low or poor credit score, expect to have a higher interest rate.

Also, how long you will pay for the loan affects your interest rate as well, which is why it is always best to really compare offers first before you seal any deal.

Type of Loan

Another important detail that you need to take into consideration is the type of loan. There’s a variable-rate loan, fixed-rate, as well as a balloon payment loan.

The interest rate of a variable-rate loan will change over the course of the loan. Usually, though, the introductory rate of this type of loan will likely be the lowest. Meanwhile, A fixed-rate loan will lock you into the same interest rate over the course of the loan. As with a balloon payment loan, it requires borrowers to pay the full amount of the loan at the end of a particular term.


Normally, pre-approvals require some paperwork. But don’t worry as they are normally not as cumbersome as the boat loan application. What’s good about having a pre-approval is that it gives you confidence that someone is lending you money, at the same time, it gives the impression that you are indeed a serious buyer.

Down Payment

Basically, sellers may ask you to give a down payment for the boat you are eyeing for. Make sure, though, about the terms of the down payment — if it is refundable, or not should you decide not to pursue the purchase.

Marine Survey

Once your loan is approved, your lender will require a marine survey. It’s like getting a home inspection before you buy a house. Lenders need to make sure that the boat is in good condition, and that it is worth the asking price.


We’ve arrived in one of the most important matters that we need to discuss in this guide to boat financing.

This time, we are going to particularly tackle how to actually finance a boat.

Let’s assume you have already a boat you want in mind, where, and how do you get money to finance for it?

As mentioned earlier, you can get boat financing through banks, credit unions, as well as online lenders, boat dealers, or marine finance companies. Basically, just like a car or a house loan.

Just a quick briefer for your reference on the different financial institutions where you can get a boat loan from:

  • BANKS – There are a lot of banks that offer boat loans. Normally though, banks offer secured loans, which means they need collateral in order to grant you the loan. In this case, the boat automatically becomes collateral. So, in case you fail to pay the monthly payments, the bank has the authority to repossess the boat, and you can do nothing about it.

Requirements and loan amounts vary from one bank to another, which is why it is important to check and compare offers. Also, APR also depends from one bank to another considering different factors.

  • CREDIT UNIONS – Credit unions are partly-owned by members. As a member, you get to enjoy different benefits including boat loans. Unlike banks, credit unions do normally offer lower APR and are less strict when it comes to credit scores.

Credit unions are ideal for people who need to loan money but do not have or have a poor credit score. The downside, however, is that you need to be a member to be able to borrow money. To be a member, you need to pay for a membership fee and submit application documents.

  • BOAT DEALERS – They specialize in the sale of specific brands that are offered by boat dealerships. This one’s a great choice for those who are looking for a new model from a specific boat builder.

If opting for boat dealers, as we keep saying, it’s always best to compare before you shop.

  • ONLINE LENDERS – Online lenders have gained popularity over recent years. Apart from the fact that it’s very convenient as they are entirely online, they also offer very competitive rates. Although some of them tend to have higher rates, the good thing is that some online lenders are not that strict when it comes to credit score, which makes it ideal also for those who have low or poor credit score who would not make it to bank loans.
  • MARINE FINANCE COMPANIES – This refers to companies that specialize in boat loans for most types of boats such as cruisers, ski boats, fishing boats, yachts, and houseboats. Just the same requirements or qualifications vary from one marine finance company to another. Thus, comparing offers is also highly recommended.

Now, let’s move on to how do you actually do it?

Here’s a step-by-step guide for you to follow:

STEP 1: Determine the down payment that you can afford.

Usually, lenders ask for a 10 to 20 percent of the total loan amount as a down payment. Thus, it is important that you know how much you can actually pay outright as a down payment.

STEP 2: Know how much you can afford to pay monthly for your boat loan.

The last thing you want to happen is to realize that you actually cannot afford to pay for the monthly loan payment. That is deadly, because that may cause you to drown in debt. So, before you even think about where to get a loan from, make sure to know first how much you can actually pay for a boat loan on a monthly basis.

STEP 3: Check your credit score.

Just like most loan types, your credit score is vital when getting a boat loan especially if you are borrowing money from banks (they are stricter when it comes to this). So, before anything else, make sure you have good credit standing as it will significantly affect your boat loan application.

STEP 4: Compare loan offers.

It’s a common rule when borrowing money to always compare loan offers first before settling for one. Make sure to read the fine print, and that you speak with the top lenders out there.

STEP 5: Get pre-approval.

A pre-approval letter gives borrower confidence of commitment from the lender, at the same time, it also helps show the dealer that you are a serious buyer and not someone who’s just kidding around.

STEP 6: Make an offer.

To be able to make an offer on a boat that you like, make sure of two things — it does fit your budget, and the amount of the boat fits the lender’s pre-approved loan amount as well.

STEP 7: Secure the boat loan.

Once you’re done doing the previous steps, it’s time to seal the deal, and rejoice for getting a new boat!


As a part of this guide to boat financing, we need to look into how much you can actually borrow for a boat that you are opting to borrow money for.

How much you can borrow for a boat loan depends on several factors. However, there are two major things that are taken into consideration. These are your credit score, and your debt-to-income ratio.

As we have mentioned earlier, your credit score greatly affects your boat loan application. This is one of the determining factors whether a financial institution will lend you money or not. Generally, the higher your credit score is, the better. That means you get higher chances of getting a lower interest rate. The amount of money you can borrow may also be affected by your credit score.

However, the more influential one with regards to the loan amount is your debt-to-income ratio. You can find this by dividing the total of all of your monthly debt payments (mortgage, school loans, credit cards, etc.), and then divide it by your monthly pre-tax income.

Normally, financial institutions would not approve loan applications of borrowers with a debt-to-income ratio that is above 40%. People with such a debt-to-income ratio would rather focus on paying down your current bills instead of borrowing money.


Let’s assume that after reading this guide to boat financing, you realized that you cannot actually afford to buy a boat through boat financing, what to do now? What are your options?

Well, there are a few options out there, and this includes the following:

  • Saving up for the purchase. If owning a boat is not an immediate concern, then why not save up for it for now instead? It’s actually better to purchase one in cash because it gives you a lot of benefits — needless to say, you get to enjoy promos and discounts that are intended for cash transactions only.
  • Look into peer-to-peer rentals. If you want to experience boating, you may consider renting a boat temporarily. There are peer-to-peer rental marketplaces out there like GetMyBoat and Boatsetter that you can check out.
  • Join a boat club. Joining a boat club provides you access to a fleet of boats specifically intended for their members and guests. This comes with a cost though — a one-time payment, and ongoing monthly or annual dues.


Owning a boat seems like a luxury for some, but for others, it is a necessity – especially if intended for business use.

Unfortunately, though, owning one, particularly these days come at a very expensive price. More so, if you are looking for really great boats.

Good thing, boat financing exists. Through lending institutions, buying a boat should no longer be troublesome – provided of course you qualify for boat loans.

Having learned all that, are you convinced of getting a boat loan now?

Hopefully, this guide to boat financing opened your eyes and provided you knowledge and information you need to push through with boat loans. Good luck!

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