Boaterpal is a community supported site. We may earn a commission if you buy from a link.

Why Getting A Boat Loan May Be Easier Than You Think

The world of financing can oftentimes appear to be much more intimidating than it really is. Many people have dreams of getting their next toy but have no idea how to go about it. What happens when I want my dream boat, is it hard to get a boat loan?

Not at all! Getting your very own boat loan has never been easier, consumers have more than enough options when it comes to securing financing on their own terms. Although it’s safe to say that it may be slightly more difficult than finding an auto loan.

Boat loans work much like auto loans in that a borrower can have a bank pay for their boat and make monthly payments back to that bank over a fixed period of time. There are fewer banks willing to give out boat loans than auto loans, but with the help of this article, you will be directed to exactly where to go.

Thanks to the popularity of the internet, applying for a loan has never been more accessible. Buyers can shop between different lenders online and see which loan will work best for their situation. So don’t be afraid to finance, apply for your very own boat loan today!

Where To Begin When Getting A Boat Loan

Trying to get financing for a boat can be confusing, but it doesn’t have to be. Acquiring a boat loan is a lot like getting a personal loan or financing a car, and anyone can do it in just a few short steps:

  1. The Budget: Buyers hopeful of getting their own boat through financing will have to start with their budget. This article “How Much Boat Can You Afford? (Simple Calculator)” will help you find exactly how much you should be spending. When lenders look at applications for loans, there are a couple key factors. First, they will want to look at the applicant’s credit score and sometimes proof of their income. The higher the credit score and proof of income the better the loan, usually borrowers can expect to see lower interest rates and higher dollar amounts for the principal of the loan as well. Most lenders will want to see a credit score of 700, but it is possible to have one as little as 550. If you want to increase your odds at getting the best rates, improve your credit score before you apply. This can be done by making a large payment or paying off any existing debt you may have. Banks and other financial institutions will look at how much a borrower is currently borrowing on other loans, anything from a car loan to a mortgage. By paying off a large portion or all of these debts, bankers will be willing to give out more money and help you get enough to get the boat of your dreams.
  1. The Boat: Now comes the fun part. Once a borrower has done their homework and found out exactly how much they can get through financing, it’s time to pick out a boat. Shoppers can look online at many different websites at once, or they can head in person to a boat retailer and find their next dream vessel. Sometimes you can even secure financing through the boat dealer. Many boat sellers offer their own financing as well, so if you haven’t completed the first step, you should still be able to go through with financing.
  1. The Budget Part II: Before submitting an application and going through with the process, I would always recommend using a boat loan calculator. Simply enter your gross monthly income, total monthly debt like mortgage payments and student loans, your desired debt to income ratio, and there you have it! The website will give you the amounts for both how much a borrower can spend on a boat and storage every month and the maximum amount that should be spent on a boat. Using a boat loan calculator like this one is essential to ensuring that borrowers aren’t breaking the bank!
  1. The Borrowing: Once you have done the math to see not only how much you’ll be able to borrow but also how much repayment will cost and when the payments are due, you’re ready to apply! Those looking to buy their own boat can either get pre-approved before heading to the boat retailer or apply for a loan on the spot. Most applications are similar, banks will usually ask you the same questions. Bankers will want to see proof of income, sometimes up to two years in the past. Other lenders may want to run a credit check to see if you’re capable of repaying the loan. After the application is processed and the approval comes in, the job is done!

Finding The Right Lender

As previously mentioned, when looking for a lender to fund the loan, borrowers have many options. Using a computer or smartphone, anyone who wants to buy a boat can compare rates online! There are many factors that go into a boat loan, financial institutions have different ways of figuring out their side of the deal. Having good credit and a large down payment are two great ways of securing the loan you want. Below we can take a look at some popular lenders:

 LenderMaximum Loan
Amount
Annual Percentage Rate (At time of publication)Loan TermsCredit Score Requirement
LightStream$100,0004.49%2 Years to 7 YearsNone Required
Bank of the West$5,000,0003.74%4 Years to 20 Years700
Southeast Financial$4,000,0003.74%Up to 15 YearsNone Required
  • LightStream: As we can see above, anyone looking for a boat loan has a boat load of options. LightStream has emerged as a great selection for those who want to buy a boat but may not have the best credit or a large down payment. You can apply with LightStream online and could even receive an approval the same day! Sometimes they even offer same day funding, perfect for those who want a boat and want a boat now. Some other benefits of LightStream include their nationwide availability (all 50 states) and the fact that you can refinance with them as well. Some things for customers to look out for are LightStream’s relatively low loan amounts and high interest rates. This is definitely the quickest lender on the boat market and their terms reflect their speed.
  • Bank of the West: Coming in as a harder to get option, Bank of the West offers the highest loan dollar amounts of the three financial institutions we’re covering today. To do so, they have some pretty heavy requirements they want their prospective borrowers to meet. Namely, Bank of the West requires each applicant to have a credit score of at least 700 before applying. While this may seem like an obstacle, Bank of the West does offer up to $5,000,000 in boat loans and lets you keep the loan for up to 20 years. Some of the other major benefits loanees can expect from Bank of the West include their extremely low rates and their feature that lets loanees pay for fees within the loan itself. This is the best option for anyone looking for the boat of their dreams and can afford it.
  • Southeast Financial: With a high and a low comes a middle which is exactly where Southeast Financial is at. Offering up to $4,000,000 over 15 years with no credit required, it’s easy to see why so many people go through this lender. This company also offers same day approval and funding giving certain borrowers the ability to acquire their loan quickly. Southeast Financial does have its requirements though, applicants must apply for at least $20,000 and residents of Hawaii and Alaska are not eligible to apply. This is a great choice for a borrower who wants a high loan amount but doesn’t want their credit involved in the process.

One of the best parts of getting a boat loan is shopping around, we’ve only gone over three companies yet each one is significantly different from the last. While these are three very popular choices they certainly aren’t the only ones and borrowers can find a multitude of competing offers with the click of a button!

How Easy It Is To Get A Boat Loan

Getting a boat loan has truly never been easier. Anybody looking to get on the water can go online and compare a number of options to see which loans fit their unique needs. All potential boaters and sailers have to do is come up with a budget and they should be ready to shop around! Different banks have different requirements for their loans which plays into the hand of the consumer; when there are 40 financial institutions competing for your signature, you’re the winner!

Many people see a stigma surrounding boat loans, is it hard to get one? The answer is no. If you know where to go, it’s not any harder than getting a car loan or a personal loan. Loan terms and amounts, annual percentage rates, and credit score requirements; if you’ve financed a car before, the process is very similar.

Don’t keep looking at your dream from the dock, go online or head to your local marina today and see how easy it is to get your very own boat loan!

Sam