Boat Loans: How Long Can You Finance a Boat?

If you’re thinking about buying a boat, it is highly likely that you need to do some research into the finances behind your purchase. There are a lot of questions that you should be asking yourself including how long you can actually finance a boat?

There are a lot of different variables and factors that can change what your ideal decision will be. However, with some careful research and deliberation, you should be able to put yourself into a great decision that will allow you to buy the boat of your dreams.

Keep reading to get all of the best information about boat loans, how long you can finance a boat for, and some other factors that you may not have considered when thinking about your boat purchasing decision.

How Long Can You Finance a Boat?

Boat loans are different than car loans and they can actually last up to 20 years which is more similar to a home mortgage than anything. However, it may not be in your best interest to borrow for that amount of time.

That decision would depend on the cost of the boat and what kind of interest rate you are willing to pay. You will usually find lower interest rates for shorter loans, but that would make your monthly payment higher.

Keep reading to learn everything about boat loan terms and how to get yourself into the best situation so that you can purchase the boat of your dreams.

How to Find a Boat Loan

If you are trying to find a boat loan, you should be aware that different sources can mean different things for how you structure your boat loan.

There are some different places that you can find a loan and they all have different pros and cons. Just because someone has reached out to you with an offer does not mean that they are the best place for you to get a boat loan through that source.

Here are some of the main ways that you can find a boat loan, but keep in mind these may not be your only options either.

Dealer Financing

This is probably the most common form of boat loans for purchases. It is usually easiest to go through a dealership because banks have relationships and the dealerships are going to find a bulk of the customers.

Basically, the dealer is working with you and working with the bank to come up with terms that work for everyone. It’s a referral system that is pretty convenient because it brings everyone to the table in the same place.


After dealer financing, some customers may go directly to a bank or a credit union to find their boat loan. This would obviously be a similar situation to dealer financing, however, the customer is going directly through the bank to get the loan that they need.

These APR rates can be fairly low depending on the bank and the individual’s credit ratings.

You may want to be on the lookout for different promotional offers that your bank is offering when it comes to loans because you may be able to negotiate a better rate than simply going through whatever the dealer offers on a dealer financed loan.

Marine Brokers

This is a fairly uncommon situation, but it does still affect boat loans. Marine brokers are most commonly used when you are purchasing a boat that is pre-owned.

A broker would connect you with the seller and assist you through the process of buying a boat. That means helping you find the right boat that will work for your situation, then helping negotiate with the sale of the boat, and then completing the actual purchase itself.

You should watch out because some brokers have conflicting interests meaning that they work for the seller, but they also offer buyer services.

That isn’t to say that these people are dangerous, but you should always make sure that anyone helping you negotiate has your best interests at heart.

At the end of the day, if you’re making a purchase they should be working as a buyer’s broker that will be representing you. You should never feel pressured to make a purchase that doesn’t fit what you’re looking for.

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Don’t settle for a less than ideal situation and make sure that the boat you are purchasing is right for you.

Be Sure to Look Around

As mentioned, you should definitely do your homework if you are buying a used boat. Some people get desperate when looking for a boat and then pay too much for what they really need.

You should use a guide to research the value of certain boats and do even more homework to see if that’s a fair value for the local area that you’re in.

While it may not seem to make much of a difference, prices can vary higher or lower depending on your zip code and where you are located.

Regardless of if you are buying a used boat or a new boat, you should also figure out which of the above financing paths will work best for you.

You want to get yourself the best rate possible as well as a boat loan that is agreeable when it comes to the years and the payments for your individual situation.

Again, you shouldn’t compromise what you are looking for just because a situation seems convenient.

You need to make a purchase that has a monthly payment that will work with your budget, and there are many calculators online that can help you do that.

Don’t put yourself into a situation where your boat puts a strain on your finances.

Types of Boat Loans

The rate of your boat loan will depend on different things like your credit score, the size of the loan, and whether your boat is new or not.

If you have a large loan with a term length of 15 or 20 years, you will probably be expected to pay around 5-7%.

The bigger the loan that you are taking out, the more you should expect that it will be a longer-term loan. If you try to cut down the time, be prepared for a much higher monthly payment.

A reasonable down payment for a boat loan like this would be around 15-20% and may be required by many banks and dealership finance programs.

Fixed Rate Boat Loans

It’s fairly common for customers to opt for a fixed rate loan. They want to add a level of predictability to their loan and that makes this much more popular for most buyers.

Adjustable Rate Boat Loans

If you want to be a bit more open to some risk, you may be more interested in an adjustable-rate boat loan. This is for consumers who are more confident that they can deal with the differences in interest rates over time.

Regardless of what loan you get, you should check the terms and think about your future as opposed to the deal in “present” terms.

Boat Loan Alternatives

Some people look for a boat loan but may have less than ideal credit – or simply may be looking for other methods to finance a boat purchase.

Home Equity Loans

This is a loan that is secured by an asset (your home) which will help you secure a more competitive rate.

Most of these loans will be in the 5-6% range as of the time of this writing, and these rates will usually be fixed. Obviously, the risk here is that you are digging into the equity of your home for a purchase that is basically “non-essential”.

You need to be very confident that you can pay this debt or you risk losing your home for something that you didn’t really need. Fees can get aggressive in this environment if you start to have problems.

Most home equity loans will be available for 5-15 years but they can also be stretched out to 20 years as well. Most home equity loans will require a pretty solid credit rating so you should keep that in mind.

Personal Loans

There are a lot of lenders who will offer personal loans which should allow you to shop around for the best rates.

If you have good credit, you should be able to lock into a loan with a nice interest rate. These loans will hurt your credit if you end up having problems or if you eventually would have to default on the loan.

If you don’t have ideal credit, you’re going to get hit with higher interest rates than other customers would be. Personal loans are also shorter than some of the other loans we’ve talked about here, so be aware that you are going to have a higher monthly payment as you pay off your loan faster than other methods.

It may be better to go with a secure personal loan as that is anchored by the collateral of the boat that would be seized if you are unable to pay your debt on the boat.

Subprime Loans

These are not the most ideal way to pay for a boat purchase because you would be challenged in finding financing through other methods.

Generally, subprime loans are for people with bad credit. You may get the chance to get a loan, but the terms are not going to be as good as if you are able to use one of the above methods.

Boat Loan Terms

If you are set on financing your upcoming boat purchase, keep in mind that your options will change as your financial picture does.

Just like any loan you take out, the terms and rates will change along with your credit score and the amount of money you’re able to put towards the boat in the first place.

If you have less than ideal credit, you are going to find a less favorable borrowing situation if you are looking at a similarly priced boat as someone else with better credit.

Things to Remember:

If you are approved for a loan, it does not mean that accepting the loan is a great idea. Just because you can make a down payment and you can sign and be done does not mean you are entering into a contract that is good for your future.

Banks, dealerships, and many other people are not going to go out of their way just to look out for you. You do need to keep your financial picture in mind and make sure that you are making a purchase that is appropriate for you.

Some people try to overspend and buy a boat that is much nicer than they need and regret it down the road when they are upside down on their boat loan.

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Similar to the last point, you should be able to check out your credit before making a purchase. If you have other debts that you are able to pay off before entering the boat purchasing arena, you may want to do so to improve your credit and your available finances.

That way, your mind will be in the right mindset to know exactly what you are paying for your non-essential purchase.

Be realistic. It can be very tempting to overspend or buy the nicest boat that you are able to get approval for, but you will put yourself in a much better situation and have a lot more happiness long-term if you are in a situation that is realistic for you.

Owning a boat as a recreational purchase with payments that you can’t make payments is not any fun at all. While the temptation may seem rather appealing, it is much better to slow down a bit and think about how this long-term will affect your present situation and your future self as well.

Regardless of what you decide, be sure to do your homework and be deliberate when making decisions to get the boat that you deserve at terms that are fair.