Best Boat Financing (Loan Options)

‍For anyone who is interested in financing a boat, knowing which options are best will go a long way in helping you determine what route to take.

Buying a boat is one of the great joys of life, but figuring out how to best finance it isn’t always that great. Navigating the paperwork, interest rates, terms of contract and financing options can all feel overwhelming when you are new to the world of financial institutions. And, since a boat purchase can be one of the largest ones that you will make, you will want to guarantee that you know you are getting the best terms possible for your situation.

The best boat financing loan options are:

• Boatloan.com (online financial lender)
• Essex Credit Union
• Trident Funding
• LendingTree.com (online financial lender)
• your own personal bank or your local credit union

Most boats are not cheap, and being able to come up with the cash needed to fully pay for one is not always practical. In fact, most boat owners will finance some part of their boat purchase for a certain length of term. And, when interest rates are good, financing can oftentimes make more sense than using extra cash to pay for your purchase. But there are so many financing options available that it can be hard to know which direction to go in. Luckily, I’ve taken the guesswork out of the process for you and have compiled what I believe to be the best boat financing options today.

I am an avid boater, but a big budgeter as well. I love crunching numbers almost as much as I love hitting the water, and knowing where I can find the best deals at the best rates is something I take great pride in, especially when I’m making a purchase as significant as a boat. Let me save you some pain and suffering by sharing where you can get the best deals currently on boat financing and decide for yourself which option is going to meet your needs and fit your financial lifestyle.

‍What Are the Best Boat Financing Loan Options Available?

When deciding how to best go about financing your new boat’s purchase, there are a few things you’ll want to think about before getting into the specifics of what lending organization is going to be best for you.

First, you’ll want to know how much money you are going to need to borrow in order to finance your boat, and how the amount you want to borrow is going to compare to your current income as well as your debt-to-asset ratio.

Most lenders will allow you to borrow up to $4 million dollars for a boat loan…but most of us will never need that much for our water craft! Just know that is the industry standard as a financial cap.

More likely, if you are a typical boat owner, you are going to most likely spend somewhere between $40,000 to $140,000 to purchase your dream boat. Knowing this, most banks or other lending institutions will want to see your financial information and your debt-to-asset ratio before letting you sign on the dotted line for a loan.

Your financial information will be things like current pay stubs, proof of assets that you own outright and other forms of income – such as rental properties, stock dividends or social security – that will serve to prove where you are financially and how much boat you can afford to buy.

Your debt-to-asset ratio is showing that you don’t already have a large number of outstanding loans and that paying your boat loan is not going to be problematic for you, based on your other expenses.

So…it’s important to have your financial house in order before you finance a boat. Make sure you can show what income is coming into your house, and what you have going out before you make that first trip to the lender’s office.

Second, another thing you’ll want to take into consideration is how long you want the life of the loan to be. Boat financiers will offer you a number of different options for loan terms, and knowing what you are interested in beforehand is going to help you make a good decision later on.

Most financial institutions will offer loans to boat purchasers that can last anywhere from five years to twenty years.

The average boat loan falls right in the middle of that, and is usually written to be a 10 to 12 year loan.

That may sound long, but it means that you can benefit from smaller monthly payments, which will free up your money for other things. And, if you lock in a good interest rate, which many boat owners are able to do, you will not not deal with the downside of a longer term loan, since your money won’t all be going to your interest rate.

We are going to take a much closer look at interest rates and which finance options will give you the best ones. Just know before you get to the signing table how long you can expect to be paying on your boat loan. It will help the process go much more smoothly.

Finally, knowing what your credit score is before you go to secure your boat loan is also going to be a great idea. Like I said earlier, there are tons of companies that would be happy to loan you money for a boat loan – but if your credit isn’t as good as it should be, they may end up charging you a significantly higher interest rate just because you are a bigger risk for them.

Consequently, if you have a good to excellent credit score, you’ll find that there are going to be much better opportunities for you to borrow money at a much more competitive interest rate, with better loan terms as well.

You probably can’t change your credit score overnight. But knowing what it is before you walk into the negotiating room with a lender is going to let you know what type of purchasing and negotiating power you have at your disposal.

Once you’ve gotten these things in place, it’s time to start searching for your next boat loan. Let’s look more carefully at what your best options are and find out what lending organization is going to work for you and your next boat purchase.

1. Boatloan.com

One of the top companies for boaters who are looking to secure loans is the well-known and reputable Boatloan.com. Having done business with boaters for decades, this company knows what it’s doing and is a great place to start, especially if you are new to boat financing.

Whether you are looking to finance a new boat, finance an older boat or even work with someone who can help you refinance your existing loan, Boatloan.com is a great company to consider.

Because the company is capable of closing deals in 48 states and works with a multitude of different private lenders, they can really help you narrow down the best deal for your needs.

They have interactive loan calculators on their website that will help you determine how much you can finance, even before your application has been submitted.

This is a great tool for those who don’t want to go through the whole hassle of filling out a loan application, gathering all their documents and jumping through other hoops, just to find out that they won’t be approved for the amount of money they wish to borrow.

Boatloan.com will help pre-approve you, so you’ll have more peace of mind going into the process.

And, once you do figure out what amount is possible for you to finance, based on your income and debt-to-asset ratio, the process for applying for a loan with Boatloan.com is relatively painless.

There is a place where you can apply for your boat loan on their website, as well as a phone number you can call if you wish to speak to an actual human.

Boatloan.com has a variety of loan options available as well. From short-term loans, which tend to be under five years, to larger loans that can sometimes be as much as twenty years, Boatloan.com has a ton of flexibility and a package that’s bound to fit every boat purchaser’s needs and budget.

One can expect to be able to get an interest rate of somewhere between 4.83 and 7.2 percent, depending on where the interest rates currently are.

One downside to Boatloan.com is that you’ll want to strive for a credit score of above 650 before you apply for a loan through their site.

Because their rates are so competitive, and their service is so high, they tend to not have to approve loans for those boat purchasers who don’t have the best credit.

But, if you have a good credit score and all your paperwork in order, give Boatloan.com a try.

2. Essex Credit

Another fantastic option for those who are looking for a competitive boat loan and have done their homework to determine what they can afford, and if they have their documents in order is a company by the name of Essex Credit.

Essex Credit has been around the financing industry for a long time. They pride themselves on down home customer service, flexible financing options and tons of different loan packages for the boating enthusiast who has a good credit score and knows a good deal when they see one.

Essex Credit is also a loan company that deals with RV loans as well as boat loans, so they are well-versed in all large recreational vehicles and know what their customer is looking for.

Depending on the current market, Essex Credit tends to have loan rates between 4.89 and 6.73 percent. They can also offer loan periods from as short as four years to as long as twenty years, all dependent on what you are in need of finding.

Their excellent and knowledgeable customer service staff will connect you with the right loan officer to work with your budget, personal needs and even your personality type.

Another real benefit to working with Essex Credit for your next boat loan is that they are comfortable helping you through the process of financing whether you are buying your craft from a dealer or an independent seller.

Essex Credit knows their product, they know boats, and they’ll work hard to get to know you. Check them out and see if they are the best boat financing company for you.

3. Trident Funding

When you’ve been in the lending business for as long as Trident Funding has been, it’s no wonder you are looked to as one of the leaders in the industry.

Trident Funding has been loaning individuals money for boats, yachts, RVs, camper trailers, and just about any other sort of recreational vehicle you can imagine.

In fact, Trident Funding intentionally set out to be a lender of a specific niche that has proven advantageous for them. For over 30 years they’ve been in the business of helping people finance and purchase new and used boats, as well as help families to refinance as well, when that is a necessary option.

Just like some of the other loan writers on my list, Trident Funding has an easy to navigate website and a great calculator for figuring out your loan amount, what your interest will be, and how much boat you can afford, given your financial situation as well as any debt you currently owe.

One of the things that sets Trident Funding apart from some of the others on my list is that you can have a lower credit score and still qualify for a boat loan.

They are very customer-oriented and have a great track record for digging deeper into your underwriting paperwork when you first apply for a boat loan.

If your credit score is a bit low, or if your debt-to-asset ratio isn’t as strong as it could be, Trident Funding will look more carefully at your file and see if they can identify areas that you are still a strong candidate for the loan, but maybe you just don’t “look as good on paper,” as someone with a higher income, better debt-to-asset ratio or a higher credit score might look.

They are an ethical company that won’t lead you astray. But, they may be willing to make some exceptions another company can’t or won’t.

A trypicle interest rate at Trident Funding right now is between 4.9 and 7.3 percent. This is a company definitely worth a look when you get ready to finance your next boat.

4. LendingTree.com

A name that has been synonymous with financing for all sorts of purchases is Lending Tree.

Many of us think of Lending Tree when we are getting ready to buy a car, refinance our home or apply for an equity line of credit to help pay for a remodel or educational costs.

But Lending Tree is also a big name in the boating industry and has been turned to for years when a boat purchaser wants a solid rate, a high performing team of professionals, and wants to know they are working with a company that knows the business.

Lending Tree is a bit unique in that they have so many resources, you will have more than enough offers to choose from. And, if that sounds a bit overwhelming, this is where Lending Tree’s excellent underwriting team can help you weed through the different loan offers and decide which is going to meet the needs you have.

They also are well-respected in the world of refinances, so once you lock in one rate, there’s no cause for concern if the rates were to go down. Lending Tree will already have your file on hand and be able to help you navigate a new rate.

Same applies if you find yourself wanting to change the terms of your loan. Sometimes life catches up with us and we need to reduce our payments and give ourselves more time to pay back the original loan.

Other times, we find ourselves wanting to pay down the loan quicker, and not be penalized for making early payments or writing larger principal checks.

Again, Lending Tree knows how to deal with and and all of these curve balls and make sure that you're a satisfied customer. After all, much of a company like Lending Tree’s business is based on repeat customers and referrals. It stands to reason they are hoping to keep you for the long haul.

Lending Tree’s rates are comparable with the other companies I’ve listed here – anywhere from 4.3 to 8.0 percent, depending on your credit score, debt-to-asset ratio and current household income. Though Lending Tree prides itself on being a no-frills company, I think there’s plenty of reason to look into this financier when you are getting ready to purchase your boat.

5. Your Personal Bank or Credit Union

Finally, when you are getting ready to finance a large purchase like a boat, it’s always a good idea to look to your local bank or credit union as a possible option as well.

Not all banks or credit unions are in the business of loaning money for boat purchases. Many feel that this is a risk-based purchase and – since a boat is a depreciating asset – they may feel it’s not worth the money invested if there were to be an issue and the boat had to be repossessed.

That said, one of the huge advantages to consulting with your local bank or personal credit union is that they know you. They’ve probably done business with you in the past, either in helping you secure other loans, open and close accounts, set up certificates of deposit or money markets, or maybe even manage your business accounts or loans.

Working with a trusted and local provider means that they will have a vested interest in you and want to keep as much of your business as possible.

There are a few different ways that a local bank or credit union could decide to help you finance your boat purchase.

The first one is through a personal loan. Most personal loans are categorized as either secured or unsecured loans.

What this means is that if a personal loan is secured, you are offering up some sort of collateral to cover, or “secure” it. A secure loan is possible if you have a large sum of money that is in the bank or credit union, or you own a business or have some other tangible asset that the bank or credit union could seize if you stopped making payments on your boat loan.

On the other hand, a non-secured personal loan is one where there is no assets, or collateral to back the loan if you were to default on it. Banks and credit unions will typically issue unsecured loans for people who have either been long-term customers, have a large income stream, or are just starting out in life and haven’t had the chance to build much equity, but have a clean track record in the activities they’ve engaged in so far.

Secured personal loans will carry a lower interest rate, as they are less risky for the bank to loan out.

Another type of loan that is potentially an option for your boat purchase is a home equity loan. Sometimes also referred to as a home equity line of credit, this is a pretty straightforward way of borrowing the money needed for your boat purchase if you currently own a home and if that home loan is held with your bank or credit union.

Many banks will allow you to use a home equity line of credit to purchase a boa, since your home is one of your best options for solid collateral.

And, the less you currently own on your home the better chance you will have of being able to secure a home equity loan with a more reasonable interest rate as well.