How Long Can You Finance a Boat?

How long can you finance a boat? You can finance a boat for 20 years. With a ten-year term, your monthly payments will be much lower than with a twenty-year term; you may calculate your boat loan to see how the monthly payments will change between the two terms.

How long can you finance a boat

Boat Loan Terms

Another important factor to consider when financing a boat is how long you want to keep it. Lenders may charge a little higher interest rate or need a greater down payment if you request an extension of the loan term. In addition to these, a lender may consider the following when deciding the duration of your loan:

Boat Loan Size

Similarly to when you buy a home or a vehicle, the loan amount has a significant impact on the length of the loan. The longer a debt may be financed, the more expensive it is. You should bear in mind that many lenders will set a minimum loan amount for various loan terms.

With a longer loan period, you’ll end up paying more for your boat than if you’d purchased it with a shorter term. However, for other individuals, a lower monthly payment is more important than short-term financial gains. It all comes down to how you see and approach the transaction.

Types of Boating Equipment

It’s important to remember that most contemporary powerboats may be lumped together under the umbrella term “powerboat,” but lenders may see certain models as distinct from the others.

  • Wooden-hulled boats are what they sound like.

  • Boats that can go fast.

  • Boats of many kinds, both sail and motorized.

  • Pontoons and boats with several hulls.

The Boating Age

Loan terms might vary greatly depending on the age of a boat. For the most part, the newer the boat is, the longer the term of a boat loan you may expect to get. Many lenders limit the age of a boat to a certain number of years, while others only lend to new boats.

When purchasing a pre-owned boat, you may also have to be prepared for changes in other loan terms. Some lenders may charge higher minimum loan amounts or different interest rates for boats constructed before a specified model year. This is just one example.

When it comes to financing older boats, maritime finance businesses follow a set of rules. The majority of the lenders will support the acquisition of a high-quality older boat, but not a lower-quality older boat.

Several factors determine whether or not you may borrow money for a certain kind of boat, such as the age of the boat, its condition, and the type and model of the boat. In the minds of lenders, the more expensive boat is of greater quality and will last longer.

If you have a strong credit rating and a large down payment, your loan rate will be lower. As a buyer of an older yacht, you may be required to provide tax documents or income statements.

An additional premium is sometimes applied to the cost of borrowing for boats older than 20 years, making loans for 21 to 30-year-old vessels more costly.

Life on a Boat

When individuals wish to live aboard their yacht, another huge dilemma arises. The alternative lifestyle of living aboard a boat full-time requires a lot of planning and organization.

Lenders may refuse to issue loans for liveaboards because of the many restrictions that govern the ownership of homes, homeownership, and homeownership escrow accounts. In these circumstances, obtaining boat finance might be difficult.

Making a budget and adhering to it is the greatest approach to keep track of your spending. Boat insurance may be as costly as home insurance, depending on the size and value of your vessel. Take out a $300,000 per person and $300,000 per accident insurance policy on a rental to learn more about boat insurance.

Because you’ll be living in a smaller space, your property taxes and utility bills are likely to be lower. You’ll likely save money on trash disposal, gas, and water as a result of using this strategy. General maintenance is when you may notice a significant increase in expenditures.

There is a significant difference in cost between marine components and labor compared to those found in ordinary homes. You may save money by doing some of the work yourself. In the end, remember that every hour spent working on your yacht is a time that you are not earning money.

Finally, don’t forget that you don’t have to leave your boat at a marina if you already have one in a spot.

An application for permanent residency is required by most marinas. Liveaboards aren’t allowed in certain regions, or there are considerable waits for the privilege. Your insurance premiums may rise if you make your boat your main dwelling and pay higher liveaboard slip fees.

Checklists of essentials must be drawn up before embarking on an international trip. Make sure your boat is ready for life on the water before you set sail.


Keep in mind that your possibilities for financing the purchase of a yacht might change depending on your financial situation. If you have a solid credit score and a substantial amount of discretionary cash, you’ll obtain better terms on a boat loan than someone with poor credit and a smaller budget. Underwriting rules for financing an expensive luxury item like a yacht may be more stringent than for a vehicle or a house.

How to Apply for a Boat Loan?

Similar to applying for a personal or vehicle loan, applying for a boat loan is a rather straightforward process. Just follow the below points:

  • The first step is finding a lender. You may be able to apply online in certain instances. To apply in person, you may need a bank or credit union.

  • Once you’ve filled out the loan application, you’ll normally need to supply information about the amount of the loan, the sort of boat you’re purchasing, and the age of the boat.

  • This might lead to a harsh credit investigation, much as with personal loans and vehicle loans (note that this may lower your credit scores by a few points).

  • It might take as little as a day or as long as a few days, depending on the lender you’re dealing with to have your loan approved.

  • It’s a good idea to adopt the same attitude to a boat loan that experienced boaters do when it comes to being prepared on the water. Here are a few ideas to help you get the money you need.

  • The best way to obtain the best deal for your financial situation is to shop around.

  • Apply for a boat loan now.

  • Before agreeing to anything, read the fine print. Prepare to take to the waters if everything goes well.

Get a few quotes and compare your possibilities for a boat loan. If you can’t locate one, try building your credit, paying down your debt, and saving for a down payment. Remember to include the expense of owning a boat in your total budget to avoid turbulent financial seas shortly.

How Long Will It Take to Pay Off a Boat?

You’ve done all the research, selected the model you want, planned your negotiation technique, and prepared for the excursions you can take. Now it’s time to buy a boat. Isn’t the following step in the buying process the actual purchase? In actuality, it’s still a ways off.

Understanding your financing choices is an important part of getting ready to purchase a boat. Even if you’ve saved for a long time, you’re unlikely to be able to pay for a new boat in full unless you have a large amount of discretionary income or have been saving for a long time.

You may be apprehensive about the financing procedure if you’ve never done it before. Fortunately, obtaining a boat loan is quite similar to obtaining a loan to purchase a vehicle or a house. Is there anything else you need to know to receive the best price on your boat?

Types of Boat Loans

Secured and unsecured loans are available for both new and old boat purchases. There are advantages and disadvantages to each sort of loan.

Secured Loan Unsecured Loan
A collateralized personal loan. You might lose your collateral if you don’t pay your loan. Unsecured personal loans don’t need collateral like a boat or other assets.
You might lose your automobile if you don’t pay your car loan in numerous states. Because unsecured loans are not backed by an asset, lenders perceive them as riskier and demand higher interest rates.
Similarly, a secured boat loan uses the boat as collateral, and the lender may repossess it if you fail. An unsecured boat loan may provide greater flexibility than a secured boat loan.

Loan Alternatives

There are a variety of alternatives open to you when it comes to financing your dream boat. Depending on the lender, the price of your boat, and the amount of money you have to put down, you may be able to get a loan with any of the following terms:

Amount Percentage

The most popular boat loan option is a fixed-rate loan, and for good reason. A “fixed” interest rate indicates that the monthly payment will remain the same for as long as you have the loan, so you’ll be able to plan your finances accordingly.

The Rate of Change

After a period of low introductory interest, this sort of financing implies that your interest rate will alter based on the market. You may get better offers, but your monthly payments may alter over time.

Many purchasers choose a loan with a fixed interest rate because they don’t want any unpleasant surprises when it comes time to pay it back.

Due to credit issues, some purchasers may not be able to receive a fair rate from these loan kinds. There are other methods to finance your boat if that’s a problem for you or if you just want to know what they are.

If you have bad credit, subprime loans may be a possibility, while home equity loans may provide fixed rates at competitive prices while utilizing your house as collateral. For those who choose not to put their boat up as collateral, a personal loan is another alternative. However, this kind of loan has the potential to harm your credit rating.

Overall, the better your credit and finances are, the more likely you are to acquire more flexible loan terms that will make it simpler for you to keep up with your monthly expenses until you’ve paid off the whole amount.

Lengths of Loan Terms

Even when you have the money for a down payment and have been approved for a loan, remember that you are still the one who is responsible for making the payments.

For these and other reasons, such as insurance, maintenance fees, and the cost of renting a storage place for a boat, you must plan and make sure that your boat payments fit within your budget. In other words, how long can you afford to keep a yacht on the market?

Lenders often provide payback periods of fifteen to twenty years. Your ability to repay the loan will be determined by a variety of factors, including your credit history and current income. You may still get by with a more costly boat by taking out longer-term loans, but you need to watch the interest rate to make sure you can pay it back.

Financing durations for all of the atypical loan choices we’ve mentioned are going to be rather short. Personal loans, on the other hand, might have durations as short as five or seven years.

If you’re financing a less costly boat, a longer loan term may be beneficial. However, depending on your overall loan amount, it may result in higher monthly payments.


Even though boat financing isn’t that different from financing a vehicle or a house, many people worry precisely about how long they can keep their boat on a loan. In addition to the length of the term, there are several factors (such as the amount of your down payment and the interest rate) that might impact your monthly payment. So, when you sit down with a pen and paper to figure out how long you should acquire the loan, you also need to consider these other considerations.

Frequently Asked Questions

Here are some FAQs related to financing a boat:

1. How to acquire a boat loan?

To begin, fill out the Online Loan Application. The loan partner will conduct an initial credit check and may ask for further financial information such as tax returns or bank statements. Once authorized, the lender will outline any closing-day requirements. To complete the loan closing documentation, the financing partner will contact the seller. The loan partner will then provide closing paperwork to the buyer and seller. Finally, the lending partner would pay the loan funds to the seller as instructed.

2. What is a boat loan?

Boat loans are comparable to car and house mortgage loans. You must submit a loan application to the lending partner. Like a house mortgage, the bank may want your federal tax records, evidence of assets, and other financial information.

Loan to value guidelines is based on used boat book value and new boat contract price. To be approved, all underwriting requirements must be satisfied, which is more stringent than automobile finance. When everything is gathered, the lender will create the closing documents.

3. Can I obtain a boat mortgage?

The lenders often need a yacht to be registered with the USCG if it satisfies the net tonnage threshold. If the boat you want to buy is qualified for documentation, our finance department or lender will draft a First Preferred Ship Mortgage and submit it with the Coast Guard as the bank’s lien on the vessel. As long as the boat is small enough to be registered with the Coast Guard, the lender will record its lien against a state title or comparable document. In any case, the lien is discharged upon loan repayment.

4. How good is my credit to receive a boat loan?

No serious credit concerns such as bankruptcy, foreclosure, settlement, or charge-offs during the last 3–5 years.

5. Can I obtain a poor credit boat loan?

Generally, marine finance has stricter credit and underwriting requirements than auto or even residential mortgages. The lenders prefer candidates with good credit, although some may take applicants with bad credit.

6. How long is a boat loan?

The length of the loan depends on the boat you choose. It deals with lenders that may give periods up to 20 years, depending on the age and kind of boat, as well as the loan amount.

7. A 15-year boat loan: is it a good idea?

A well-maintained boat is worth more than a bank or credit union, thus the terms of a boat loan are likely to be longer than those given by your local bank or credit union. Lenders are more likely to provide marine loans with 15- to 20-year durations because we have a good track record, says Smith.

8. For how long do boat loans last?

Typical boat loan periods include 15 to 20 years of repayment. When taking out a loan for a new boat, down payments might vary from 10% to 30%, depending on the amount of money you’re borrowing.

9. Is it a smart idea to get a boat loan?

With a good credit score and a steady income, a personal loan may be the best option for purchasing a boat. All you’d need is approval for a loan large enough to pay the boat’s purchase price. Lenders may only use certain years, makes, and models of boats as collateral for a secured loan.

10. Does a 700 credit score qualify me for a boat loan?

A credit score of at least 700 is required by the vast majority of lenders. You may acquire a boat loan even if you have a poor credit score, but expect to pay a higher interest rate or a bigger down payment.


What’s the result? With a good credit score and an acceptable debt-to-income ratio, you shouldn’t have any trouble getting a loan for up to 20 years to buy a new boat, which it recommends over purchasing a used one since new boat owners are often happier with their purchases. If you follow the above article, you’ll have years of pleasure on the water to look forward to after purchasing this sort.

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