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The best boat loan depends on your budget, the type of boat you buy and the age of the boat. From financing for small ski boats to large yachts, there is a loan for most things that float. But they are not all the same.
Once you have established the type of boat you want to buy and the model year you are looking for, you can start shopping for a boat loan. Many lenders will only finance certain types of boats or require a boat to be newer than a certain model year. To make sure you get the most out of your shopping, know this.
There aren’t as many lenders offering boat loans as there are auto loans. But there are still a few to choose from.
Here are Insider’s top picks for boat loans in 2021.
LightStream boat loans are an attractive option for most borrowers looking for a cheap boat and quick financing.
LightStream is an online lender backed by Truist. With a fully online experience, same day financing, and many loan types available, LightStream is one of our picks for the best RV loans and personal loans.
LightStream offers boat loans at relatively low interest rates and at no cost. Loan amounts vary from $ 5,000 to $ 100,000, which offers a wide range that will suit most budgets. Combined with the lowest starting interest rates of the competition, LightStream loans are an attractive option.
LightStream does not list any specific type of boats that it will or will not fund on its website. With LightStream boat loans, the boat itself is not used as collateral to support the loan; the loan is treated as an unsecured personal loan. This opens up more possibilities for a variety of types of older models and boats that other lenders do not finance.
Types of boats financed: LightStream does not list any specific requirements
APR range: 4.29% to 11.89% APR, with automatic payment
Loan amounts available: $ 5,000 to $ 100,000
Be careful with: High credit score requirements. LightStream only works with borrowers with good or better credit, so anyone with a low credit score may not qualify.
Boat loans through Bank of the West and its credit division, Essex Credit, are a good option for people who are considering obtaining a boat loan of $ 50,000 or more.
At the time of this writing, a $ 10,000 boat loan with Bank of the West would have a starting interest rate of 8.89%, a $ 15,000 boat loan would start at 8.39% and a loan of $ 50,000 would start at 4.29%. While their rates for loan amounts over $ 50,000 are competitive, anyone looking for a smaller loan can find a better rate with LightStream.
It should be noted that this lender has loan processing fees which could increase your total cost of borrowing. A 10% down payment is also required for loans between $ 10,000 and $ 200,000, and the percentages increase for larger loan amounts.
In addition, Bank of the West adds 0.5% to all interest rates for barges and high performance boats, and adds 0.25% to interest rates for boats between model years 2001 and 2010. .
Types of boats financed: Boats must be model year 2001 or newer to be eligible. Bank of the West specifically says it funds standard or custom motor or sail boats, multihull boats, pontoon boats and electric boats. The lender also offers loans for high performance boats, barges and wooden hull boats. However, it does not fund boats that can exceed 99 miles per hour.
APR range: 4.29% to 9.99% for new and used purchases, and 3.59% to 3.94% for boats on board
Loan amounts available: $ 10,000 and more for new and used boats, $ 25,000 and more for boats on board. Loans of over $ 2 million are available.
Be careful with: Credit score requirements. Bank of the West states on its site that it only lends to people with a credit score of 700 or higher. An additional charge for boats built between 2001 and 2010 could make LightStream a better option for those looking for an older boat.
SunTrust offers no charge loans which are the best for financing the purchase of a large boat. SunTrust picks up where LightStream left off – anyone looking for a smaller loan should consider a loan from LightStream.
SunTrust’s minimum loan amount is $ 100,000 and only finances boats over 25 feet. It should be noted that the bank requires down payments, starting at 15% for standard boats up to $ 500,000.
For people looking for houseboat loans, SunTrust might have an advantage. While Bank of the West is adding extra fees to boat loans for barges, SunTrust is not, which could make this lender less expensive.
Types of boats financed: This lender only funds boats 30 feet or longer – SunTrust does not finance high performance boats, houseboats, or commercial boats. Boats must be 15 years of age or older.
APR range: 4.74% to 5.74% APR for new and used purchases
Loan amounts available: $ 100,000 to $ 4 million
American Bank Boat Loans
The interest rates on loans from this lender were not the most competitive, starting at 5.24% for a new boat. The bank says rates may be higher for purchases of private boats, loans under $ 25,000 and used boats. Ultimately, lower rates may be available elsewhere.
National Boat Owners Association boat loans
Technically, this is a first choice – the NBOA offers loans through Essex Credit, the lending branch of Bank of the West.
USAA boat loans
USAA is only available to people affiliated with the military, which limits the number of people who can access these loans. However, even those who qualify might get a better rate from one of our top picks – interest rates start at 5.25% with USAA, more than a percentage point higher than a LightStream loan.
Navy Federal Credit Union Boat Loans
Like USAA, membership in this credit union is only available to certain people. However, a starting interest rate of 5.95% for new boats and 7.45% for used boat loans means there are better deals to be found elsewhere.
Boat loan in the United States
This online boat loan market has not beaten the interest rates offered by other lenders. A high minimum loan amount of $ 25,000 may also be more than what many borrowers need.
How did we choose the best boat loans?
The goal of Personal Finance Insider is to help smart people make the best decisions with their money. We’ve combed through the fine print of many boat loans and lenders so you don’t have to. We have considered the most important factors for boaters, including:
- The type of boats financed: We have researched lenders offering loans for most shapes and sizes of boats, from barges to sport boats.
- Interest rate: We have compared the starting points of the interest rates of many banks and compared the ranges, where applicable.
- Little or no cost: We looked for lenders who offered boat loans with the lowest fees on each loan.
- Loan amounts: We’ve chosen lenders with the widest variety of loan amounts available to help everyone find a loan for their boat budget.
- General availability: The lenders we looked at have loans available in almost all of the 50 states, if not all.
How do boat loans work?
Boat loans work the same way as car loans or mortgages that you may have already obtained. Here’s how the process works:
- Find the boat before you start looking for financing. Many lenders ask for boat information in the finance application, so you will need to know exactly what you want to buy.
You will need good credit. Most of the lenders we looked at for this roundup required a credit score of 700 or higher.
- You may be asked for a marine investigation. You may be asked to have a marine survey done to make sure the boat is in good working order during your purchase process. According to National Association of Manufacturers of Marine Products, the typical marine survey will cost between $ 20 and $ 25 per foot. This is most often required for people who buy a used boat.
Expect to make a down payment. As with a home or car loan, you will probably have to make a down payment for your boat loan. The percentage required varies depending on the lender and the amount you are financing, but it is usually between 10% and 20%.
Where is the best place to get a boat loan?
You have two options for finding a boat loan: in person at a boat dealership or online.
If you are looking to purchase a loan from another person – also known as a private party purchase – looking for a boat loan online is probably your best bet. Online lenders often allow borrowers to purchase boats from an individual or a dealer. This is a more flexible option that can open up the possibility of including more affordable used boats.
Can you get a loan on a used boat?
Yes. All of our premier lenders offer loans for new and used boats.
How long do boat loans last?
The length of a typical boat loan depends on the amount financed and your lender. While a smaller loan can have terms of between 24 and 72 months, boat loans of a larger amount can last up to 240 months, or almost 12 years.