4 Ways to Get a Boat Loan

Jason SteeleUpdated March 1, 2023

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

If you’ve ever wanted to own a boat but don’t have the cash, you’ll be happy to know that there are loans available to help you finance this major purchase. You’ll get the money to buy the boat, and in return you’ll make monthly payments until the loan is paid off. The terms of the loan and the interest you’ll pay depend on factors like your credit score, your income, and the collateral you are willing to put up. Here’s what you need to know about how to get a boat loan — and what type of loan might be right for you.

Types of Loans for Boats

The cost of a boat can be substantial, so you’ll want to choose the type of loan that makes the most sense for your needs. There are four main loan options to consider:

1. Personal Loans

A personal loan is an unsecured loan (meaning that it doesn’t require collateral) that you can use to purchase a boat, or anything else you’d like; personal loan usage is completely up to the borrower. Personal loans for boats might be an option that makes sense for you.Typical personal loan requirements include your credit score, which will be an important factor in determining the interest rate and terms that you receive, as will your debt-to-income ratio. It’s a good idea to ensure there are no inaccuracies in your credit report and pay off any debt if you can before applying for a personal loan.You’ll also want to check into the maximum personal loan amount you can get to make sure it’s enough to purchase the boat.

2. Unsecured Loans

An unsecured loan requires no collateral, which means you don’t need to have a lien on your boat’s title. Because there is no collateral to guarantee the loan, however, an unsecured loan typically has a higher interest rate than a secured loan. If you have excellent credit — which is generally considered to be a FICO® credit score above 740 — it can be easier to qualify for a personal loan. Those with bad credit may have trouble qualifying.

3. Secured Loans

Secured loans require collateral, such as the boat itself. If you default on your loan, the lender can take possession of the boat. However, secured loans generally have lower interest rates than unsecured loans, and they can be easier for borrowers to qualify for. Secured loans can be a good way for a borrower to build credit as long as they make their payments regularly and on time. Recommended: Guide to Kayak Financing

4. Home Equity Loans

A home equity loan is secured by the equity you have in your home. Your equity is the difference between the current market value of your home and the amount you owe on it. Home equity loans can have longer repayment terms and lower interest rates than other types of loans. To receive this kind of loan, you must, of course, own a home and have sufficient equity in it.

Who Offers Boat Loans

When it comes to the best place to get a boat loan, there are several kinds of institutions that offer them.

1. Private Lenders

There are private lenders online that offer boat-specific loans. Other online lenders offer loans for recreational vehicles or personal loans that can also be used to purchase a boat.

2. Credit Unions

Credit unions are nonprofit financial institutions that can offer boat loans. Credit unions provide financial services to people who have something in common such as military service or a professional connection. To receive a boat loan from a credit union, you must first join it. Depending on the credit union, the membership requirements may be fairly lax, such as residing in a certain area, or strict, such as being a current or former employee of a particular company.

3. Banks

There’s no membership requirement to get a loan from a bank, but not every bank offers boat loans. To look for one that does, start with the banks that you already have a relationship with and then look at smaller, local institutions. You’ll also typically have more luck finding a boat loan at a bank in a place where boating is popular, such as in Minnesota or Florida, than you might in a landlocked state.

4. Dealer Financing

If you are purchasing a boat from a dealer, they may offer financing through a financial partner. This can simplify the process because you can do the buying and financing at the same time. However, the interest rates may be higher with dealer financing, so be sure to check into that first.

Steps to Getting a Boat Loan

Once you’ve decided to apply for a boat loan, there are several steps you’ll need to take.

1. Determining Your Credit Score

Before you apply for any loan, you should take the time to check your credit score. This will give you a good sense of what type of loan you qualify for. Many credit card issuers now provide free credit scores. You can also get a free credit report from Annual Credit Report.com

2. Shopping Around

Next, you can begin shopping around for the best loan for your needs. Look at the interest rates offered, as well as other fees. You should also check the lender’s application requirements and the boat loan term.

3. Determining the Desired Lender Boat Loan Requirements

In the process of selecting a lender, find out what the lender’s loan requirements are. For example, what credit score is required and will you need to secure the loan with collateral? How big of a loan can you get? How much down payment will be required? What information is needed in the application process? Will you need an inspection, called a marine survey?

4. Working Toward Meeting the Boat Loan Requirements

Once you know what’s required, work to compile all the information before you begin applying for the loan. That way, you’ll have everything in hand, which will make the process smoother.

5. Applying for a Boat Loan

To apply for a boat loan, you’ll have to fill out an application listing your personal and employment information, and give the lender permission to check your credit. Depending on the lender, you may also need to list your assets and liabilities.Recommended: Are New Employees Able to Get a Personal Loan?

Compare Personal Loan Rates Today

If you’ve found the boat of your dreams and you’re ready to shop for a personal loan to purchase it, Lantern can help. In our marketplace, you can easily and conveniently compare rates for different personal loans to find the one that best matches your boating needs. Learn more about personal loan options today with Lantern.

Frequently Asked Questions

What credit score is needed to get a boat loan?

How long does it take to get a boat loan?

What is the maximum amount that you can get for a boat loan?

Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Photo credit: iStock/Ashley-Belle Burns

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About the Author

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.

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