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Best boat loan rates for March 2023

Mar 24, 2023
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Bankrate analyzes the best boat loan lenders and what borrowers should look for before signing a loan agreement.  Boat dealerships, banks, credit unions and online lenders offer boat loans. Before you choose which lender you go with, consider: 
 
  • Annual percentage rate: The interest rate percentage on the loan. Your rate will depend on individual factors like your credit score, income and debt-to-income ratio.
  • Loan term: How long the loan lasts and, as a result, how long a borrower has to pay back a loan.
  • Loan amount: The amount of money the loan is for.

Bankrate has also identified each boat lender highlighted as "best for" particular situations based on our research. Comparing these and other factors will help you find the right lender for you and determine if a boat loan is the right choice for your finances.

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4.6

Bankrate Score
APR from

9.99- 25.99%*

with Autopay
Loan Amount

$5k–$100K*

Term: 2-7 yr*
Min. Credit

Not disclosed

Apply on partner site

4.7

Bankrate Score
APR from

8.49- 35.97%

with AutoPay
Loan Amount

$1k–$50K

Term: 2-7 yr
Min. Credit

560

Check rate with Bankrate

4.7

Bankrate Score
APR from

8.99- 35.99%

Loan Amount

$2k–$50K

Term: 3-5 yr
Min. Credit

600

Check rate with Bankrate

4.6

Bankrate Score
APR from

7.99- 35.99%

Loan Amount

$5k–$50K

Term: 2-5 yr
Min. Credit

620

Check rate with Bankrate

4.6

Bankrate Score
APR from

10.50- 29.99%

Loan Amount

$5k–$40K

Term: 2-5 yr
Min. Credit

640

Check rate with Bankrate

4.5

Bankrate Score
APR from

9.95- 35.95%

Loan Amount

$2k–$35K

Term: 1-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

The Bankrate guide to choosing the best boat loan

Why trust Bankrate?

At Bankrate, our mission is to empower you to make smarter financial decisions. With over 40 years of experience comparing and surveying financial institutions, we are able to identify the most important details for our readers. Our award-winning editorial team follows guidelines to ensure content is not influenced by advertisers or partnerships, and our content is edited and reassessed frequently to ensure accuracy. 

What is a boat loan?

A boat loan is similar to an auto loan. In this case, a boat loan gives you the money to purchase a boat. This can be anywhere from a small boat to a more luxury craft, depending on your financial situation and desires. 

Some lenders offer loans specifically for boats, but most will offer personal loans that  can be used to finance boats and related costs. Looking for an online boat loan from a personal loan lender can give you more options to find the least expensive option for you. 

Most lenders will ask the borrower to fill out a loan application, which can be fairly thorough. Lenders will also likely ask for information like tax returns and proof of assets. It's likely that you'll need to provide a detailed account of your personal finances during the application process. Lenders want to make sure you're in a healthy place financially and can afford to take out a larger loan, so it's best to have the necessary documentation on hand before you start the process.

The application process is typically fast and approval is largely based on your credit score and income.Though banks typically require 10 percent to 20 percent down for the purchase of a boat, you may be able to finance 100 percent of the cost.

Compare boat loan rates in March 2023

Lender Loan Amount APR Funding Time Minimum credit score
LightStream $5,000-$100,000 9.99%-25.99%* (with AutoPay) As soon as the same day Not disclosed
Upgrade $1,000-$50,000 8.49%-35.97% As soon as the same day 560
Best Egg $2,000-$50,000 8.99%-35.99% As soon as the next business day 600
PenFed $600-$50,000 7.74%-17.99% Within 1 to 2 days of approval 700
SoFi $5,000-$100,000 7.99%-23.43% Within a few days of approval 680
Happy Money $5,000-$40,000 10.50%-29.99% Within 3 business days of approval 640
Prosper $2,000-$50,000 6.99%-35.99% As soon as the next business day 600
Avant $2,000-$35,000 9.95%-35.99% As soon as the next business day 580

Best overall boat loan

Min. credit score:
Not disclosed
Fixed APR From:
9.99% –25.99%
Loan amount:
$5,000– $100,000
Term lengths:
2 to 7 years
Min. annual income:
$50,000
Overview: LightStream offers personal loans from $5,000 to $100,000 with APRs starting at 9.99 percent. Borrowers can choose from loan terms of 24 to 84 months.
Why LightStream is the best overall boat loan: LightStream’s personal loans offer a wide range of loan amounts and repayment options, in addition to a low interest rate cap of 25.99% APR. All of these factors make LightStream a great option for a big purchase such as a boat.

Best for buying a sailboat

Min. credit score:
560
Fixed APR From:
8.49% –35.97%
Loan amount:
$1,000– $50,000
Term lengths:
2 to 7 years
Min. annual income:
$30,000
Overview: Upgrade offers personal loans from $1,000 to $50,000 with APRs starting at 8.49 percent. Borrowers can choose from loan terms of 24 to 84 months.
Why Upgrade is best for buying a sailboat: The average price of a mid-range pre-owned sailboat starts around $8,000. Upgrade’s loan range of $1,000 to $50,000 is wide enough to ensure that borrowers will qualify for at least the average starting cost of a sailboat.

Best for financial resources

Best Egg

Best Egg

See offers Arrow Right

Check rate with Bankrate

Min. credit score:
600
Fixed APR From:
8.99% –35.99%
Loan amount:
$2,000– $50,000
Term lengths:
3 to 5 years
Min. annual income:
Not disclosed
Overview: Best Egg offers personal loans from $2,000 to $50,000 with APRs starting at 8.99 percent. Borrowers can choose from loan terms of 36 to 48 months.
Why Best Egg is best for financial resources: Best Egg offers a fairly wide range of loans and does not charge a prepayment penalty for early payments, but its high maximum APR of 35.99 percent and origination fee up to 5.99 percent can eat into the overall value of the loan.

Best for buying a used boat

Min. credit score:
700
Fixed APR From:
7.74% –17.99%
Loan amount:
$500– $50,000
Term lengths:
1 to 5 years
Min. annual income:
Not disclosed
Overview: PenFed offers personal loans from $600 to $50,000 with APRs starting at 7.74 percent. Borrowers can choose from loan terms of up to 60 months.
Why PenFed is best for buying a used boat: PenFed’s wide range of loan amounts and low starting amount of $600 makes this lender a good choice for borrowers looking to buy a used boat. The price point for a used boat varies depending on the type of boat and a variety of other factors, so its wide loan amount range is well-suited for a borrower in this market. 

Best for buying a luxury boat

Min. credit score:
Not disclosed
Fixed APR From:
7.99% –23.43%
Loan amount:
$5,000– $100,000
Term lengths:
2 to 7 years
Min. annual income:
Not disclosed
Overview: SoFi offers personal loans from $5,000 to $100,000 with APRs starting at 7.99 percent. Borrowers can choose from loan terms of 24 to 84 months. 
Why SoFi is best for buying a luxury boat: SoFi’s wide range of loan amounts and high maximum loan amount of $100,000 makes this lender well-suited for borrowers looking to finance a luxury boat.

Best for borrowers with limited credit history

Happy Money

Happy Money

See offers Arrow Right

Check rate with Bankrate

Min. credit score:
640
Fixed APR From:
10.50% –29.99%
Loan amount:
$5,000– $40,000
Term lengths:
2 to 5 years
Min. annual income:
$30,000
Overview: Happy Money offers personal loans for credit card debt consolidation from $5,000 to $40,000 with APRs starting at 10.50 percent. Borrowers can choose from loan terms from 24 to 60 months.
Why Happy Money is best for borrowers with limited credit history: With a low minimum credit score of 640, borrowers who haven't had time to build up a solid credit score have increased approval odds, making it ideal for those looking to pay off previous boating-related credit card debt.

Best for buying a deck boat

Min. credit score:
600
Fixed APR From:
6.99% –35.99%
Loan amount:
$2,000– $50,000
Term lengths:
2 to 5 years
Min. annual income:
Not disclosed
Overview: Prosper is a peer-to-peer lending network offering personal loans from $2,000 to $50,000 with APRs starting at 6.99 percent. Borrowers can choose from loan terms from 36 to 60 months.
Why Prosper is best for buying a deck boat: Deck boats can cost anywhere from $20,000 to $50,000, making Prosper’s loan range of $2,000 to $50,000 ideal to help pay for this expense.

Best for fair credit borrowers

Min. credit score:
Not disclosed
Fixed APR From:
9.95% –35.95%
Loan amount:
$2,000– $35,000
Term lengths:
1 to 5 years
Min. annual income:
$14,400
Overview: Avant offers personal loans from $2,000 to $35,000 with ARPs starting at 9.95 percent. Borrowers can choose from loan terms from 12 to 60 months.
Why Avant is best for fair credit borrowers: Avant is best for borrowers looking for a smaller loan. If you’re in the market for a jon boat or any other moderately priced boat, Avant could be a good place to start.

How boat loans work

Banks and other lenders have tailored their products to fit nearly every budget and lifestyle. However, there are two main categories that boat loans usually fall into: secured and unsecured.

Both of these options have pros and cons, but the loans and rates available to you will depend on the lending institution and your financial history. It’s important to understand the difference between the two types of loans before signing up for any financing.

Secured boat loans

A secured loan is geared toward lower-credit borrowers and is backed by collateral (property, a vehicle or a value item that's used to recoup the loan value if the loan payments aren't made). In the case of a secured boat loan, the boat itself could serve as collateral. 

Due to the collateral provided by the borrower, secured loans usually feature lower interest rates than unsecured loans and are accessible to borrowers with a low score or thin credit history. Secured loans are also accessible to borrowers who may not have the best credit history, as lenders aren't as stringent with secured loan requirements. 

Unsecured boat loans

An unsecured loan doesn’t require collateral, and generally comes with higher interest rates and more restrictions than secured loans. 

Unsecured personal loans are a common boat financing option, as they generally come with better rates and have benefits, like repayment flexibility.

Financing your boat with a personal loan

Personal loans typically have competitive interest rates and flexible repayment terms and if you have a good credit score and sufficient income, a personal loan may be a great fit for you. Plus, depending on the lender, you may be able to make extra payments that go 100 percent toward the principal, which can help you pay down the balance faster. 

A personal loan is unsecured, meaning your boat or another asset won’t be used as collateral. An unsecured loan is entirely based on your creditworthiness and verifiable income, so borrowers with better-than-average credit have the best unsecured approval odds.

 Once your loan request is approved and funded, you receive the entire amount in your bank account, minus fees such as origination fees.

How to compare boat loan lenders

Comparing lenders is the most important step in the process of finding the best loan for your credit situation. Here are three steps to take before applying to ensure you're not putting your finances at risk in the long-term: 

  1. Prequalify for as many lenders as possible to see your predicted eligibility odds and potential rates without impacting your credit. 

  2. Compare the predicted offers to find the lender that offers the most competitive rates and terms. 

  3. Research the discounts and member benefits of the remaining lenders to find the one that best meets all of your financial needs.

Different boat loan uses

While eligibility may differ from lender to lender, boat loans are often restricted to boats themselves or boat-related purchases. Boat loans can generally be used to finance any new or pre-owned models, from smaller jon boats to full-sized yachts depending on what you qualify for.  

Depending on the criteria, some lenders may allow you to use the funds for any related purchases, like maintenance, repairs, storage and insurance. Before signing on the dotted line, check with the lender's requirements to make sure you don't end up in more high interest debt down the road.

What to consider before getting a boat loan

Although there are a few choices for budget boats, most of them cost well into the thousands. Anyone in the market for a luxury boat can expect the price tag to be far higher than what most families have on hand for recreational expenses.
 
Once you have your sights set on the boat of your dreams and are ready to look at financing the purchase, consider all factors that could affect your final decision.
 
The price tag is just one of the expenses attached to owning a boat. Maintenance and insurance can quickly turn into big-ticket items. If you plan on keeping the boat at a marina, expect to pay monthly rent for a storage area and administrative fees.
 
Anyone preparing to take out a loan should also take an honest look at their personal finances and future earnings. Once the contract is signed, the money must be paid back. Look closely at the fine print and ensure your finances can handle the payments, both now and in the long-term.

Pros and cons of getting a boat loan

Pros

  • Checkmark

    Lower down payments: Depending on the institution, the down payment you're required to make could be less than what you'd have to pay with other financing methods. Some lenders don't even require a down payment, which could end up costing you more in interest down the road, but could increase your approval odds.

  • Checkmark

    Long repayment terms: Since the loans are larger, the average repayment term for a boat loan falls between 15 and 20 years.

Cons

  • Potentially high fees: Origination and administrative fees have the potential to cut into a large portion of your loan amount, so make sure you're aware of any and all fees before signing on the dotted line.

  • Debt-to-income impact: Boats are a large investment, no matter the cost. Taking out a larger loan could boost your debt-to-income ratio significantly, which makes it harder to get approved for other forms of lending, like a mortgage or a car loan.

Where to get a boat loan

Boat loans are available for both new and used boats; generally the biggest difference between the two is in how much you'll need to borrow and where you get the loan from. If you buy a new boat, you may be able to get financing from the dealer or through a marine specialist. Used boats, such as those you buy from an individual, may not have dealer financing as an option, which would cost you more up front but less in the long-term. 

Like most vehicles, the newest, biggest or most high-tech models end up costing the most. As a rule of thumb, assess the likelihood of a future upgrade to determine whether a loan for a new boat is worth it. If you have your eye on an upcoming model or an upgraded version of your current boat, consider looking at pre-owned boats so as not to put yourself in large amounts of debt unnecessarily.

New vs. used boat loans

Aside from the make and model, the biggest difference between new and used boats how much you will need to borrow. Generally, new boats are going to cost more, so you will need to borrow more money or put down a larger amount up-front. The exception to that is if you are deliberately choosing a used boat that costs more than the price of a new boat because of the size or features.

The other difference may be in where you can get a loan. If you buy a new boat, you may be able to get financing from the dealer. Used boats, such as those you buy from an individual, may not have dealer financing as an option. However, online lenders will still be available to help fill in any funding gaps.

Alternatives to boat loans 

If a boat loan isn't in the picture, there are other ways to finance such a purchase. Just keep in mind that while all of these options are technically available, it doesn't mean that they're the best fit for everyone. Before choosing an option, assess your finances to make sure it doesn't break the budget. 

Unsecured personal loans, while potentially more expensive and harder to get approved for, can be good financing tools when looking to buy a boat. These loans are found through banks, credit unions and online lenders and since they don't require collateral, there's less risk involved. However, some lenders may limit what you can use the funds for, so read through the fine print before making a final decision. 

Home equity loans can also be used to finance a boating-related purchase, although it's not recommended. A home equity loan allows you to tap into the equity you've built up in your home to finance a purchase, with your home acting as collateral. If you miss the monthly payments, you run the risk of losing your home to the lender to settle your debt. 

Plus, the interest on a home equity loan is tax deductible only when using the funds to make improvements toward your home, so the interest you pay is on the hook for taxation if used to purchase a boat.

How to calculate how much boat you can afford

To decide how much you can afford a boat, consider factors like the following:

  • The APR: Look through the lender's credit requirements, APR ranges or prequalify to see your approval odds and what your monthly payments potential interest rate could cost you.

  • Your monthly income and expenses: Calculate your debt-to-income ratio to see how much more debt you can reasonably take on while maintaining your budget.

  • Other current debts: If you have other high-interest debts, like private student loans or credit cards that have been weighing down your wallet, consider paying those down before taking on another loan. 

  • Repairs and maintenance: Before applying, calculate the maintenance, insurance and storage costs to determine whether a boat will fit comfortably in your budget. Also factor in the potential for emergency repairs and how much it could cost with your desired make and model.

FAQs about boat loans

The bottom line

If getting out on the open water has been a lifelong goal,many boat loan financing options are available. Depending on your credit and income, you can find secured or unsecured boat loans that fit your needs and budget.
 
Before jumping in, consider that most financial experts don’t recommend personal loans for discretionary purposes, especially if you already carry credit card or other debt. If you take a personal loan or a boat loan, have a plan to pay it off. Use our boat loan calculator to see how much your monthly payment might be.

Methodology

To select the top boat lenders, Bankrate considers several factors that indicate loan cost, lender trustworthiness and eligibility. Factors include details such as credit requirements, APR ranges, fees, loan amounts and flexibility to account for a wide range of credit profiles and budgets. Bankrate also considers boat-specific offerings and emphasizes factors such as loan amounts that make a difference when purchasing a boat.

Each lender has a Bankrate rating, which consists of three categories. These categories include:

  • Affordability: The interest rates, penalties and fees are measured in this section of the score. Lower rates and fees and fewer potential penalties result in a higher score.
  • Availability: What the minimum loan amounts are, eligibility requirements and loan turnaround are considered in this category.
  • Customer experience: This category covers customer service hours, if online applications are available, online account access and mobile apps.