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Best boat loans of March 2024

Mar 09, 2024

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Personal loans

LightStream: BEST OVERALL BOAT LOAN

LightStream
Rating: 4.7 stars out of 5
4.7
Est. APR
7.99%–25.49%
* with AutoPay
Loan term
2-7 yrs
Loan amount
$5k– $100k
Min credit score
695
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Personal loans

Upgrade: BEST FOR BUYING A SAILBOAT

Upgrade
Rating: 4.7 stars out of 5
4.7
Est. APR
8.49%–35.99%
with AutoPay
Loan term
2-7 yrs
Loan amount
$1k– $50k
Min credit score
600
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Personal loans

Prosper: BEST FOR BUYING A DECK BOAT

Prosper
Rating: 4.7 stars out of 5
4.7
Est. APR
8.99%–35.99%
Loan term
2-5 yrs
Loan amount
$2k– $50k
Min credit score
560
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Personal loans

SoFi: BEST FOR BUYING A LUXURY BOAT

SoFi
Rating: 4.8 stars out of 5
4.8
Est. APR
8.99%–29.99%
with all discounts
Loan term
2-7 yrs
Loan amount
$5k– $100k
Min credit score
680

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How to compare boat loan lenders

What makes a lender 'best' for one borrower will be different for another. However, there are a few factors that stand out as the most important when it comes to boat loans — regardless of the type you choose.

  • Usage requirements: Some lenders restrict what you can use the loan on. Read the terms and conditions thoroughly to make sure the lender allows you to use the loan for your intended boat-related expenses. 
  • Used boat restrictions: An older pre-owned boat may be viewed as a risk by a lender. If you're financing an older boat, don't be surprised if your lender requires a full inspection of the vessel to ensure it's in good condition before approving the loan. The loan-to-value (LTV) ratio will determine how much a lender is willing to finance.
  • Member benefits: Banks, lenders and credit unions may offer benefits to existing members that marine-specific lenders lack. Some potential perks include interest rate discounts, extended grace periods or payment relief options. Plus, the application process will likely be streamlined with a financial institution that already has your information.  
  • Rates and terms: Your credit profile largely determines the annual percentage rate (APR) you'll be offered, and an excellent credit score paired with a large down payment may give you leverage to negotiate. Prequalify for at least three lenders to get an idea of what a competitive interest rate could look like for you. Also consider the repayment terms from each lender against your budget.
  • Fees: Carefully read the terms and conditions to see what fees each lender you're considering charges. Some waive every fee while others charge administration, prepayment and origination fees, to name a few. These can add up quickly, so make sure to search every fee charged and consider how it could impact your balance.

Bankrate's top picks for boat loan lenders

LENDER BEST FOR EST. APR LOAN AMOUNT LOAN TERM MIN CREDIT SCORE
LightStream Overall 7.49%-25.49% with Autopay $5,000-$100,000 2 - 7 years 695
Upgrade Buying a sailboat 8.49%-35.97% $1,000-$50,000 2 - 7 years 600
Prosper Buying a deck boat 8.99%-35.99% $2,000-$50,000 2 - 5 years 560
SoFi Buying a luxury boat 8.99%-29.99% $5,000-$100,000 2 - 7 years 680

A closer look at our top boat loan lenders

Here's a deep-dive into each lender, why it is the best in each category and specifically who would benefit most from borrowing from the lender.

LightStream: Best overall boat loan

LightStream
Rating: 4.7 stars out of 5
4.7

Overview: LightStream is one of the most competitive online lenders in the personal loan space, offering a quick application process, fast funding and low APRs. LightStream is owned by Truist Bank.

Est. APR
7.99%–25.49%
Loan amount
$5k– $100k
Min credit score
695

Upgrade: Best for buying a sailboat

Upgrade
Rating: 4.7 stars out of 5
4.7

Overview: Personal loans from Upgrade come with the benefit of competitive, fixed rates, a simple application, quick funding process and flexible borrowing amounts. These loans can be used to refinance credit cards, consolidate debt, take on home improvement projects or finance major purchases.

Est. APR
8.49%–35.99%
Loan amount
$1k– $50k
Min credit score
600

Prosper: Best for buying a deck boat

Prosper
Rating: 4.7 stars out of 5
4.7

Overview: Prosper is a personal loan pioneer — the company became the first firm to enter the peer-to-peer lending arena when it launched in 2005. Prosper offers unsecured personal loans through WebBank to customers with a variety of credit profiles. It also offers home equity lines of credit (HELOCs).

Est. APR
8.99%–35.99%
Loan amount
$2k– $50k
Min credit score
560

SoFi: Best for buying a luxury boat

SoFi
Rating: 4.8 stars out of 5
4.8

Overview: A SoFi personal loan is a good choice for borrowers who have a stable income and good-to-excellent credit. Along with a fully digital experience, SoFi has large loans and accepts joint applications. 

Est. APR
8.99%–29.99%
Loan amount
$5k– $100k
Min credit score
680

How we made our picks for best boat loans

Bankrate's trusted personal loans industry expertise

57

years in business

30

lenders reviewed

20

loan features weighed

665

data points collected

To select the best personal loans, Bankrate’s team of experts evaluated over 30 lenders. Each lender was ranked using a meticulous 20-point system, focusing on four main categories:

What is a boat loan?

Boat loans can be used to finance watercrafts that range from an old used sailboat to a luxury craft, although some lenders may limit fund usage based on the make and model. 

Before you apply, look into whether the lender will approve your marinecraft and intended usage. Consider all of the costs that come along with financing a boat, like maintenance, repairs and marina fees and make sure these are approved expenses as well.

Most lenders will ask the borrower to fill out a loan application, which can be fairly extensive. Lenders will also ask for documentation, such as tax returns and proof of assets, to verify you are capable of making payments. It's likely you'll need to provide a detailed account of your personal finances when you apply.

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

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How boat loans work

Find out how boat loans work and what you need to qualify for one.

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Types of boat loans

A secured loan is backed by collateral — property, a vehicle or a valuable 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, secured loans usually feature lower interest rates than unsecured loans, and may be accessible to borrowers with a low credit score or thin credit history.

Pros and cons of getting a boat loan

Green circle with a checkmark inside

Pros

  • Depending on the financial institution and your credit score, you may be able to purchase a boat without making a down payment.
  • Terms of up to 20 years may be available if you go through a marine finance company.
  • Opting for an unsecured loan will allow you to have the boat title in hand as soon as you purchase it.
Red circle with an X inside

Cons

  • Origination and administrative fees have the potential to cut into a large portion of your loan amount.
  • Taking out a larger loan could boost your debt-to-income ratio significantly, which makes it harder to get approved for other forms of financing, such as a home mortgage.
  • Most lenders require that applicants are in good financial health and have a good-to-excellent credit score to get approved for a boat loan.

Is a boat loan a good idea?


Nationally recognized student financial aid expert

If a boat is a luxury, as opposed to a necessity, buying a boat with a boat loan may not be a good idea. You may have trouble making the loan payments. The value of the boat will depreciate over time. There will also be ongoing costs involved in keeping the boat even if you don’t use it, such as insurance, maintenance and storage. You may be better off renting a boat if you don’t use the boat very frequently.

Senior Loans Writer

Committing to a boat loan makes sense if you’re more than just a once or twice-a-year weekend water warrior, and don’t have the cash to buy one outright. Like any recreational purchase, make sure you budget for the initial and ongoing costs. You’ll need some way to get the boat to the water, a place to store it and will spend money to maintain it before, during and after your local boating season. Pick the shortest term you can afford so you can enjoy payment-free boat ownership sooner rather than later. If you have a tough time finding a secured loan for an older used boat, an unsecured personal loan may be a good alternative.

How to get a boat loan

Getting a boat loan can be a quick and relatively painless process if you know what to expect. Before starting your search, have a clear idea of exactly how much you need to borrow, what you need from the loan and the rate you can afford

  1. Create a budget: Calculate how much boat you can afford before you start the process. Going into the application without a solid figure in mind can cause financial difficulties down the line.
  2. Check your credit score and credit history: Most credit cards offer free credit monitoring as an added benefit. You can also check your report for a more detailed breakdown of your credit history on AnnualCreditReport.com. If you find an error, you can request it be removed — though the creditor may take up to 30 days to respond.
  3. Shop around: Look at multiple lenders before engaging in the preapproval process. Comb through multiple lender's minimum eligibility requirements and look at the fee and rate structures. From there, create a list of the top three to four lenders. 
  4. Prequalify: Prequalify with your top lenders if it's offered. Prequalification is a process that allows you to check your predicted interest rates before applying. Unlike the formal application, prequalifying doesn't impact your credit. 
  5. Compare offers and apply: Follow the application instructions on the lender's website. Most institutions host the application completely online, while others require that you be present for certain portions of the process. After applying, you should find out if you're approved within 48 hours depending on the institution and will receive notice from the lender on when — and how — you'll get your funds.
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Where to get a boat loan

Find out where to get the best boat loan.

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Alternatives to boat loans 

If a boat loan isn't in the picture, there are other ways to finance your purchase and potentially cover additional costs, such as repairs. Keep in mind that not every option will fit your finances. Before choosing an option, make sure it doesn't add too much pressure to your monthly budget. 

  • 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.
  • Home equity lines of credit (HELOCs) are also a potential solution, especially if you have an ongoing project related to your watercraft. This type of financing also taps into your home equity, but instead of being disbursed in a lump sum you can draw from it over a period as needed.

Frequently asked questions about boat loans