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Best boat loans of June 2024

Updated Jun 17, 2024

What to know first: A boat loan is a type of financing — typically a personal loan — used to fund the purchase of a boat or related expenses. Similar to auto loans, they generally come with fixed monthly payments and fixed interest rates. The approval process is mostly dependent on credit, with the lowest rates going to those with the best credit profiles.

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PERSONAL LOANS

LightStream: Best overall boat loan

4.7

Est. APR
8.89- 24.29%
* with AutoPay
Loan term
3-7 yrs*
Loan amount
$5k- $100K
Min credit score
695
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PERSONAL LOANS

Upgrade: Best for buying a sailboat

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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Check rate with Bankrate

PERSONAL LOANS

Prosper: Best for buying a deck boat

4.6

Est. APR
8.99- 35.99%
Loan term
2-5 yrs
Loan amount
$2k- $50K
Min credit score
640

PERSONAL LOANS

SoFi: Best for buying a luxury boat

4.7

Est. APR
8.99- 29.49%
with all discounts
Loan term
2-7 yrs
Loan amount
$5k- $100K
Min credit score
680

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Compare boat loan rates from Bankrate’s top picks

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%-35.99% $1,000-$50,000 2 - 7 years 600
Prosper Buying a deck boat 8.99%-35.99% $2,000-$50,000 2 - 5 years 640
SoFi Buying a luxury boat 8.99%-29.49% $5,000-$100,000 2 - 7 years 680

A closer look at our top boat loan lenders

Taking an even deeper dive into our top boat loan lenders, we focus on how each lender differs from one another and why they stand out. We also include data when available on how Bankrate users use their loans. This can give you an idea as to your possible lending relationship with each lender.  

LightStream: Best overall boat loan

LightStream
Rating: 4.7 stars out of 5
4.7

Overview: Owned by Truist Bank, LightStream has been an online loan marketplace since 2012. It provides loans up to $100,000, which is more than what most of our best personal loan lenders offer.

Est. APR
8.89%–24.29%
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: Over the last five years, Upgrade made over $24 million in credit available to its customers. The online consumer lending platform is headquartered in San Francisco and opened its doors in 2016. Unlike many of our best online lenders it has multiple offices across America.

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

Prosper: Best for buying a deck boat

Prosper
Rating: 4.6 stars out of 5
4.6

Overview: Prosper started in 2005 as an online peer-to-peer lender. It specializes in low-interest loans and is the only peer-to-peer lender in our fleet of best boat loans. In almost 20 years, the company has connected customers with $27 billion in loans. 

Est. APR
8.99%–35.99%
Loan amount
$2k– $50k
Min credit score
640

SoFi: Best for buying a luxury boat

SoFi
Rating: 4.7 stars out of 5
4.7

Overview: SoFi is an online lender offering a suite of member benefits and competitive loan products. It's one of our newer boat loan lenders and was founded in 2011 by Stanford graduates. Since then, it's become one of the most popular companies in the personal loan marketplace with over 7.5 million members. 

Est. APR
8.99%–29.49%
Loan amount
$5k– $100k
Min credit score
680

How to compare boat loan lenders

What makes a lender "best" for one borrower will be different for another. Look at these factors when choosing the best boat loan lender.

  • 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. An excellent credit score paired with a large down payment may give you leverage to negotiate. Prequalify with 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.

What is a boat loan?

Boat loans are a type of personal loan that can be used to finance watercrafts and related expenses. Boat loans work for a range of purposes, from financing an older, used sailboat to a brand-new luxury craft. Some lenders may limit the amount they're willing to fund based on the make and model. 

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

The application process is similar to an auto loan application for secured boat loans, but it can be more extensive depending on the lender and your loan amount. Lenders will ask for basic financial documentation, like proof of income and employment information. Also be prepared to dig deeper into your finances, as many lenders require specific documentation, like your latest tax return or a proof of assets.

Most lenders require a good to excellent credit score and a steady, stable income to qualify for a boat loan. Though some lenders require a down payment for the purchase of a boat, you may be able to finance 100 percent of the cost.

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 average 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 you to over-borrow, which will result in unnecessary interest accrual. If you cannot afford to own and maintain a boat, consider renting a boat instead.
  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 the 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: If the tool is offered, prequalify with your top lenders. Prequalification is a process that allows you to check your predicted interest rates and approval odds 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, although it depends on the institution. You can also expect to get a notice by phone or email from the lender on when — and how — you'll get your funds.
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Where to get a 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 cover additional costs, such as repairs. Keep in mind that not every option will fit your finances so it's best to consider every alternative before making a 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.
  • 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, so it's not recommended as a first-choice option. However, it does differ from home equity loans — instead of the funds being disbursed in a lump sum you can draw from the line of credit as needed over a set time period.

Frequently asked questions about boat loans

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 boat 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: