Several financial institutions, such as online lenders, credit unions and banks, offer boat loans. You can finance a boat with an unsecured loan — a personal loan, for example — or a secured loan from a marine dealership or another type of lender.

Comparing your options across different types of lenders can help you assess which option is the best fit for you.

Best places to get a boat loan

The best place to get a boat depends on several factors, such as the boat loan’s interest rate, terms and fees. Here are some options to consider.

Personal loan

Online lenders, credit unions and banks offer personal loans you can use for many purposes, including purchasing a new or used boat. A personal loan is a lump sum, fixed-rate installment loan that’s generally unsecured, meaning you don’t have to use a boat or other asset as collateral.

If you use an unsecured personal loan to purchase a boat and default on the loan, a lender can’t take your boat without a court’s permission. But defaulting may lead to other negative consequences, such as serious harm to your credit.

Credit union

Because credit unions are member-owned not-for-profit financial institutions, they often have more relaxed eligibility requirements than traditional banks. In addition, since they exist to serve their members, you may find that they offer lower rates. To qualify, you must become a member first.

Traditional bank

Several banks offer boat loans. If you have an account with one, you may qualify for a relationship discount. And if you prefer face-to-face customer service, choosing a bank with a physical location in your area could be ideal.

Marine-specific loans

You can also get a boat loan through a marine financing company. With this option, a dealer may offer promotions, like rebates on certain models. You can also get a boat loan through a marine financing company. Marine dealerships may also offer longer repayment terms than other types of lenders like banks and credit unions. But keep in mind that choosing a longer repayment term means paying more interest over the life of the loan.

How to qualify for a boat loan

Although qualification requirements vary by lender, here are some things most lenders consider when you apply for a boat loan.

  • Steady income. Most lenders require you to prove you have enough income to repay the loan by requiring you to provide financial documents, like W-2s, tax returns and recent bank statements.
  • Debt-to-income (DTI) ratio. Your DTI measures your monthly gross income in relation to your monthly debt. To calculate your DTI, divide your monthly debt by your monthly gross income. While DTI requirements vary, many lenders prefer borrowers to have a DTI below 36%.
  • Credit score. Minimum credit score requirements vary depending on the lender, but the better your credit score, the better your chances of qualifying for the best rates.

How to choose the best lender

While shopping for a boat loan, here are some key factors to consider:

  • Annual percentage rates (APRs). To get the best deal, compare rates and terms from as many lenders as possible. Some lenders will allow you to prequalify online to get an estimate of rates you might receive if approved. But understand that prequalifying doesn’t guarantee approval.
  • Eligibility requirements. Before you apply with a lender, make sure you meet its minimum requirements.
  • Repayment terms. Select a lender that offers repayment terms that fit your budget. A longer repayment means lower monthly payments, but you’ll pay more interest. On the other hand, a shorter repayment term allows you to save interest but comes with higher monthly payments.

Frequently asked questions

  • Boat loan terms vary depending on the type of boat loan you choose. If you use a personal loan, for example, terms typically range from one to seven years or longer. On the other hand, secured boat loans usually come with much longer terms — often up to as long as 20 years.
  • It’s possible to get a used boat loan. But you may find it challenging to find a secured boat loan for a used boat, depending on how old it is. For example, while some lenders charge the same rate for used and new boats, others may charge a higher rate and require a larger down payment for used boats.
  • The minimum credit score needed varies depending on the lender. However, generally speaking, the higher your credit score, the better your chances of securing a lender’s lowest advertised interest rate.