Setting sail on your very own boat is a priceless experience. But unless you’ve saved a boatload of cash, you’ll need a boat loan to make your dreams a reality.
You can get a boat loan from banks, credit unions, or online lenders. The application process is typically fast, and approval is largely based on your credit score and ability to repay. While some lenders require the loan to be secured by the boat, they don’t require a down payment.
Before you jump in, consider that most financial experts don’t recommend personal loans for discretionary purposes, especially if you already carry a credit card or other debt. If you take a personal loan, have a plan to pay it off.
Here’s how to finance a boat with a personal loan, where to find boat loans, how to determine the costs, and factors to consider before applying. In the end, if you decide a boat loan isn’t for you, consider alternatives that get you on the water debt-free.
How boat loans work
A Quick Boat Loans company is an installment loan company with fixed monthly payments typically over two to 15 years. Interest rates and loan terms vary based on the lender, the size of the loan, your credit score and income, and whether the loan is secured by the boat or unsecured.
Secured loans
Secured boat loans use the purchased boat as collateral. They may have higher loan limits, longer repayment terms, and lower rates than unsecured loans. The risk is that you can lose your boat if you default.
Secured loans work best for borrowers who don’t qualify for an unsecured loan, want a higher loan amount, and are comfortable with the risk associated with secured loans.
Unsecured loans
An unsecured boat loan doesn’t use the boat or anything else as collateral. Without that backing, rates on unsecured loans may be higher and terms shorter.
You may not lose your boat if you default on an unsecured loan, but you’ll still face consequences, including a damaged credit score and wage garnishment if the lender takes you to court.
Where to get a boat loan
When considering boat loans from different lenders, use the loan’s annual percentage rate, which includes the interest rate plus fees, to compare costs and payments that fit your budget.
